Taking care of our health means taking care of our mental and physical wellbeing, but also our financial wellness. Research shows good money management can make us feel better about our life overall and lead us to make better decision that further support a healthy lifestyle. The Financial Consumer Agency of Canada (FCAC) emphasizes the importance of financial wellness, defining it as the ability to comfortably meet current needs and commitments while having the resilience to do so in the future, ultimately leading to financial freedom and peace of mind. 

Financial wellness is more than just income. It’s being able to live comfortably today, manage and absorb financial setbacks and stay on track to meet your money goals. It's about remaining financially resilient and having the flexibility to make decisions that are right for you and your family.

But how do we achieve financial wellness? Here are some ways you can start on your financial wellness journey right now.

Understand your current financial situation

Start by calculating the cost of your monthly bills, including variable spending like groceries and transportation. Next, calculate how much debt you have and your income after taxes. Write down all your debt and payment obligations. This will give you a clear picture of what your life costs.

It’s important to include all your sources of income. If your income fluctuates or you have several streams of income from different jobs, you can look back at your income over the last six months to calculate what you bring in on average.

This exercise will make it clear if you’re spending more than you make.

Create an emergency fund

Once you know how much your current lifestyle costs, you can start looking ahead to your future needs. Consider creating an emergency fund to help protect yourself from any unexpected expenses. Think of it like a financial safety net. The amount depends on your personal situation, but an emergency fund that covers at least three months of your living costs is a common goal.

Saving money in an emergency fund can be overwhelming. It’s not something that is going to happen quickly, but even small amounts saved regularly will add up and give you extra financial security. Make smaller attainable goals to get your emergency fund money together. Let me share my savings hack. I like to call it: Get to one thousand.

Everyone’s situation is different, but here’s how it works. If your monthly expenses are $4,000, aim for several months of expenses. Start by saving $1,000, then work on the next $1,000. Smaller goals build momentum and reduce frustration.

Have a multi-year plan

Benjamin Franklin famously said, “If you don't plan to succeed, you plan to fail.” This is especially true when it comes to your money.

It is beneficial to have short, medium and long-term goals for your money. This can be referred to as the 5-10-15 year plans. These plans may change over time, but having clear objectives for each interval helps maintain financial stability and enhance your financial wellness.

For example, if you plan to buy a new car in five years, start saving now. If your 10-year plan is to pay off your mortgage, understand your options to increase your payments. If you have access to a workplace pension plan like HOOPP, understand what it offers and any steps you can take to help build your retirement income.

These goals are adaptable. You might wait six years to purchase a car or receive a raise that allows you to pay your mortgage sooner. But, having these plans in place makes it easier to adjust when your circumstances change. Without a plan, it becomes more challenging to adapt and take advantage of changes.

Practice good financial hygiene

Being organized helps improves your financial wellness. Like other aspects of well-being, having a routine, such as eating properly or exercising regularly, will make you feel better. The same is true for money matters.

Here are a few habits you can add to your routine to enhance your financial hygiene:

• Pay bills on time to avoid interest, where possible. Set up automatic payments if you’re worried about missing a bill’s due date.
• Pay yourself first. This is one of the most common lessons in personal finance. It can be money that is automatically taken from your bank account and invested. Or a commitment you make to save a certain amount every month before you spend on other things. If you have a workplace pension like HOOPP, the automatic contributions you make each pay period are an easy way to “pay yourself first.”
• File taxes on time. It’s the law to file your taxes every year and there are expensive penalties for those who file late - especially if you owe money. Even if you have a refund coming, filing late can delay government benefits and your refund.
• Give when you can. Financial wellness includes feeling good about your money. A 2023 Harvard Business Review paper revealed that giving to others makes us feel better than spending on ourselves, choosing who to give to enhances our satisfaction and seeing the impact of our giving boosts our happiness. While it’s not always feasible, donating to causes you care about can benefit others and increase your overall well-being.

Financial wellness is not about accumulating wealth. It’s about creating peace of mind and being able to sleep better at night . It’s about knowing you’re protected if an unexpected problem arises and having the power to make choices that will help secure your financial future.