If the very idea of financial planning makes you break out in hives, you’re not alone. A new study found that perceived financial well-being — feeling secure about not only the state of your current situation but how well you’ve planned for the future — holds the key to your overall well-being. Your financial security can affect you as strongly as job satisfaction, relationship stability, and physical health combined.
Certified Financial Planner Board of Standards ambassador Jill Schlesinger calls money the “most concrete expression of every neurosis we carry. Every neurosis we have, we can express it around money,” she said. “Someone dealing with your finances can really be transformative — it’s like removing an anvil from your back.”
First, know thyself, financially
Regardless of your financial state, everyone can benefit from taking stock of what stability means for you. Kristin Wong, freelance journalist and author of “Get Money: Live the Life You Want, Not Just the Life You Can Afford” knows how uncomfortable that feels. “It can be hard to sit down and look at the numbers, especially if you know you’re in mounds of debt but you’re not sure how bad it is,” she acknowledged. “But think of it this way. Yes, it’s unpleasant now, but you’re saving yourself from more unpleasantness later.”
For many of us, it all starts with understanding our own habits. Ms. Wong suggests starting by tracking your spending right down to your 3 p.m. vending machine run. “This is such an eye-opening exercise because it forces you to think about your spending a little bit more, which then makes you more aware of how you’re spending,” Ms. Wong explained. “Writing down your spending gives the transaction a sense of tangibility.”
Next, figure out what you want
Whether you’re a recent graduate trying to figure out how to handle student loans, a retiree looking to maximize your 401(k), or anything in between, we all want our money to work for us. “Americans need to understand that [financial planning] isn’t just for the wealthy,” explained Geof Brown, CEO of the National Association of Personal Financial Advisors. “It’s important to sit back and reflect on your own individual circumstances, understanding your long-term goals.”