Financial wellness and financial wellness programs continue to gain steam. This trend was most recently surfaced by Aon in a recent study of 250 large United States employers. The study found that 93% of those employers planned on focusing on financial wellness in 2015. In a recent post, Lacey discusses why financial wellness is becoming a priority for 2015, so I won’t go into those details here.
But what is financial wellness, what are the components, and how do they fit together? In a past post of mine I defined financial wellness and discussed the 5 key elements of wellness. For quick review those elements are:
- Spending: An individual must spend less then they earn so they are able to set aside money to reach their financial goals.
- Emergencies: To Be financially stable individuals must have emergency savings to ensure that a life event doesn’t upend their finances.
- Guidance: We all need an independent and trustworthy source of information to guide individuals toward the right decisions especially with the massive market of financial services and products designed to separate people from their earnings.
- Benefits: To be financially well individuals must understand their benefits and be able to maximize the benefit they receive from the packages they are offered.
- Investments: In order to build wealth individuals must find long-term investments and diversify their portfolios.
These 5 elements make up an individuals financial life. At HelloWallet we view these as a ladder that each of our members is climbing. For many, one or more of the rungs of the ladder may be broken, making it very difficult for those people to reach financial wellness. The financial wellness ladder is detailed in the video below: