Understanding Financial Wellness

One of the primary goals of financial service providers is to help improve financial wellness and financial education for consumers. By helping consumers better understand their relationship with their money, they are more empowered to effectively improve their financial wellness

What Is Financial Wellness?

Financial wellness can best be defined as a consumer’s financial wellbeing. That includes a consumer’s basic financial literacy into their own money and available savings, investment or budgeting opportunities, their financial security and how prepared they are for emergencies, and their financial freedom to spend or save discretionary income for retirement. 

Generally, financial wellness can be achieved by focusing on a consumer’s relationship with their money in these key areas: 

  • Spending within your means and avoiding debt
  • Being prepared financially for emergencies
  • Having access to information and tools that allow you to make good financial decisions
  • Having a plan for the future 

Why Is Financial Wellness Important?

High levels of financial stress can actually result in physical symptoms like difficulty sleeping, anxiety, compromised immune systems, or high blood pressure. The connection to physical health that financial wellness has makes it just as an important aspect in one’s overall health, like physical and mental wellbeing. 

Having a comprehensive understanding of your income and expenses, as well as a complete picture of your net worth, can help alleviate stress stemming from finances, and instead empower you to make more sound financial decisions. 

How Can Financial Wellness Be Improved?

Improved financial wellness can be accomplished by expanding your knowledge of financial literacy, and setting financial goals for the short and long term to hold yourself accountable for your financial decisions. It takes discipline and planning, but some of the objects of your financial situation should fall under the four following categories. 


To help manage day to day spending so consumers can spend within their means, financial service providers are increasingly offering budget planning tools. Designed to be easy to use and present spending habits in visual models, budget planning tools are powerful options for consumers who need to closely monitor their expenses. 

Budget planning tools often go one step further and offer consumers their own budgeting plans based on their previous transaction history, income, goals, and other factors so consumers can confidently rely on the tools available to them to be accurate, and give them options that work for them.  

Eliminating Debt

Eliminating debt should be the goal of any financially healthy individual. Working to pay off student loans, home loans, and credit card debt are long term commitments that are easy to lose track of if not properly managed. By using financial forecasting tools, consumers can better plan their debt payments and follow a long-term budgeting strategy so they can set personal goals to follow, and one day pay off their outstanding debts. 

Emergency Funds

There’s no way around it - emergencies happen and it’s always best to be prepared for them financially as much as possible. To better understand where your money goes every paycheck, tools like Envestnet | Yodlee’s cash flow analysis makes it simple to see and adjust where you move your money. 

By getting such a holistic view of all incoming and outgoing funds, you can set up an emergency fund more easily. 

Retirement Planning

Planning for retirement is a key aspect of financial wellness, yet many employees have no retirement savings or are unsure how much they should be setting aside to retire. Using an automated savings tool can let consumers set specific amounts of money they’d like to save or invest across their accounts, including contributions to retirement savings programs. 

What Is a Financial Wellness Program?

A financial wellness program is a program designed to help people manage their finances better and reduce their financial worries. It's common for companies to have employee financial wellness programs aimed at educating employees and improving their financial security. Such programs usually come in addition to typical employee benefits programs, and provide more information beyond retirement planning and investing

Common types of financial wellness programs include workshops that walk employees through how to use financial wellness tools available to them, or a partnership with a financial planning company to give employees personal advice for their unique financial situations. 

Benefits of a Financial Wellness Program

Financial wellness programs have the power to help more than just individuals improve their financial well being. Employee financial wellness programs help both individual employees, and organisations as a whole. 

To get started, companies must assess their employee benefits programs and employee behaviour to find where they can best improve their financial wellness offerings. 

By better equipping employees with the financial wellness tools and education they need to improve their financial picture, the higher the chance financial stress can be reduced to increase employee job satisfaction and productivity. 

Increased employee satisfaction ultimately leads to an improved bottom line for companies, higher quality talent, and reduces turnover.