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Actions Video: What Financial Wellness Means to You
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Financial wellness can be hard to define, simply because personal goals, standards of living and economic factors (e.g., housing rates) differ from person to person or fluctuate. For most people, however, claiming financial wellness is based at least on two major points: feeling secure and sound money management.
Lack of financial wellness is common
Prudential partnered with Harris Poll to conduct a survey of more than 4,300 U.S. adults to see how they were faring in financial wellness. Key findings of the Employee Self-Assessments Research1 by Prudential include:
- 25% spend their full paycheck (or more) every month
- 20% never or sometimes pay bills in full each month
- 51% have monthly debt over $1,000
- 43% never or rarely plan for irregular, large expenses
- 49% feel very or somewhat unprepared to fund expenses if they were to become disabled
- 65% could not cover 6 months’ expenses if they lost their income
Additionally, people are struggling to achieve financial wellness in regard to retirement and estate planning. Only 19% contribute to a defined contribution (DC) plan if they have access to one, while 39% feel very or somewhat unprepared to fund retirement. 31% would dip into their retirement funds to cover monthly funds if emergency money ran out. 66% don't have a written will, while 31% feel very or somewhat unprepared for maintaining their family's financial lifestyle if they died prematurely.
Money woes breed stress
Perhaps unsurprisingly, the lack of financial wellness among Americans is stressful, with 57% of polled full-time employees asserting they're very or somewhat stressed about their financial situation. Top stressors include saving for the future (67%), paying monthly bills (57%) and credit card debt (42%).
Bottom Line
The results of Prudential's interviews and survey indicate that money management is by no means a simple trick. Nevertheless, achieving and maintaining financial wellness isn't impossible. A combination of strategic thinking, smart saving and controlled spending, coupled with guidance from advisors or other financial professionals, can help set you on the path to good financial health.
- 1 Prudential, 2017 Financial Wellness Study.
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