Mental Health Awareness Month: Tips for Financial Wellness

May is Mental Health Awareness Month. Financial wellness, or the lack of it, can contribute to your level of financial stress.

Financial wellness has a number of definitions. Financial wellness is about managing your economic life and your economic well-being. This includes concepts such as:

  • Spending within your means, having control over your day-to-day and monthly finances.
  • Having the financial freedom to make choices about how you live your life.
  • Having the capacity to absorb an unexpected financial hit.
  • Getting on track to meet your long-term financial goals.

Financial health and mental health

There is a definite connection between your financial health and the state of your mental health. Research has shown that those experiencing financial difficulties often experience signs of depression and anxiety.

On the flip side, those suffering from depression and anxiety may find it difficult to focus and succeed financially.

How to improve your financial wellness

Everyone’s situation is a little different, but in general here are some ways to help improve your overall financial wellness.

  • Get a handle on your monthly spending, consider creating a budget to track your monthly spending and income.
  • Create an emergency fund to save for unexpected expenses. Many experts suggest having six months’ worth of your regular and ongoing expenses in an account that is liquid and can be tapped easily if needed.
  • Be sure that you have a list of when all monthly bills are due, things like your mortgage payment, credit card bills and any loan payments. That will help prevent late payments which can impact your credit.
  • Make a plan to pay down debts. This might include credit card bills, student loans and other debt that might be keeping you from building wealth for your future.
  • Get in the habit of planning for your financial future. This can include goals such as buying a home, saving for college expenses and retirement.

Working with a financial advisor can help

The issue of financial wellness spans the spectrum of age and wealth levels. A financial advisor can help with your financial wellness at all stages of your life and your career. Those who are starting out can benefit from a financial check-up with an advisor. Those who are further along in life and who have accumulated assets can benefit from the in-depth guidance that an advisor can provide.

Meaghan McKenzie, Managing Director, Investments with Wedbush Securities in Seattle says, “Financial well-being starts where you are right now. You can’t tell where your financial well-being is until you meet with your financial advisor for a check-up. Just like going to your doctor or dentist. You don’t know if there is an imbalance. Be proactive, keep your financial advisor up-to-date with any changes that may affect your life. Plan to meet with your financial advisor every six months to a year.”

Some specific areas where a financial advisor can help with financial wellness include:

  • Providing an independent third-party view of your financial situation.
  • Helping you articulate your financial goals.
  • Reviewing your current situation relative to these financial goals and working with you to devise a plan to achieve them over time.
  • Tax planning to help ensure that your investing and saving efforts are as tax-efficient as possible.
  • Developing an investing strategy tied to your financial goals that takes your risk tolerance into account.
  • Working with you to develop an estate plan to help ensure that your loved ones are taken care of in the event of your death. This can include ensuring a will is in place, that all beneficiary designations are current and that you have proper life insurance coverage.
  • Developing a withdrawal plan once you reach retirement. The prospect of outliving your money in retirement can be a source of financial stress for many.

These are just a few ways that a financial advisor can help you improve your financial wellness and reduce financial stress. Even those who have achieved a level of financial success can experience stress over their financial situation.

Contact your Wedbush advisor to discuss your situation and your financial planning needs, especially if you haven’t met for a while. As Meghan McKenzie suggests, set up a regular schedule to meet with your advisor to discuss your situation and make sure that you are on track financially. You will likely find this helps reduce your overall financial stress level.

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These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. The information in these materials may change at any time and without notice.