Please click the play arrow above to watch this 30-minute on-demand webinar recording. To accompany the 8 Steps to Financial Wellness, we created an interactive worksheet / checklist for our clients. Use the form at the bottom of this page to request this checklist if you’d like to use it.
This webinar is presented by our advisor, Jenna Witherbee. You may use the button below to find the more in-depth video series that provides more detail step by step in one on-demand playlist.
8 Steps to Financial Wellness Overview
Our 8 Steps to Financial Wellness provides a structured approach to working towards financial stability and health
Step 1: Establish an emergency fund
Step 2: Set a goal to save at least 5% through your 401(k) Plan
Step 3: Develop your understanding of credit
Step 4: Pay down non-deductible debt by creating a budget
Step 5: Max out your Health Savings Account (HSA), if applicable
Step 6: Increase your 401(k) contribution annually until you reach 10%
Step 7: Save for higher education expenses through 529 Plan
Step 8: Pay off your home early
Importance of Financial Wellness
Financial wellness is crucial for overall health and well-being
Reduces stress and anxiety related to financial instability
Improves sleep quality and mental clarity
Supports physical health by enabling better healthcare and nutrition choices
Enhances emotional well-being and life satisfaction
Step 1: Establish an emergency fund
This bucket of money is not just for emergencies. If it is helpful, you can also think of it as an “opportunity fund.”
Aim to accumulate 3-6 months worth of expenses in your savings
Do not let unexpected expenses bust your budget. Examples include things like a car breakdown, loss of smartphone, pet emergency vet visit, etc.
Consider setting up automatic transfers into a completely separate account that is only for this emergency fund
Step 2: Set a goal to save at least 5% through your 401(k) plan
At a minimum, you should save at least enough in your 401(k) to receive the full employer match. If your company does not have a match, consider starting around 5% and eventually building to 10-15% savings.
Alternatives exist if your employer does not have a 401(k) benefit, or if you are self employed. This includes Simple IRA, SEP IRA, Traditional IRA and Roth IRA options.
Learn about pre-tax versus Roth savings options
Most 401(k) plans have mutual funds as the investment option.
The two main factors to consider when selecting your investments are your age and your personal risk tolerance
Step 3: Develop your understanding of credit
Credit plays a significant role in personal finance management
Credit can be a valuable tool but may lead to financial trouble if mismanaged
Responsible use of credit builds a positive credit history
The 5 C’s of Credit: Character, Capital, Capacity, Credit History, and Collateral are key factors lenders consider
Step 4: Pay down non-deductible debt by creating a budget
Effective strategies for managing and reducing non-deductible debt
Create a budget to track income and expenses
Identify and reduce non-essential spending
Consider debt consolidation to lower interest rates
Consider using either the Lowest-Balance Approach or Highest-Interest Rate Approach for debt repayment
Step 5: Max out your HSA (Health Savings Account) if you are covered in a High Deductible Health Plan
HSAs provide tax advantages for medical expenses
Max out HSA contributions if covered by a High Deductible Health Plan
2026 IRS limits: $4,400 for individuals and $8,750 for families
Contributions are tax-deductible, and funds can grow tax-free
Step 6: Increase your 401(k) contribution by 1% every year until you reach 10%
Gradual increases in retirement savings can significantly impact future wealth
Commit to increasing retirement contributions by 1% each year until reaching 10-15%
Small savings can accumulate significantly over time
Evaluate and adjust contributions annually, especially after receiving bonuses or a raise
Step 7: Save for higher education expenses through 529 Plan
529 Plans are effective for saving for education costs.
529 accounts can be opened through various financial institutions
Contributions can be automated from bank accounts
Funds can be used for qualified education expenses, offering tax benefits
Step 8: Pay off your home early
Considerations for paying off a mortgage ahead of schedule
Assess overall financial health before making extra payments
Explore refinancing options for better interest rates
Weigh the benefits of paying off the mortgage against potential investment opportunities
Please let us know if you would like the 8 Steps to Financial Wellness Worksheet PDF. Use the form to submit your request and we will send it to you in 1-2 business days. Note - You must be a client to receive this resource. Thank you for your interest.