Despite the fact that money is a central part of all of our lives, financial literacy often isn’t taught explicitly. Many of us learned about money indirectly—by observing how our family and friends handled (or mishandled) their finances. These lessons were sometimes incomplete or flawed, leaving us with misconceptions and emotional baggage about money that persisted into adulthood. It’s no surprise that many people have complicated, and often fraught, relationships with their finances.
While informed financial planning is vitally important to overall financial health, even the best plan can fail to deliver satisfying results when created in a vacuum. As a financial planner, I take a holistic approach to financial planning by zooming out and focusing on the larger picture of financial wellness. That means I start by understanding a clients’ goals and motivations before creating practical steps to help them achieve those goals.
This ‘financial wellness’ approach can be beneficial to anyone, at any stage of life or career or income level—and you don’t have to be a financial advisor to apply it! In this article, let's outline the difference between financial wellness and financial planning and the role each can play in helping you find financial peace of mind and confidence in your decision-making.
Financial wellness is the sense of having financial security and the freedom to make choices, both now and in the future. It’s not solely about how much money you earn, save, or your overall income level—it’s about how you feel about your financial life, whether your finances allow you to meet your goals, and whether you can handle financial stress in a healthy, balanced way.
Although the process requires a level of self-reflection and discipline that may seem daunting, focusing on financial wellness—rather than just ticking off items on a financial planning checklist—helps alleviate the fear and anxiety that lead to procrastination and dread.
By prioritizing financial wellness, you’ll ultimately gain more freedom and peace of mind in your planning and decision-making. A worthwhile trade-off!
To make the process more approachable, we’ve broken the concept of financial wellness into three pillars. To build a solid foundation tailored to your needs and goals, focus on these three areas:
Financial wellness varies greatly from person to person. The goal is to determine what it looks like for you to feel financially well.
Take a moment to reflect: What do I want to get right when it comes to my finances?
Instead of focusing on what you don’t want to go wrong, shift your mindset to what matters most. Financial wellness isn’t about meeting arbitrary benchmarks or earning a certain amount—it’s about creating a sense of security and satisfaction in how you manage your money. It’s about making confident decisions that leave you feeling secure and empowered, no matter your circumstances.
While financial wellness is about understanding your motivations, behaviors, and goals, financial planning is more tactical. It’s a common misconception that financial planning is the same as investment management. In reality, financial planning is an ongoing process that analyzes your entire financial picture—from cash flow needs to retirement plans to debt management—and creates practical steps to achieve your goals. Think of financial planning as a roadmap: it helps you identify where you are, where you want to go, and the best way to get there.
After you’ve spent some time clarifying your goals and priorities, it’s time to get moving. Below are outlined a few core financial strategies you should explore and implement as you plan for your financial future.
Cash flow is your financial lifeblood. To create a successful (and realistic) financial plan, start by evaluating your cash flow and spending habits:
Saving isn’t just about hoarding money—it’s about intentional planning. Break your savings into buckets and prioritize them:
Pro Tip: Automate your savings to ensure consistency!
Managing debt is critical to maintaining financial stability. Additionally, proper debt management can help protect your credit score. While this can feel like a barrier to financial success, it’s manageable with the right approach:
Different accounts, such as savings, investment, and retirement accounts, offer unique benefits like interest growth, tax advantages, and liquidity, helping you maximize your financial potential:
A net worth statement gives a snapshot of your financial health by comparing what you own (assets) to what you owe (liabilities). To create one:
Pro Tip: Schedule a quarterly “money date” to update your net worth and assess your goals.
Financial wellness is a journey, not a destination. No matter where you are in life or your career, managing your money can feel like an uphill battle—but it doesn’t have to be. When you start by building a solid foundation on the three pillars of financial wellness, you’re able to create a tailored plan that works for your unique needs.
Michelle Stevens believes that good financial planning is an essential part of life, but that it should be easy to understand. As a member of the financial planning team at Truepoint Wealth Counsel, she guides clients through the planning process and helps integrate ideas for success. She applies a holistic approach, incorporating the many facets of financial planning that include retirement planning, education analysis, insurance reviews, and stock option monitoring. Disclaimer: Truepoint Wealth Counsel is a fee-only Registered Investment Adviser (RIA). Registration as an adviser does not connote a specific level of skill or training nor an endorsement by the SEC. More detail, including forms ADV Part 2A & Form CRS filed with the SEC, can be found at TruepointWealth.com. Neither the information, nor any opinion expressed, is to be construed as personalized investment, tax or legal advice. The accuracy and completeness of information presented from third-party sources cannot be guaranteed.