Know Your Numbers to Improve Your Wellness

My tip today centers around a wellness treatment that is not largely discussed but can have a profound impact on your overall well-being.  This treatment has been proven to help people sleep better at night, reduce stress in their bodies, reduce conflict in their relationships and overall improve a sense of well-being.  This treatment is not a one time treatment but an on-going service that centers around what matters the most to you and how you will accomplish those things.  Any guesses?

I am talking about financial life planning.  Planning that you do to make sure your finances are in alignment with your life and what you want to do with your life. Probably not what you expected-but I am here to tell you that improving your financial life can have lasting benefits to our wellness.  It’s not a hard concept to buy into. Just stop and think about what causes stress in your life.  I feel pretty confident that money is going to be in everyone’s top 5 and this includes those that have a lot of money.  Why is this thing “money” causing us so much stress? I have lots of ideas and theories that I plan to share with you on this but for today, let’s just focus on taking your money “temperature.” 

Seeing that we are in a pandemic, we are all familiar with taking our body temperature.  It’s an indicator for how our body is performing. If it is too low or too high, then we have reason to believe something is wrong in the body.  Your financial body works in a similar way.  You need to be able to take the temperature of your finances and see how things are performing.  So today, I have two ways you can take your financial temperature. 

One, look at how you are spending money.  If you are spending less than you make, great! Your temperature is good.  If you are spending more than you make, then you need to stop and pay attention to your finances.  Adjustments need to be made either to your income or your expenses, but you should not sustain a financial life where you overspend your income.  This leads to many financial diseases that can be hard to correct.  If you are on the other end and way underspending, meaning you have lots of excess cash, that isn’t necessarily good either.  This means you are maybe lacking a sense of direction for where your money should be put to work.  Every dollar that comes into your financial life should have a job.  Bonus points if those “jobs” are well-aligned with what you value most. 

The second way you can take your temperature is to look at your net worth – fancy word like body mass index.  English please!  Your net worth is what you own (bank accounts, investments, property, cars) versus what you owe (mortgage, car loan, student loans, credit cards).  You want this number to be positive – meaning you have more than you owe.  Ideally, you have a lot more than you owe but each person’s net worth will be unique to them.  I like knowing your net worth because you have a lot of control here.  You can decide how much cash you keep versus invest or buy something.  You can control how much debt you decide to take on.  Tracking your net worth year to year will give you a good indication of how your financial life is improving.  You create your own baseline and then you monitor and track it. 

Much like our wellness and how we need to know our numbers and how we are tracking, the same is true for your finances.  Knowing your numbers will set you up to be able to make smart financial decisions and choices in your financial life. 

Tip shared by Jessi Chadd, a certified financial planner (CFP®) and a certified financial transitions specialist (CeFT®). Jessi lives at the intersection of wellness and wealth and enjoys helping people be well in all areas of their life including their finances. For more information on how you can improve your financial wellness, please reach Jessi at Jessi is a co-organizer for Priority Fit Camp. Each week, we publish a health and wellness tip that is shared at the Priority Fit Camp community workout. The free group class happens every Saturday at 7:50 a.m.  

Click for more info on the free Saturday group workout.

“Money” by 401(K) 2013 is licensed under CC BY-SA 2.0