How Does Financial Wellness Work?

When I started working on my money life, I wasn’t sure HOW to get healthy with money. The terms were mysterious to me and I thought the feelings of fear and shame would eat me alive. I developed this formula of the 3 essential elements of financial wellness over a decade of research. These are the essential components to making it work well.

Aspect 1: Attention on Your Numbers

Without attention on your numbers, this never-ending stream of financial data is moving through the cloud with your name on it, and you don't actually know the upshot of it. It's tempting to hang out in the hypotheticals (i.e. "I just need to save more and I'll be fine). You can be very honest and connect with others, but without attending to your actual numbers, you're taking best guesses and operating on a set of general hunches that everything's probably okay in your accounts.

So how does one pay attention to their numbers? Tracking regularly. Having a numeric plan (aka budget) and then matching your spending, saving and earning reality to it, in the numbers. It doesn't have to be aggressively detailed and you don't have to track 1,000 different categories (unless that makes you happy!).


I recorded this audio for you on Dec 5, 2018. Somewhat of a love note and an apology to "just the numbers". 


There are tons of tracking systems out there. Some banks even offer free tracking as part of their sites now. However, it works best when we can track all accounts in one place and see inflows and outflows overall. My personal favorite is YNAB.com, which stands for You Need A Budget!

Here is a helpful article from the YNAB folks if you'd like to read more: https://www.youneedabudget.com/5-truths-revealed-in-a-one-on-one-budget-coaching-session/.

Aspect 2: Deep Self-Honesty

Without deep self-honesty, you can crunch the numbers all day long, and you can connect with others around it in various ways, but how do you know whether your numbers are matching up with living your best life? How do you know where you are on the spectrum of sucky life to best life, according to your own values?

You can be doing all the "right" things that Money magazine says to do, but if you're not taking the time to dig in and find out what's true for you TODAY, then in some ways this life opportunity is passing you by.

This is also true for updating my deep self-honesty. Part of the "deep" aspect is that the self-honesty be current. If you've been chasing something out of inertia, it can feel good to have a path or an outcome to head towards. But when did you last take stock to re-examine if it's really the best fit for you, given what you know now?

I see this coming between couples all too often. They may have a sense of each others' values, and then continue to act accordingly until more information arrives. If one or both people are not checking in with themselves regularly, all of a sudden it can seem like the other person is something to fight, out of alignment with what feels right to you today. (When in reality, they may just be acting from an outdated paradigm.)

OK, so how do you experience deep self-honesty? Some practices that help me are journaling, finding someone I can trust to talk with regularly about this stuff (who isn't personally affected by my financial choices), if I've set financial goals and am consistently not meeting them, I review whether I actually do want those things.

Aspect 3: Connection

Without connection, we tend to get too isolated and stuck in one or more of the difficult emotions (fear, anger, scarcity, low self-worth). Without connection, we can also be more susceptible to denial and rationalization. I've also noticed that sometimes, peoples' expectations can be way high or way low compared to average realistic human behavior. Someone may beat themselves up for not saving "enough" money, and feel too ashamed to talk about it. It's incredibly healing to have that conversation with a trusted person. Reality checks are priceless (whether I like them at the time or not!).

"When I is replaced with We, even illness becomes wellness." ~Malcolm X

Meditation can be a wonderful support for cultivating inner resources to deal with all 3 elements of the formula. Especially for those of us who can be emotional, fearful, anxious, and/or hard on ourselves.

I recorded this meditation for Soothing Financial Stress. Feel free to listen as often as you would like. Each time we sit, breathe, and let go of distraction as much as possible, we build the muscles inside of peacefulness, acceptance, and ability to focus.



So how do all 3 elements of the formula come together? When I know my numbers, then conversation becomes less vague and we can get more traction within connection. When I've taken the time to discover deep self-honesty, I can ask relevant questions and have plenty to offer the conversation. I can even drive the conversation, if the other person wants to practice the formula but doesn't have as much experience with it yet. Connection starts when I decide to be vulnerable enough to venture into this territory with another human.

I help clients learn and practice the healthiest financial behaviors for their particular situation. Practice is the key word. We’re not going for all-or-nothing…we’re going for, do the best you can, and when you step off the path just do your best to step back on.

Elements of a Financial Wellness game plan:

  • 1. Know your net worth. Assets minus debts. It really helps to have that as a starting point. It’s the “YOU ARE HERE” on the map of your financial health.

  • 2. Create a monthly, predictive spending plan. (It’s like a budget, but sounds less restrictive!)

  • 3. There will be a baseline of income and expenses, probably, that stay relatively similar from month to month. However, we look at the calendar of the month ahead to see what special items need to be accounted for in the spending plan.

  • 4. Have an accountability partner. Someone with whom you can be honest, and who possesses at least some of what you want in your money health. This is likely not someone who has the stock answer of, “Oh, go ahead and buy it. You deserve it.” This is someone who is able to know how important it is for you to reach your goals, and knows that instant gratification is rarely going to be the best answer. I still send my monthly plan to my accountability partner, every month. When I know that someone I trust has seen my plan, I am about 300 times more likely to stick with it.

  • 5. Write your goals somewhere you will see them at least each month. Maybe set a reminder in your phone. I currently have a goal of getting my net worth to increase past a certain number this calendar year. This helps me weigh out how much I actually want to buy something, and colors how loose or tight I choose my monthly spending plan numbers to be.

  • 6. If you’re a 1099 contractor, keep up with your profit and loss statement monthly, and put aside estimated taxes into their own savings account so the money is there when it’s time to pay your quarterlies. (A very rough rule of thumb is you can expect to have to pay at least 20% of your net profit, which is gross profit minus deductible expenses.)

  • 7. Set up a system that works for you (such as YNAB.com, QuickBooks.com or FreshBooks.com if you invoice your small business clients, or Mvelopes.com) to track your expenses and be able to tie them back to your spending plan. Some people even use cash in category-designated envelopes. (So retro! So effective!)

  • 8. I have a weekly, what I call, Numbers Lounge. It’s a designated time (at least half an hour, usually) to look at my accounts, balance my checkbook, update my categories and make sure I’m on track for the month. I generally do this on Sundays. Pick what works best for you practically, and make a recurring appointment in your calendar if you need reminding. Some of my clients have Money Mondays or Fiscal Fridays.

  • 9. I do suggest hiring someone to do your taxes, if it’s anything beyond 100% straightforward. I used to do mine through Turbo Tax, and have been relieved to have a professional handle it instead. I still need to have my information organized and provide it in a timely manner. But for the nitty gritty of changing tax laws, it seems wisest to get a good specialist for the annual task of filing income taxes.

  • 10. Patch the leaks. Many people have money pouring out of their accounts, without being aware of the impact of them adding up. $20/month here and there to 4 different companies sounds a lot different than $960 per year! 

  • 11. I highly recommend Simple Bank for personal banking. I have been delighted with their no-fee account. If you'd like to try it and see if you like the interface, use this link and we both get $20 as a gift!

Those are items that I think apply to everyone.

Then after those are taken care of, the fun of personalizing your system begins! Some people need support to loosen up and discard some of the fear that has them be perhaps too conservative with their financial choices. Yet others are very good at spending money, and might benefit from tips and strategies to practice not spending when they usually would. So often couples benefit from having a neutral third party to navigate ongoing disagreements about money. Finding agreement on a spending plan that everyone can live with is truly wonderful.

What I remind people (myself included), is that there is no WRONG choice. Also, I can change my system if and when I need to, when I get more information or my preferences change over time. We have a variety of right options that will lead us to different pots of gold at the end of whichever rainbow.