What is Financial Wellness?

Financial wellness is a personal assessment of your finances and what you can and cannot afford based on one of the following:

· How much you have saved;

· How much disposable income you have on a monthly basis;

· How much credit card and other debt you are carrying;

· How you would respond to a financial emergency; or

· Whether you are able to save for a large purchase or take an annual holiday.

What is Financial Stress?

Financial stress, on the other hand, has to do with the negative feelings about things like:

· Meeting the financial demands of life;

· Affording even the basic necessities;

· Having sufficient funds to make ends meet; or

· Experiencing general worry, fear, or anxiety when it comes to finances.

Financial stress can have a serious impact on both mental and physical wellness, so it is important to understand how the components of wellness intertwine.

The Five Components of Financial Wellness

There are five main components to overall financial wellness:

1. Spending – understanding how you spend, knowing what your monthly expenses are, and ensuring that you are not spending more than you are earning.

2. Emergencies – creating a separate emergency fund with a recommended 3-6 months of basic expenses set aside.

3. Guidance – seeking out the resources to obtain trustworthy information regarding your finances, and developing the knowledge and accessing the tools required to reduce your financial stress.

4. Benefits – understanding your full compensation package and maximizing the resources available to you.

5. Investments – planning for the future and setting money aside for retirement and other financial goals.

We are living in stressful financial times. Interest rates are rising and inflation is soaring. Many households are living paycheque to paycheque. More and more people are relying on credit to fill the gaps. If you are struggling with your financial wellness, money management, and debt repayment, there are options available. A Licensed Insolvency Trustee can help.

If you are having trouble making ends meet each month, finding the right debt solution can help. Visit the BDO Debt Solutions website for more information about bankruptcy, or call 1 855 BDO DEBT to book a free, no obligation consultation.

Jasmin Brown is a Senior Vice President overseeing the insolvency practice in Saskatchewan. She is committed to providing creative and practical debt solutions with empathy, understanding and professionalism to help people overcome their financial difficulties.

by Jasmin Brown

What is Financial Wellness?

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