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By Sarah Ruef-Lindquist, JD, CTFA
Do you have financial well-being? Many of us see our doctor and dentist at least annually to be sure we know our physical well-being and have a chance to do what we can, on our own or with the help of medicine, to maintain our physical well-being.
But what about our financial well-being? Is there a test, or a standard, against which we can measure this? How do we know whether we have financial well-being?
According to the Consumer Financial Protection Bureau, “(financial) well-being is defined as having financial security and financial freedom of choice, in the present and in the future.” This includes control over day-to-day finances, the capacity to absorb a financial shock, the financial freedom to make choices that allow one to enjoy life, with a clear path to meeting financial goals. www.consumerfinance.gov/reports/financial-well-being. Each person’s perspective on enjoying life is different, so there’s no “one size fits all” approach.
The CFPB article discusses how social and economic factors can increase or diminish a person’s opportunities, while financial behavior can be guided by personality, attitudes, knowledge and skills. Decisions a person makes every day about the options available to them drive and often determine their financial well-being.
Living within our means is a key behavior for financial well-being. Sometimes that requires tough decisions which can, in the long run, increase your chances at financial security. Making poor decisions can have the opposite – and disastrous – effect.
As financial advisors, we often review with clients just what their cash flow is, and what they might do to improve it. Often this is to optimize their retirement savings over time for the future or encourage their living in a way that will optimize – for as long as necessary – the retirement savings on which they are already relying.
Making a realistic plan with desirable goals is also critical. If the plan is not realistic, it’s a recipe for failure. So is a plan with an end result that is not a compelling goal. It simply won’t motivate the good decision-making required to stick with the plan.
To find out about your financial well-being, see a financial advisor, and then get an annual “check-up.” Having a professional help you analyze and provide input on your situation, while developing a realistic plan for your goals and then reviewing it annually can make the difference between financial security and insecurity both now and in the future.

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