WHAT IS FINANCIAL WELLNESS ANYWAY?
When we think of wellness, our physical and mental health typically come to mind first. However, financial wellness is an important, but often overlooked, dimension of our health. In this episode of Money Smarts, our experts provide insights and actionable tips on how to build financial health to reduce stress and gain better peace of mind in every aspect of our life.
Transcript
HOST: Welcome to Money Smarts, a podcast of Summit Credit Union, where we connect people and inspire action to create member and community wealth. As a not-for-profit financial cooperative, Summit Credit Union exists to improve our members' lives and help them reach their dreams. Our Money Smarts Podcast is just one way we engage members in the community in conversations about money that inspire you to spend smart, save more, and take action to build a richer life.
AMY: Welcome to Money Smarts. My name is Amy Crowe, and I’m the financial education specialist here at Summit Credit Union and your host for our time together today. Thank you so much for joining us. We are going to be talking today about financial wellness. Here at Summit, we do a lot of work around this topic so that we can help our members achieve financial wellness.
Let's set the stage for our conversation today. Think back to 2019. Some of us had savings. Some of us had credit card debt. March of 2020 hit. Our lives are dramatically changed. For so many of us, our mental, our physical, and even our financial health changed when the world shut down. We have learned to expect the unexpected and that financial change is going to happen. But there's a statistic out there that says that 72% of us are stressed out about our money, and it is getting higher because of those supply chain issues, the inflation that is affecting our economy, and all of the different things that are happening as we shift out of this pandemic.
And our goal here at Summit is to help reduce that financial stress to help people be more financially well, which is why I'm so excited to welcome to our conversation today two phenomenal, empowered, confident in their finances women who are working here in our financial empowerment department at Summit Credit Union.
We have Jan Koenig, who is our vice president of financial wellness. She focuses on understanding that connection between how employers work to promote financial wellness in their companies.
Now Melanie Ruelas, I'm excited to welcome you. She is the financial wellness specialist here at Summit Credit Union. She's one of our senior lenders. She has been here for years. So welcome, ladies, to our conversation on financial wellness today.
JAN: Thank you, Amy, so glad to be here.
MELANIE: Thank you, Amy, it's a pleasure to be here.
AMY: All right, Melanie, Jan, let's start connecting the dots. And let's start at a very, very basic level. I want to talk about someone's wellness. We normally think of exercise or maybe mental health. But here at Summit, we are doing a lot of work, and we want to talk about it today, about that financial wellness. So, Melanie, how about you start out by telling us a little bit about, what is the definition of wellness itself?
MELANIE: Sure, Amy. So the definition of wellness is the act of practicing healthy habits on a daily basis to attain better physical and mental health outcomes so that instead of just surviving, you're thriving. And I'm sure that our listeners here would probably say that they would want to vouch to thrive rather than just survive.
AMY: Well, I definitely want to thrive versus survive. What I want to find out from you, though, too is I know that you and I, in conversations about the connection between overall wellness and financial wellness, is I've learned from you that there's eight definitions of wellness.
MELANIE: Yes. So there are different dimensions. And I know commonly, you know, people may have referred to seven or eight of them. And so we'll discuss eight different dimensions that are all tied together, so the first one being the emotional dimension, which is really being in touch with, aware of, accepting of, and being able to express one's feelings. And it could be even those that are around you.
You know, there's that physical dimension, and that's most commonly referred to, as people think about that when they think about the word wellness, and that really is a healthy body through exercise, nutrition, and sleep. There's that social component which is really connecting with, interacting with, and then also contributing to other people and communities. Occupational wellness, this may be something new that people have not necessarily tied together. But really, that’s the search for a calling that involves participating in activities that could provide meaning and purpose.
And then intellectual, you know, that really is being open to new ideas, thinking critically, and also finding ways to be creative. Now there's also that environmental dimension, and that really is surrounding yourself with places that are safe, pleasant, and also stimulating. The spiritual side is that search for meaning and purpose in human existence. And, of course, that final one, Amy, is that financial component. And that really is taking care of your financial health by ultimately accepting your money situation.
AMY: It's so interesting, when I reflect on each one of these as you were talking about them, the spiritual is definitely tithing to your church and how much you want to contribute there. And that occupational wellness dimension absolutely factors into the gender pay gap that we have in our country right now.
And it just makes me think, gosh, when you talked about that thriving, you talked about surviving, and I want to dig deeper into this idea of financial wellness, that last component that you were talking about. So how do we think about that here at Summit? What are some of the ways that you define that for someone when you're talking with them the first time about financial wellness?
MELANIE: Oh, sure, Amy. So, there's been two definitions that I've really like and I've certainly put into our webinars that we offer just to really differentiate the two. And so the first one is, you know, a state in which you can meet your current and future financial obligations, feel secure in your financial future, and ultimately make choices that let you enjoy life. And I think that's insanely powerful.
The other one is financial wellness, which is taking care of your financial health by accepting and understanding your money situation, as I had mentioned in that eight dimension wheel also. And so for our listeners today, you know, they're already taking that first step to learn about the foundations of wellness. And I'm hoping here, talking with myself, Amy, you and your expertise, and also Jan, we'll be able to learn some tools here on how to control, take control ultimately, manage money, and handle finances without the added stress.
AMY: I think it really does come down to that stress factor. And when you were talking, I just had this little bit of an ah-hah moment because the words that struck me is you were talking about secure in your financial future. You were talking about the choices that you have. And accepting and understanding your money situation, no matter where you are today, at Summit, we believe that with education and tips, tools, and advice, and even financial coaching, that you can reach your dreams, no matter what income you have. And it's just being able to connect and really find the things that are going to move you forward.
So I know that we talk often about this financial wellness tie and how they tie to the other dimensions. Melanie, is there a really good example that you like to use with people about how they kind of fit together?
MELANIE: Yes, Amy. The easiest way really to connect the dots is to know that often, with those other dimensions of wellness, there is a cost associated with each of them.
AMY: Tell me a little bit more about that. I guess it's one of those things where, how do you really define that cost?
MELANIE: So let's say, for example, you have a passion for running. And this is something that was super important to me in the past, and it really put all of those dots together. Typically, with running, it is a hobby, which plays a role into the physical, the social, the environmental, and the spiritual dimension. But there is often a missed step with taking into consideration the cost to keep up with that hobby that initially seems to be no cost at all.
And so an example of that would be the cost for a personal trainer, a cost for runs or possibly even a gym membership. It could be travel costs for certainly traveling across the world to participate in marathons and runs. It could be specialized footwear, making healthy meals at home. And the list could certainly go on. And it can be really easy to forget about all of those added costs when you pick up a hobby that seems to be initially no cost at all. And I've certainly been there as well.
And we do have a resource for our listeners, which is called The Budget Worksheet, and that can be found on our website, at summitcreditunion.com, to certainly take a look at what your budget is and what you've certainly been obligated to, to kind of help when you're taking into consideration all of those different hobbies and those different dimensions that are important to you.
AMY: Oh, my gosh, so you just mentioned that if you are a runner, you actually are hitting on five of the wellness dimensions. And like you said, the financial one seems to be the one that we forget about the most. But it's the one that's causing us the most financial stress because you are doing this thing that you love. You could be stressed out in those type of situations when this was meant to be a healthy stress relief for you.
And so when we're working on all of those different things, gosh, how do we find that balance? I kind of want to ask you, Jan, in terms of that balance, when you think about people and you think about when it comes to money and that stress we were talking about, and people may not be mindful. They just may not know the right words to put around what they're feeling, but they do feel just a little bit off. How do we know what we're stressed out about? How is that manifesting itself?
JAN: Sure, Amy. I mean, the bottom line is we are stressed out. It could be anything from a low savings, low savings levels, healthcare expenses. I mean, if you look at it, more than half of all employees have skipped or put off medical care because of the cost. Care for other generations, living paycheck to paycheck, housing costs, limited growth in income. I mean, we are seeing a shift in the job market for better pay but not necessarily happier at the companies they are moving to for the money.
AMY: What do you tell people when you're talking with them, or when you're talking with companies, in your role, sharing with them what we do here at Summit for our Financial Wellness for Employees Program, how do you talk to them about the physical aspects of stress in our lives? What are you seeing? What can someone self‑identify in themselves?
JAN: Yeah, absolutely, Amy. You know, it can impact a person mentally, emotionally, and physically. And that all comes with a lack of motivation and productivity in home life or work as well. Studies show a link between financial stress and back, muscle tension, headache pain, digestive issues, high blood pressure, anxiety and depression, or even substance abuse.
AMY: Gosh, I think about that list, and I feel like I can check that off in a variety of different situations that I'm sure a lot of our listeners can too. We're paying our bills. There isn't enough money in the checking account. Having felt all those things, the stress, the tension, the headaches, all of those types of things, when someone has these medical symptoms and they go see a doctor about them and they learn how to manage them, what can someone do when they're really feeling financial stress? Because I think we don't really talk about what we can do ourselves. It's kind of this taboo topic.
JAN: Absolutely, Amy. That's why at Summit we offer a lot of self-directed resources to help people. They're at absolutely no cost. And they're accessible right on our website. It's anything from project money, one-on-one financial coaching, blogs, monthly webinars, podcast episodes, on-demand videos, tools and worksheets. And then we've also developed an exclusive Financial Wellness for Employees Program. It's recognized within the state of Wisconsin and beyond on how we work with employers on bringing financial wellness into the companies for the employees.
AMY: So let's talk a little bit more about that and what this does for the employees and their employers in general. I recently read a study that said that 61% of human resources professionals say that financial stress has impacted their employee work performance, including thoughts on, during work, how they are going to pay their bills and when they can actually retire, and do they have enough money for it? So when you're talking to these companies, Jan, in your role here at Summit, why would someone want to introduce this financial wellness component into their employee benefits package?
JAN: Sure, Amy. What I have found is there's common questions that employees feel very difficult to talk about openly. Many people are living paycheck to paycheck. And this is not something employees feel comfortable speaking to the human resource department about. Having an outside partnership that can guide and offer solid advice is extremely impactful on both the employee and the company's bottom line.
AMY: Jan, what can employers do to help their employees reduce stress as part of their benefits?
JAN: Well, Amy, from my research, many organizations lack offering a financial wellness benefit. And that's part of why we created the program here at Summit Credit Union. Our program was designed to teach people to learn to love their finances and feel financially well. Our goal is to reduce stress brought into the workplace and at home by providing educational resources so that financial overwhelm can be reduced, and happiness and confidence can be increased.
As I had mentioned earlier, our program offers live and recorded webinars, an online education platform, along with a variety of tools and worksheets. Our financial wellness program is 100% confidential, and there is no cost to the employer or the employee, making it a real added benefit to a current offering package.
AMY: Let's say someone happens to be an employer that offers the Summit financial wellness program to their employees. One of those options is a one-on-one confidential financial appointment. They connect for this one on one. Melanie, tell me a little bit about that experience of how this person can change that mindset.
MELANIE: Absolutely. Initially, when we sit down and talk with someone, we really want to learn about what their goals are and ultimately where they want to be, learn a little bit about what they're struggling with, and, you know, talk about things that may be going well but maybe where they need some support, or maybe where they need some change. And so we certainly want to be able to give that guidance.
You also mentioned too, a little bit about the mindset. I really try to listen in as I'm having the conversation or even those in our teams here that are coaching these individuals, to really focus on a positive mindset as they're going through this change to ultimately get their finances to where they want to be.
I can tell you, and I know you probably have experience too, that you've certainly met with people that have a negative mindset about money. But yet, they still want to reach their goals. And so we really try to change the perception of money from a negative into a positive. And that really starts with just how they think about money ultimately making them feel empowered that they can reach their goals.
And so, you know, I really recommend, if there's somebody that’s saying that they will never reach their goals, to really turn that phrasing around. And it might be just starting with a Post-It note and putting that in front of you every day, that you look at it, to really try to change your mindset. So instead of saying, I cannot reach my goals, change it into, I can reach my financial goals by learning how to budget and really set boundaries on my spending.
Another example could be if you tell yourself that, I'll always live paycheck to paycheck, and I know we've talked about that here today, change that into, I can create a savings plan for myself, and I really can learn to love savings. You know, we really do want people to feel more comfortable talking about money. And with comfort also comes that added confidence, Amy.
AMY: Oh, I love that, with comfort comes confidence. I think you can feel very empowered when you have the education, the tips, tools, the advice, the confidential advice. So how do we do that? How do we build that confidence? Is there something that we normally work with people on?
MELANIE: Yes. So we do have a five-step guide here at Summit that we use to really build that foundation of financial wellness. And it starts with creating a budget. And I know earlier, I mentioned that we have that budget worksheet available on our website. And there are just a lot of benefits of taking a look at that. And I certainly have had some ah-hah moments myself. But it is a great tool to be able to compile all of the expenses that you have while taking a look at what your income is. And the really neat thing is that that tool will do all the work for you, which is always an added benefit there.
And then the other one, number two, is managing debt really connecting with and taking control of where your debt is at, who you owe, how much you owe, what you're paying on. Ultimately, what is the cost that you're paying to be able to borrow? And looking at, you know, realistically, if you talk about wanting to reduce debt, are you following through and really taking action in doing so?
And then number three would be building that emergency fund to ultimately protect yourself. You know, plan ahead for those unexpected things that come up, whether it's an emergency, could be a medical deductible, and so forth.
Number four really gets people. It's really understanding your needs versus your wants because we live in a society where things are on demand. And we want the new and the now. And it really requires you to set some boundaries and some limits for yourself to ultimately feel financially well.
And then number five is setting goals, and that could be short-term or long‑term goals, to really make sure that you're feeling like you can achieve those goals but also then, Amy, celebrating. And people tend to forget to celebrate once they've set those goals and they've accomplished them.
AMY: I love those five. And one of the things that really struck me when you were talking was the medical deductible. And I think that ties back to, Jan, some of the work you do with those wellness committees and those human resources folks as part of the Financial Wellness for Employees Program, is whether it's a high-deductible healthcare plan, whether it is a regular healthcare plan, those deductibles can be pretty high. They can be $1,000. They could be $2,000, $3,000.
And so when you think about that as a scenario, and, Melanie, I'm sure you've worked with people to help save up a deductible savings account, that could be $100, $200 out of your paycheck that you're putting into a sub-share account, which we do have here available at Summit. You can open them up with zero balance online, make it really easy. You can nickname them, medical deductible. Most of us can't afford a $400 medical expense without putting it on a credit card. That's one of the first things we think of.
And so when we talk about how Summit really wants to be able to help employers, work with employees, reduce their financial stress, do it at the place where they're getting their paychecks. And then I also think about women. I think about how Summit is really focusing on women. Most women take care of a lot of the errands, a lot of the shopping, especially when you have a family, and that's not even including any of the single women out there. And so when we are really thinking about, and additionally, that gender pay gap, how are we able to build that financial wealth, reduce that financial stress. And here at Summit, we talk a lot about women and finances. And I know, Jan, one of the things that you do when you talk to employers is also about those retirement accounts and how important that is to be able to save up to build wealth.
I recently saw a statistic, Jan, that said that when a woman gets divorced, they're actually taking about a 20% decline in their income after their marriage ends, which makes it so much more important to be able to have a resource at work that's confidential.
JAN: Yeah absolutely, Amy. I talk to HR directors about this all the time.
AMY: Melanie, what are your thoughts on that?
MELANIE: It had me thinking, Amy, as we were just in this conversation that I remember listening to a presentation that was powerful. And what the presenter had said was that, I always wanted to make more money, but I never learned how to live within the budget that I had. And that was just super powerful.
AMY: Yes, Melanie. In fact, that makes me think of a statistic that I had just read the other day, and it was, and it just really sticks with me. Eighty percent of women are more likely to be impoverished in retirement. That's frightening.
MELANIE: Oh, absolutely, it certainly is. And that's why we want to set that foundation here to really help people build that confidence in their finances and ultimately feel financially well.
AMY: Because the more we can teach women about saving for retirement early, the less they are going to potentially be in poverty in retirement because we live longer than men. But the more we can be confident not only in how we manage our personal finances but how we manage our investing, we will be stronger. We will be more empowered. And I feel like there's an outlet for women to lift each other up when it comes to our finances. Jan, we were talking about that taboo.
JAN:Mm-hmm.
AMY: That people don't like talking about their finances. I think as women, we need to lead. We need to start having these hard conversations. We need to start lifting ourselves up and start educating each other to be able to reach those dreams that we really want to accomplish in life. And, Melanie, I know we try to do this with our monthly public sessions. I know Financial Wellness for Employees has sessions available as well that are live. It really gives people an opportunity to ask those money questions in a confidential way or to connect with us if they're thinking about doing that.
I know it really breaks down some of that vulnerability and embarrassment. What are kind of your closing thoughts on some of the things that we offer to help people improve their financial wellness?
MELANIE: Yes, Amy, absolutely. You know, I think here at Summit, we certainly have a variety of options available that can really ultimately meet the needs of everyone. So if people like to learn virtually, they want to get on a live webinar and ask those questions, they can certainly do that. If they want to listen to a podcast, and that's where they want to start and then get connected with a coach, they can certainly do that as well. And I think we're really setting the stage for empowering women to own it ultimately in their financial lives, to really help them realize what their full potential is personally.
AMY: All right. So, Jan, if you are a company who wants to learn more about Financial Wellness for Employees at Summit Credit Union, how can they connect with you?
JAN:Well, first, I'd like to say we'd love to hear from you. And we can be reached at financialwellness@summitcreditunion.com.
AMY: And, Melanie, I know we talked about those five steps that were so important to increase their financial wellness. If someone wants a complimentary financial review here at Summit Credit Union, one-on-one coaching, how can they reach out and be connected with a coach?
MELANIE: Yes. So they can use that same email address here, Amy, at financialwellness@summitcreditunion.com, and we'd be happy to get connected with a coach as well any time.
AMY: Well, thank you, Melanie, Jan. I love working with you in the financial empowerment department here at Summit Credit Union. I love conversations like this where we can just share what we know, we can empower women, and just let them know a little bit more about how they can improve their financial wellness, which then ties to their overall wellness in general. So, ladies, thank you so much for spending the time with me today. I really appreciate your expertise.
JAN: Thank you, Amy.
MELANIE: Thank you so much, Amy.
HOST: Join us next time for our Money Smarts Podcast to get more tips, tools, and advice on how you can own your money. Discover more Money Smarts at summitcreditunion.com. Like us on our Facebook page, tweet us, or pin something from our Pinterest boards. That's all for today. Thanks for listening, and remember, it's your money, own it.
