4 Ways Having a Financial Plan Helps Improve Your Wellness

When you think about improving your wellness, your mind likely goes immediately to eating healthier, hitting the gym or scheduling some much-needed self-care.  

But new research finds that there’s one more area of your life you might want to focus on: your finances. According to the Northwestern Mutual 2022 Planning and Progress study, 87 percent of Americans who work with a financial advisor reported feeling somewhat or very happy in their lives, versus 72 percent of those who don’t work with one. 

Furthermore, those without an advisor are literally losing some sleep: 81 percent of those with an advisor say they sleep well or very well — but only 65 percent of those without one could say the same.  

“What’s emerging here in the social science is a pretty clear link between Americans’ financial wellness and their overall wellness,” says Christian Mitchell, executive vice president and chief customer officer at Northwestern Mutual. “In other words, while money may not buy happiness, the study suggests that financial planning may help people reach a greater level of contentment and peace of mind.” 

That makes sense, considering money is consistently a top source of stress in Americans’ lives. But doing some comprehensive financial planning with the help of an advisor can help alleviate some of that anxiety — and may help you sleep better at night, too. Here’s how.  

You'll have a clear plan for tackling debt.  

There are few people who don’t have debt of some kind, whether it’s the credit card balances you can never seem to get rid of or a student loan you feel like you’ll be paying off until you retire. Debt can weigh heavily on your mind if you don’t feel like you’re making progress on it, but you can work with an advisor to come up with a repayment plan that helps you chip away at your balances and prioritize which debts make the most sense to pay off first.  

You’ll feel more confident about saving for retirement.  

When you were just starting in the workforce, contributing a small percentage of your paycheck to a 401(k) probably felt like enough. But with each year that goes by, it’s easy to ask yourself: Am I behind in retirement? And exactly how much do I need?  

There’s no one-size-fits-all answer — it all depends on the life you want to live in retirement. An advisor can help you figure out what your target savings number should be, and they can offer a range of options that reinforce each other to help give you peace of mind that you’ll have the money you need for your dream retirement. They can also help account for certain risks to your retirement income and adjust your plan as needed if your retirement goals or life circumstances change.  

You’ll have peace of mind that your family is financially protected.  

Growing your money is one part of a financial plan — but protecting it is another. For starters, an advisor can help you determine how much to keep in an emergency fund so you won’t go into debt if a big surprise expense hits. They can also help you figure out how much life insurance you need to cover your family’s expenses should something happen to you, and help with a plan to replace income in case an illness or injury prevents you from working for a time. 

You’ll feel good knowing you’re making progress on multiple goals.  

Multitasking isn’t just something you do in the office. Most of us have various goals we want to save for, but often forget about the fun stuff over the practical stuff. Financial planning includes figuring out how much to set aside for various goals so you can juggle saving for retirement, your kids’ college, a new home and next year’s vacation, all at the same time.  

An advisor can look across these goals and help you determine the best way to save for each of them, with the bigger financial picture in mind. Perhaps there’s a tax-advantaged way to set aside money for a goal, for instance. Or maybe a longer timeline means you can take more risk and invest in the markets for certain goals. Because everyone’s circumstances are a little different, no two financial plans will be the same. So it’s important to find an advisor who will look at your situation and tailor a plan to your family’s priorities — and make sure it’s flexible enough to change when your goals and dreams do.  

Follow Christian Mitchell on LinkedIn