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NEWS | Oct. 25, 2022

Financial Wellness | An important part of whole person well-being

By Aime Lykins, PSNS & IMF Public Affairs

As the holiday season approaches, it can be a time of financial stress and insecurity for many. A wellness topic that is frequently overlooked when discussing personal well-being is financial wellness—which can impact people in many different ways. Financial wellness is a state of financial well-being in which you can manage bills and expenses, pay debts, weather unexpected financial emergencies and plan for long-term financial goals such as building college funds or saving for retirement.

FOUR PRINCIPLES OF FINANCIAL WELLNESS

1. Budgeting
Creating and sticking to a budget lays a foundation to build financial well-being. It provides a roadmap to manage day-to-day finances, prepare for financial emergencies and plan for the future.

2. Debt
Managing long-term debt, and eliminating consumer debt, can reduce barriers to saving and long-term financial planning. Knowing how to carefully manage credit can also increase your credit score, which can give access to better borrowing rates for mortgages, auto loans, and other large purchases.

3. Savings and Investments
Long-term savings and investments can provide financial security and peace of mind for retirement planning. Short-term savings allows for cash on hand to cover home repairs, vacations or other planned expenses without having to increase debt.

4. Protection and Insurance
Insurance or emergency funds can protect you financially from unexpected emergencies. Insurance can cover losses due to fires, floods or health emergencies. An emergency fund, on the other hand, covers other crises. Both can help prevent you from using long-term savings or going into debt.

FIVE STEPS TOWARD FINANCIAL WELLNESS

1. Create a Budget
You’ll need to know where you’re spending your money each month. Creating a budget will help you live within your means and set realistic financial goals for your future.

2. Build an Emergency Fund
Part of your savings should immediately go toward an emergency fund equal to three to six months of household income. This can help cover expenses should you lose your job or if an unexpected expense occurs.

3. Reduce or Eliminate Debt
Understand how much debt you can manage. The more debt you have, the less you can put into savings or investments to grow your wealth. Pay off debt to improve your credit score so you can comfortably borrow money for large purchases like a house or car.

4. Save and Invest
Putting aside money for savings from each paycheck can add up. Consider different short-term savings options such as traditional savings accounts or money market funds.

5. Plan for Retirement or Other Long-Term Goals
The sooner you start saving toward retirement, the more money you’ll have when you get there. Understand how different types of retirement resources, such as Social Security, retirement savings, federal retirement, Thrift Saving Plans, and annuities, can work together to provide you with income in retirement.

The Department of the Navy Civilian Employee Assistance Program offers a financial boot camp webinar series and a financial record keeper through Magellan Ascend, which is accessible by employees of Puget Sound Naval Shipyard & Intermediate Maintenance Facility by visiting magellanascend.com. Additionally, PSNS & IMF’s Command University offers free retirement planning courses to help employees take charge of their long-term financial wellness. Command University course offerings are available via the Code 1180 SharePoint page or by calling 360-476-1441.