(MoneyHippo.com) – People should think about several facets of planning beyond budgeting and paying bills to achieve true financial wellness. Financial planning involves covering current obligations, saving for the future, eliminating or minimizing debt, and creating a budget. While those aspects are essential, planning differs from overall financial wellness, which encompasses your entire economic life and uses planning tools as building blocks to get there. Here are four ways the two differ.
- Budget: Creating a budget is part of planning, but the ability to execute and stick to that plan and its parameters might be a measure of wellness. The resilience to deal with unexpected expenses or setbacks indicates a higher degree of financial wellness.
- Stress: While planning your finances might cause stress as you figure out how much will go toward bills, savings, and investing, you’ll know you’ve achieved financial wellness when you have a solid grasp on monetary issues — eliminating the need for angst. Essentially, planning and preparation buffer you fiscally, allowing you to build a higher degree of confidence and enjoy an overall lower level of anxiety.
- Hitting the goals: Financial wellness is a measure of security. It likely means you have and abide by a budget, set up an emergency fund, and are actively paying down debt and saving for the future. So, planning helps to achieve those goals, allowing progressive degrees of financial security.
- Manager vs. planner: Planning is setting up the building blocks of your economic life, whereas wellness is taking a bird’s-eye view of your entire financial picture — a more managerial perspective.
Financial wellness isn’t a static state any more than physical wellness, for example — it depends on the circumstances and inputs. In this case, the concept will ebb and flow with your economic journey. Regularly assessing the condition of your finances and your plan will ensure you stay on track. Staying educated on economic topics will help reduce monetary stress and put you more in control of monetary issues, keeping you on solid financial ground now and in the future.
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