Understanding Financial Wellness and How to Achieve It
• Mac Gardner • June 23, 2021
As the host of season three of the eMoney original podcast, That Makes Cents, I have the opportunity to talk to a variety of guests about topics related to financial wellness, including the culture of money, financial literacy for children, financial therapy, and financial planning as a workplace benefit.
The first episode kicks things off where I think all successful financial journeys should begin—with financial education. My guests were Tina Hay, Founder and CEO of Napkin Finance, and Jedidiah “Jed” Collins, CFP® and CEO of Your Money Vehicle.
The first thing that struck me about these two financial education entrepreneurs is how passionate they are about financial literacy. I asked them to share with the audience what led them to become champions of financial education. Their stories demonstrate how smart, educated people can still struggle with financial literacy.
After pursuing a liberal arts education in film and technology, Tina discovered in business school how challenged she was by not having a finance background. Her visual learning style helped her master financial concepts and ultimately, she founded Napkin Finance to teach others how to take control of their own financial educations.
While Jed’s path was also born out of the frustration of not knowing where to begin on his journey to financial wellness, it started in the world of professional football. When he realized he lacked the financial savvy to manage his income, he dove into the learning process, became a CERTIFIED FINANCIAL PLANNERTM, and later founded Your Money Vehicle to teach young people to understand their finances.
Defining Financial Wellness
eMoney defines financial wellness as a positive state of being resulting from a healthy relationship with money and the impact it has on other aspects of your life. I really like how this definition encapsulates the broad topic of financial wellness. I asked my guests to expound on this with their own definitions.
Tina pointed out that financial wellness means different things to different people, but the consistent element is peace of mind. She also reiterated that financial health is tied to physical and mental health and with it, one can achieve balance and stability.
Jed uses the analogy of money serving as a vehicle to help you go in a specific direction and reach a particular destination. He added that money has always been a noun and his aim is to make money act as a verb—something that moves you forward through life when you put it to work for you.
The Rising Awareness of the Need for Financial Wellness
One of the things I really like about the podcast format is the unexpected paths our conversation can take. While discussing current events which have brought the urgent need for financial education to the fore, we not only touched on the impact of the pandemic but also how retail investors using technology have disrupted Wall Street and the rise of cryptocurrencies. With today’s 24-hour news cycle, people are bombarded with all kinds of financial information that very few understand.
My guests pointed out that people need to be able to filter out this type of noise and focus on what financial wellness means for them. Americans are realizing they aren’t as prepared for emergencies as they should be. Financial education has been pushed aside and as a result, people are ill-prepared to deal with their money issues. Improving financial education would prepare people to better weather these financial storms.
Helping Clients Achieve Financial Wellness
I couldn’t have had two better guests to start the podcast season about financial wellness. Their mission is to improve the opportunities for financial education. Helping people talk about and understand money is a great start.
While we talked about technology and how it can close the gap in getting information to the people who need it, it can also be a double-edged sword. With tips coming at them from TikTok, Instagram, and other social media channels, people need to be wary of information that is packaged as educational but is ultimately a sales pitch. This is where financial professionals can help.
Answering not only your clients’ questions about what is happening with their financial plan but also their questions about what is happening in the economy, in general, will help them see how their plan fits into and is impacted by the bigger financial picture.
Tina recommends encouraging clients to talk about finances with friends and family as these discussions can open them up to more opportunities. Help them understand that while it’s great to begin their financial education early, it’s never too late to start.
I asked my guests what they suggest for financial professionals who want to advise clients from a wellness perspective. Tina reminds us that transparency is very important. “Younger generations are very cynical about who is helping them and how much they are paying them.” She added, “They want to know what value they are getting. Providing education is a differentiator and adds a lot more value than traditional portfolio management and advisory services. Advisors need to use education to empower their clients not just manage their money.”
Jed’s advice is that financial professionals need to humble themselves. “When you have certifications like CFP® after your name, you are seen as a knowledgeable professional and this shifts the power dynamic in your direction. It can be intimidating. Meet clients where they are. Let them know you are not there to impress them with your financial knowledge. You want them to leave a meeting understanding their plan.”
Use Storytelling to Teach
I like to say that we are all just a collection of stories. Stories have been used as tools for teaching throughout history. It shouldn’t be any different when helping people understand their finances.
Both Tina and Jed have developed methodologies that deliver financial education by telling stories. Jed said it best when he talked about how he likes to use “edutainment” to explain financial concepts. “Use stories to connect to people—look for things that interest and use analogies that teach. Even if it’s corny, make them smile.”
There is so much more I could say about Season 3, Episode 1 of That Makes Sense, but I invite you to give it a listen for yourselves.
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