Let's Talk About: Financial Wellness
Updated: May 21
FINANCIAL WELLNESS IS A MINDSET, A BEHAVIOR, AND ONE’S RELATIONSHIP WITH THEIR MONEY.
It is one that has a happy, healthy, and relatively stress-free relationship with one's finances.
Typically, people who have financial wellness have the following four elements in place:
Their income covers their expenses and allows them to stay on top of their debt repayments.
They have savings for emergencies or financial upsets such as unplanned critical home repairs, unexpected medical bills, or job loss.
They are saving and working towards long-term financial goals.
They have the freedom to make choices that allow them to enjoy their lives.
Some organizations indicate that Financial wellness is defined as “effectively managing your economic situation” *1, while other organizations distinguish “Well-being as having financial security and financial freedom of choice in the future” *2.
DEBT CAUSES STRESS AND THREATENS FINANCIAL WELLNESS.
As of today, we have 1.7 trillion in Student Loan debt, of which $911 Billion is in Credit Card Debt. Credit Card Debt was higher a year ago, but people are refinancing mortgages for a lower interest rate and taking that money to pay off high interest rates, which now falls under secured loans.
One out of every 3 Americans have $26,121 in unsecured debt. This number has fallen off due to the paying off credit card debt with refinance secured mortgages. This unsecured debt not only includes credit card debt but also medical debt, private loans, car loans and the like.
Of the American that owe taxes, the average amount is $16,849 which is not reflected in the numbers above.
*2Consumer Financial Protection Bureau March 2020
WE HAVE A FINANCIAL WELLNESS PANDEMIC THAT DOES NOT HAVE A VACCINE.
“A National Crisis with the Inability to Save” *3
“We have a Pandemic of Financial Literacy”
With the decline of Financial Literacy, both the Co-Founder and CEO, Kevin Cimring, and Chief Content and Education Officer Tony Steuer felt that this condition could be addressed with “ organization and education”. Having access to a cloud-based application that allows family members to quickly access, store, and collaborate on important documents at times of emergency and all aspects of their financial affairs, make it easy for them to learn what documents were needed and the types of documents needed in the case of insurance, investments, banking, health care, and final wishes.
Paperwork (https://www.paperwork.co/), was designed with simplicity, engaging content that enables the user to have it top of mind on their phone, so that they can add and access their important wherever they are on whatever device they have.
*3 Harris Poll
“We have a Pandemic of Financial Literacy” as surveyed by FINRA June 2019.
According to the CEO at Asset-Map Adam Holt:
Improving one's financial wellness is the entire point of engaging a professional in the first place. Processes that advisors use must be more approachable and accessible than ever. That means removing the jargon, intimidation, and unread reports that intend to be helpful but are lost on the client’s limited attention span. To that end, Asset-Map, was designed to enable a consumable but technical conversation on the intentionality of financial decisions - and when you and experienced best-interested advisor to the conversation with an Asset-Map, people start a journey towards achieving financial wellness.
We created Asset-Map Software-as-a-Process experience for financial professionals who provide in-person and remote advice in the wealth management, investment, and insurance markets. Typically included as part of the financial planning engagement process, Asset-Map centers around the digital visualization of household facts to build highly customized, design-thinking presentations in minutes that help advisors, and their customers make better financial decisions. Asset-Map is used by thousands of professionals worldwide, having mapped over 1 million people and $1.4 trillion in financial instruments (https://www.asset-map.com/).
According to Darrell Hickerson, President of Unified Financial Network, there is a staggering amount of debt in this country. Unfortunately, there are also an inordinate amount of people, young and old alike that have learned that if they cannot afford something they will naturally put it on credit. Far too many Americans, do not have basic “financial literacy” skills and lack the knowledge on how credit cards and credit scores work. Having founded Unified Financial Network, Darrell feels that “people need to be educated and learn how to get out of debt by understanding the available, “debt restructuring programs” and to use that saved money to fund their financial goals and dreams. Darrell further states “that it is important that the average person understands that the money that would have gone to creditors becomes “earmarked” for potential savings and investment accounts, where the money can work for them.
While many traditional programs promote financial planning and investment management, they typically have a static view of a client’s financial situation, and do not show the client how to change their spending patterns and positively reinforce the necessary education and behaviors to fund their goals. They typically spend time on future goals with future dollars, while not focusing on their client’s current financial situation which could be a “mess”. The technology platforms that provide “nurturing nudges” that can educate and “painlessly” sweep dollars automatically can create a feeling of “financial wellness” and help customers save for a rainy day, help secure a place to stay out of the rain, and effectively manage their debt and budget. A platform capable of identifying dollars that can be earmarked for funding real lifegoals complements the value of the advisor and institution by showing ways to “automatically save” while increasing share of wallet and creating client loyalty and trust.
REPAYING YOUR LOANS SMARTER IS A GUARANTEED RETURN TO FINANCIAL WELLBEING
The ability to manage one’s personal debt and commit to a debt repayment plan can be psychologically and emotionally stressful according to the Co-Founders of the ChangEd App, Dan Stelmach and Nick Sky. Based upon years of their own personal experience with debt, they realized that one of the prime reasons as to why so many individuals have such a “malfunctioning” relationship with their money and overall finances is that there is no part of the repayment journey that offers instant gratification that many of us look for. They have observed that the average person does not like to talk about their debt and tends to ignore it due to the “debt denial syndrome”. They discovered that by creating a technology that automates the debt repayment process by funding with small amounts, helps reduce stress by removing funds that are nominal and less apt to be missed. By helping people save in small increments, and by simply automating additional payments it helps people become debt-free sooner. The users of the application get to see exactly how many days they have shortened the life of the loan and the satisfaction of seeing this with each penny saved.
BAD WEALTH LEADS TO BAD HEALTH
Money is the biggest source of stress for Americans, research shows. Indeed, a survey by Northwestern Mutual found that money was the dominant source of stress for 44% of Americans, followed by the 25% who said personal relationships, and just 18% blaming work. And data from the American Psychological Association also shows that money is the No. 1 stressor for Americans: “Regardless of the economic climate, money and finances have remained the top stressor since our survey began in 2007,” the results revealed.
Depression and anxiety. People with greater financial stress have more symptoms of depression and anxiety than those who are not financially stressed, according to a 2013 study published in the journal Anxiety, Coping and Stress. And John Hancock’s data reveals that financial stress is triggering physical and psychological symptoms like anxiety and sleeplessness for roughly 60% of workers.
Migraines. A study released in 2017 found that for many people, financial stress is related to getting more migraines. Indeed, people with a certain genetic variation of the so-called CLOCK gene -- it helps control things like body temperature and levels of the stress hormone cortisol; about ⅓ of the population has this variation -- are more likely to get migraines in times of financial stress.
Ulcers and digestive issues. An Associated Press poll showed that people who are under high financial stress are way more likely to complain of ulcers and digestive problems (27% of them said they had these issues) than those who have low financial stress (8%).
High blood pressure and heart attacks. High levels of debt may also lead to higher blood pressure, according to a 2013 study of 8400 young adults published in the journal Social Science Medicine. Treating hypertension can cost you $700 or more per year, data shows Annual expenditures for those treated for hypertension averaged $733 per adult in 2010. What’s more, people with high financial stress are more likely to report they’ve had a heart attack or an arrhythmia (6%) than those with low financial stress (3%), according to AP data.
Disrupted sleep. Well over half of both women (68%) and men (56%) say they lose sleep at least occasionally because they’re worried about money, according to a survey of 1,000 adults released in 2016 by CreditCards.com, a credit card comparison website. And that can be very costly: Americans spend more than $40 billion on sleep aids.
THE VERY REAL IMPACT OF FINANCIAL STRESS IN THE WORKPLACE:
First identified in 2006, Dr. Roger Henderson noticed that the high level of workplace stress is caused by money problems and later published his finding in an AXA report on July 7th, 2010. He referred to this condition as the Money Sickness Syndrome”.
As shared by Steve Wilbourne, the CEO of Questis (www.questis.co), According to a PwC 2021 survey, more than 60% of US workers are reporting that they are financially stressed and bringing it to work. Through Questis, we saw the opportunity to deliver financial empowerment in an entirely new way–a holistic way. Using our People + Technology, and behavioral science-based approach, we empower both the individual and the organization to become better than financially “well”, but financially empowered with tools at their fingertips to attack the root of their individualized problem. For the employee, this means personalized and prescriptive financial coaching to empower them to take greater control of their finances. For the companies, the cultural and business benefits are compounding through improved worker productivity, improved talent retention, reduced absenteeism, lower healthcare costs and enhanced employee experience. Financial Empowerment goes beyond debt and budgeting and therefore requires a collective and integrated ecosystem. Our functional, easy-to-use technology coupled with Financial Empowerment Coaches and personalized, prescriptive wellness plans is scientifically proven to bring sustainable change to individuals’ financial lives and businesses’ bottom lines.
THE FREEDOM THAT BEING FINANCIALLY WELL AND DEBT-FREE CAN BRING TO YOUR LIFE
Living a debt-free lifestyle takes education, patience, dedication, and automation. Changing spending patterns and one’s behavior may take discipline but fortunately, technology can recognize patterns and “automatically” sweep funds that would have been spent on gourmet coffee, hobbies, and impulse buying sprees. In an article published in July 2018, titled “Living a Debt-Free Lifestyle -The Many Pros (and only two potential cons)”, not owing anyone anything is a truly liberating feeling knowing the money you earn, is yours to do with as you please.
credited to www.angelagayehorn.com
As we step into the future, Financial planners should transcend their role beyond that of money managers and become more like integrated life, wealth, and wellness coaches. They will advise clients on investments, banking, healthcare, insurance, taxes, intergenerational financial needs ALL enabled by intelligent software that is life event
architected, cognitive of spending behaviors, identify patterns all aided by behavioral science technology.
FINANCIAL WELLNESS IS A PROCESS AND NOT A PRODUCT
At Lifelogixs we applaud and promote the technology that can educate individuals that want to learn to :
1) Change behavior
2) Change Spending Habits
3) Manage a Budget
4) Set aside Emergency Fund
5) Putting more money into retirement accounts
6) Get a handle on Debt
7) Taking care of those that you leave behind-Life Insurance
8) Locate a Financial Coach
Lifelogixs Strategic Consultancy is built upon the philosophy and tenets of embracing "Health, Wealth, and Happiness " and supporting the technology that supports that philosophy for advisors and financial institution providers. Lifelogixs is a Solutions EXpert and advocate for technology platforms that offers a frictionless solution that transforms customers into savers and teaches independent advisors how to help clients free-up money through easy-to-manage changes to their spending patterns. Lifelogixs seeks out on-demand educational programs and solutions (for both advisors and customers) that (embeds) afford numerous opportunities to trigger alerts and interact on multiple levels and life events.