Vanguard BrandVoice: Financial Wellness: How You Can Achieve It

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Can you handle unexpected expenses? Do you overreact to market volatility? What is your outlook for your financial future?

Answering these questions can help you analyze the state of your financial well-being – how well you deal with economic stress and how you react to a booming economy and booming stock market.

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Your financial well-being does not exist in a vacuum. This is an essential attribute of yours complete Well being. So what Is Financial wellness, exactly?

For many people, being well off financially means living in a state of “never”. never experiencing financial stress or anxiety; Never Feeling financially challenged. In short, always happily being satisfied with the state of your finances.

However, financial well-being should not mean a complete absence of financial anxiety or uncertainty. There will be stressful moments in everyone’s life. In fact, some concern regarding financial matters may prompt you to act. Challenging yourself to achieve lofty financial goals can be exciting and rewarding!

Instead, financial well-being means having a strong enough foundation and a clear financial strategy that makes failures more tolerable and financial adversity and healthy risk-taking less challenging.

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Consider how authors Emily and Amelia Nagosky describe wellness: “To live well is not to live in a state of lasting security and calm, but to move fluidly from a state of adversity, risk, adventure, or excitement, security.” And calm down, and out again.”*

Financial wellness is much more than having a solid plan for personal finance and investments. It is understanding how this plan fits harmoniously and dynamically into the context of your life.

So how do you access and maintain financial well-being? You can build a lasting foundation for financial well-being by applying the 4 main pillars of wellness to your personal finances: focus, balance, calm and motivation. Let’s explore each.

A focused investor sets clear goals

Do you have specific financial goals and a plan to achieve them, or do you procrastinate instead of committing to financial actions? Maybe you are a good saver but don’t have clear goals in mind, or you have goals but lack the motivation or knowledge to achieve them.

Being a focused investor means that you:

  • Engaged in your financial situation.
  • Prioritize your financial goals.
  • Don’t run away from your financial to-do list.
  • Excited to strategize and manage their goals.

Meditation is essential for financial well-being as it promotes progress. Without clear goals, it’s difficult to come up with a financial strategy for working toward those goals. And without strategy it is difficult to measure success.

are pawn investors
14% more likely To say they are focused on the longer term.**

A balanced investor has a stable outlook

Financial wellness involves striking a healthy balance when investing, spending or saving, or diversifying risk-taking.

If your natural instincts are not balanced, you may find it difficult to achieve balance. Maybe you prefer to spend more than you save, you’re not comfortable with the risk aversion suggested for your age and money situation, or you’re unsure which allocations or strategies strike a healthy balance.

If you are an investor who practices balancing, you can:

  • Save enough for retirement and other important goals.
  • Have a diversified portfolio that offers growth potential and minimizes market volatility.
  • Accept a reasonable amount of investment risk so as not to miss out on financial gains.

Without financial balance, you can face many negative consequences and miss out on achieving the goals you envision.

are pawn investors
65% more likely To become a self-taught investor.**

A calm investor is patient

If you are a sober investor, you are more likely to feel that your financial plan is on track and see the value in waiting to reap the rewards of a thoughtful investment strategy. Your financial situation doesn’t bother you, foster negative feelings, or cause excessive worry and anxiety.

Being a sober investor means you can:

  • Are comfortable staying in during their financial planning.
  • Can customize your financial decision making as and when required.
  • Less likely to overreact to market volatility.
  • Avoid acting hasty or taking hasty decisions to make up for your financial loss.

You trust the process and take a conscious approach to financial decisions. As a result, you are more satisfied and confident with where you are on your financial journey.

are pawn investors
19% more likely To say they don’t react to volatility.**

A motivated investor has his eyes on the future

Are you seeking financial freedom? What lifestyle do you want in retirement? Are you planning to leave the money for your heirs? Having a vision for your financial future will guide your decisions and strategies today.

You are a motivated investor if you:

  • Have a clear vision of what financial success means to you.
  • Set financial goals that can help you create your desired lifestyle.
  • Understand how financial success fits into the context of your other life aspirations and values.
  • You are honest about the life you want to build for yourself and your beneficiaries.

Whatever your personal motivation for the pursuit of financial well-being, it becomes easier to set the road to success when you have a destination in mind.

are pawn investors
10% more likely That is to say, their investment philosophy is planned rather than spontaneous.**

Put it all together

The 4 Pillars of Financial Wellness are most effective when they work together.

Approaching finance with this holistic mindset is the key to achieving financial well-being. Consider what your health strengths and opportunities are and focus on maintaining those strengths and working on the opportunities.

And remember, being fit doesn’t mean you won’t have to worry or face adversity; This means that those moments are more manageable and less difficult, and that you can move through such experiences effectively and return to a state of confidence and calm.

Ready to work towards your goals?

Your financial well-being is unique to you – how you achieve it should be, too. We are here to help you build and strengthen the pillars of financial wellness while you are there to support your perfect financial life.

Explore Our Resources To help you become a better investor.

Annie Wilson is a senior behavioral scientist at Vanguard. He did his Ph.D. in Marketing from Harvard Business School and a BA in English and Psychology from Georgetown University. Annie is an expert in consumer psychology, theories of judgment and decision making, and experimental research.

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