Achieving Financial Wellness: Tips for a Secure Future

In the past, the term “financial wellness” was mostly applied to wealthy investors. In the wake of the pandemic, amid job losses, medical bills, and high inflation, it has felt utterly out of reach for all too many Americans — especially those in communities historically underserved by traditional financial institutions.

Yet financial wellness is not only possible for anyone but is a fundamental aspect of living a secure, fulfilling, and equitable life. No matter what your financial situation looks like, you can take steps to build a happier, healthier future for yourself and your family.

This article will demystify financial wellness and provide actionable financial tips to help anyone in any demographic bridge the gap toward financial empowerment.

What Is Financial Wellness?

Financial wellness refers to the overall health of one’s personal financial situation. It is the peace of mind you feel when you are not worried about money, have control over your finances, have concrete financial goals with a plan to reach them, and are confident about your financial future. You can get there through a wide variety of paths — some of which you might already be taking or thinking about.

Ways Anyone Can Get Their Finances on Track

Here are some financial strategies that make your money work for you.

1. Getting Financial Literacy Training

Improving financial literacy is the cornerstone of achieving financial wellness, especially for those who have historically been marginalized by mainstream financial systems. Understanding basic financial concepts, such as budgeting, saving, and managing credit, can transform how you think about your monetary health. Seek out free financial literacy training programs through your employer, a local credit union, or an equity-driven nonprofit organization in the financial sector, such as a Community Development Financial Institution (CDFI).

2. Budgeting

Budgeting is the first step toward taking control of your financial life. It involves understanding your income and tracking your spending to identify potential savings. Creating a detailed budget allows you to make informed financial decisions and ensures you are not spending more than you earn. Tools and guidelines from various financial institutions (such as a CDFI) can simplify the process of setting up and maintaining a personal or family budget.

3. Saving for Emergencies

Building an emergency fund is crucial for financial stability. This fund acts as a financial buffer that can keep you afloat in times of medical emergencies, unexpected repairs, or sudden unemployment. The goal is to save enough to cover three to six months of living expenses. Starting small and saving consistently can gradually build a substantial emergency fund, which is vital for preventing debt accumulation during financial crises.

4. Understanding Credit

A sound understanding of credit is essential for financial wellness. Credit scores and reports determine your eligibility for loans and the interest rates you pay. They can even affect your job prospects. Educating yourself about how to read your credit report and improve your credit score can lead not just to better financial decisions but also to better opportunities and benefits.

5. Managing Debt Effectively

Effective debt management involves understanding the types of debt you have and the terms of repayment for each of your loans. Prioritizing the repayment of high-interest debts can save you from spiraling interest costs. It’s also advisable to explore consolidation options if you have multiple sources of debt. Financial counselors and resources can provide strategies for debt repayment and help in setting realistic goals for debt reduction.

6. Utilizing Inclusive Banking Options

For those in unbanked or underbanked communities, finding financial institutions that offer inclusive banking options is key. These options may include lower fees, microloan programs, and financial products tailored to individuals who don’t have extensive credit histories. CDFIs often check most of the boxes that serve these consumers and, in many ways, can offer one-stop shopping for financial wellness strategies.

7. Building Financial Confidence Through Continuous Learning

Confidence in managing your finances comes from continuous learning and engagement. Take advantage of free and low-cost local and online financial education opportunities. These can help dispel many myths and misconceptions people have about money management. What you learn could change your life.

Financial wellness is not out of reach, even for those who have faced significant barriers. By taking informed steps toward improving financial literacy, utilizing resources from inclusive institutions like CDFIs, and continuously seeking knowledge and support, financial health can become a reality for everyone.

Take Steps Toward Financial Wellness With the Economic Justice Fund

The Economic Justice Fund (EJF) is a mission-driven, nonprofit lender dedicated to helping Americans pursue the American dream. We believe that all Americans, regardless of income, race, gender, or zip code, should have access to fair, affordable financing.

At EJF, we offer low-cost loans to help you reach your goals safely and responsibly. You can complete our application in less than five minutes, and one of our loan specialists will quickly review it. Loans are funded in as little as one business day.

EJF is certified as a community development financial institution by the U.S. Department of the Treasury. In addition to ethical, equitable loans, we provide financial training and credit-building services to empower individuals in underserved communities. Read our success stories and choose the financing plan that fits your needs!