Financial Wellness

From a young age, we’re taught all about physical wellness. We learn that daily physical activity is important for a healthy body and mind, and we understand the difference between healthy and unhealthy habits.

Unfortunately, financial wellness isn’t taught in most schools. Most of us never learn the basics of budgeting, careful credit management, or the benefits of long-term savings as children. Yet achieving financial wellness can significantly reduce stress and anxiety, and lead to a more balanced life.

In short, financial wellness is security. It means living a financially balanced life and being able to meet your current financial obligations and future expenses--both planned and unplanned. It’s setting yourself up for a prosperous future.

Achieving financial wellness takes work. Similar to physical well-being, being financially unhealthy is a lot easier than being financially fit. Financial wellness takes daily dedication and sometimes sacrifice, but the result is worth it.

With these simple tips, anyone can achieve financial wellness.

1. Create a budget

A budget is a map that will guide you on your day-to-day financial wellness journey. It will help you make sure you have enough money to meet your financial obligations each month and can help you save money long term.

When budgeting, many choose to use the 50/30/20 rule—that’s 50% of your income dedicated to necessary expenses, 30% for “nice-to-haves” or “wants,” and 20% set aside for savings.

Here’s how to create a budget:

Step 1: Determine your monthly income. How much money do you have coming in every month from your paycheck, side hustles, Social Security, etc.? Put that number on the top of the page.

Step 2: Add up your expenses. Examine your monthly expenses and categorize them as necessities or “nice-to-haves.” Necessary expenses can include your mortgage, cell phone bill, utility costs, student loans, credit card or vehicle payments, and food expenses. “Nice-to-haves” can include things like monthly streaming service subscriptions or eating out at restaurants.

If your necessary expenses exceed 50% of your monthly income, it’s a good idea to scale back on your “nice-to-haves.” The larger the financial cushion you allow yourself to have, the less stress you’ll experience at the end of each month.

Step 3: Save. Set aside 20% of your monthly income for savings. This includes retirement, an emergency fund, and other investments. Ideally, you should save up enough of an emergency fund to cover a few months of expenses, which will help you weather adversity like the loss of a job, a broken furnace, or unexpected car repair.

Our convenient savings calculator can help you set a savings goal. And you can set up automatic savings transfers to put aside a portion of your monthly income into a savings account or secondary checking account.

If there’s a significant expense on the horizon, like a new car or furnace, consider setting up a sinking fund. A sinking fund is a way to save money for large expenses by setting aside a little each month.  You can conveniently add to your sinking fund with internal transfers between Associated Bank checking or savings accounts.

Step 4: Adjust your budget as necessary. Your initial budget will act as a great starting point but expect it to change over time. Think of it as a living, breathing document.

Set aside some time each month to review and assess your financial situation. Did you stick to your budget over the last 30 days? What needs to be adjusted? Are there any added expenses on the horizon?

“Visibility is key,” explains Ilana Nagib, product owner at Associated Bank. “If you want to stay on top of your daily expenses, set up transaction alerts on your Associated Bank checking account. That way, you’ll know what’s coming in, and what’s going out.”

If you need help creating a budget, one of our local bankers help.

2. Think before you swipe

If used correctly, credit cards can be a very useful financial tool with many benefits. However, you’ll want to keep your balance below 20% of your total credit line. This will help to improve your credit score and keep your monthly payments manageable.

Also, be aware of the true cost of interest. If you charge a $30 tank of gas, that charge can easily balloon up to $300 or more if you only make the minimum monthly payment. Paying off your entire balance before the end of each month can help you avoid these charges.

When possible, try to use a debit card for small, everyday purchases. With a debit card, you’re only spending money that you already have, and there’s no chance of getting a surprising credit card statement at the end of the month. Plus, debit cards can include perks like team store discounts.

If you need to improve or establish your credit history, an Associated Bank Secured Visa® Credit Card can help.

3. Stop impulse buying

Impulse buying is the fastest way to abandon your budget and it’s easy to see why it’s such a problem.

In 2021, the average person was exposed to between 6,000 and 10,000 advertisements every day. Add those up, and most of us will encounter between 2.2 million and 3.6 million ads annually.

These advertisers have access to better tools and more data than ever. They know your interests almost as well as you do and can use that information to target you with extremely effective advertisements.

Then, there’s our brains, which are wired to spend money. It feels good to browse a store or click the big yellow BUY button on a website because brains release a powerful mixture of feel-good chemicals. These chemicals only stick around for a short time, which is why many people experience almost immediate buyer’s remorse.

Thankfully, there’s an easy way to combat impulse spending—just wait a week! This will allow you to set aside emotion, think logically, and give your brain a chance to overcome those feel-good chemicals. You’ll be surprised how that “must-have” product seems unnecessary after a short amount of time.

But what about those small, often daily impulse purchases? It’s that coffee you can’t live without or that delicious restaurant that’s way more appealing than cooking at home. While small, these impulse purchases can add up over the course of a year and throw off your budget and savings goals.

For example, that daily $3.50 coffee adds up to $1,277 over the course of a year. Likewise, spending $50 a week at a restaurant amounts to $2,600. That’s a lot of money! Many of us would have a hard time spending $2,600 at a restaurant all at once, and yet spreading it out over a year seems acceptable.

Once you identify these small purchases, ask yourself this question: What else could I do with the money? If you can come up with a better use for the money-- like investing, home improvements, saving for an emergency, or even starting a college fund for your children-- the daily temptation will fade away.

4. Talk to a pro

“If you’re just starting out on your financial wellness journey, there’s no substitute for speaking with a financial advisor,” suggests Detra Rodgers, director of channel engagement at Associated Bank. “Financial advisors can help with investments, retirement, and long-term savings.”

A financial advisor can also help guide you through the best strategy for your unique situation, assess your long-term financial future, and make adjustments as necessary. No matter where you are in Wisconsin, Illinois or Minnesota, we have private bankers and advisors near you who are equipped with the financial expertise you need. Find an advisor near you.

Another option is to visit your local Associated Bank branch location. One of our financial experts can guide you on your financial journey, help you set goals, and achieve financial wellness.