What is Financial Wellness?
Money affords us the products, experiences, and lifestyles that we want and need. It gives us a sense of security, freedom, and opportunity. It can also cause stress, instability, and uncertainty. Therefore, it’s no surprise that financial wellness directly affects our overall wellbeing. But what does financial wellness mean? At Perpay, we define financial wellness as understanding and managing your finances proactively for the short and long term and believe that it can be broken down into 4 real-world components:
1. Spending - Keeping spending within one’s means.
- How much of my income should go toward flexible spending? What is flexible spending?
- How should I properly budget for back to school spending?
2. Emergencies- Being financially prepared for emergencies and unexpected situations.
- How much money should I have in savings in case of an emergency?
- What types of emergencies should I plan and prepare for?
3. Guidance - Having access to the information and tools necessary to make good financial decisions.
- Am I asking the right benefits questions to my HR department?
- Should I be working with a financial advisor and personal accountant?
4. Planning - Having a plan for the future that eliminates stress and prepares for a steady retirement.
- How much should I be allocating to my 401K or IRA?
- At what age should I start to contribute?
If any of the questions listed above have ever crossed your mind, you’re not alone. According to a recent Time Article, nearly two-thirds of our population are financially illiterate and feel unsure of how to make effective decisions about the use and management of their money. At Perpay, we're committed to improving your financial wellness, not only by allowing you to pay for purchases from your paycheck over time, but by providing you with knowledge and resources to live a financially healthy life. Our goal throughout the course of this blog is to provide our readers with answers to the aforementioned questions along with stories, tips, and tools for creating a healthier financial future.