April is Financial Literacy Month, and as we start to imagine a post-pandemic world, wellness has taken on deeper meaning in both our personal and professional lives.
From health and safety to navigating personal financial concerns, there are many challenges on our plates. Companies and employees are working together to carve out space and resources that promote and protect wellness—not only physically and mentally, but financially.
With all this in mind, what does it mean to invest in financial health, and where do we start?
It takes a village. Because financial stress affects all of us, it’s essential to learn from each other. Creating a financial wellness support team can mean everything from opening up with your friends and family to building a network through retreats and events. Workplace benefits and financial professionals can also help you build financial literacy, find useful resources, and avoid common pitfalls. A collaborative, holistic approach to financial wellness can open the door to new ideas as well as greater support.
Start small and start today. You can’t take care of yourself without taking care of your finances. Starting today, no matter where you are, with small incremental steps can make an impact on the financial future you’ve envisioned. Become a lifelong learner when it comes to your finances, knowing that the work that you do on financial wellness will touch other areas of your life in a positive way.
Hone a holistic approach. The coronavirus pandemic has reminded us how much our wellness is interconnected with the world around us. Similarly, each area of our personal wellness is interconnected. Financial, mental, and physical wellness is all about balance. Financial wellness shouldn’t be thought of in a vacuum, and you are at your best at home, at work, and balancing your portfolio when your mind and body are well rested and healthy.
Keep an eye on both the short and long term. A survey from Employee Benefit Research Institute (EBRI), found saving for a comfortable retirement is a challenge, with just 62% of workers confident they will have enough put away.Part of financial literacy is learning to balance long-term planning with short-term needs. Effectively managing budgeting, credit, and debt can give you a major advantage when it comes to achieving long-term goals. Track monthly bills and spending, identify debt with the highest interest rates, or look for opportunities to consolidate and refinance what you owe.
Leverage the workplace. There’s often an awareness gap between the workplace benefits companies offer and how employees engage with and use what’s available. Make sure you’re making the most of what is offered by plugging in and learning more about your workplace benefits, whether it’s maximizing a 401(k) match or mastering key terms and definitions for your equity compensation plan.
Read: Want more money for retirement without a lot of effort? Ask your company about this perk
Learn market basics. Investing is an important life skill at any age. Whether you’re a self-directed investor, or someone looking for professional financial support, or a combination of both, learning basic investing terms and strategies can help you uncover opportunities, understand your risk tolerance, and identify your financial goals and priorities—gaining greater financial literacy along the way. Get started as early as you can, stay with it, and think about building a well-diversified investment portfolio over time. Today there are countless free educational resources (including our own at morganstanley.com/ideas).
Factor in education costs. Education can be expensive, so it’s key to build a strategy for managing costs—whether repaying student loans, saving for a child’s future, or heading back to school. Research whether your workplace offers any education-related benefits or consider opening education-focused accounts like a 529 for a child’s future.
Donate thoughtfully. Giving back is one of the most rewarding ways to put your money to work, but it requires planning. Start by creating your own philanthropic mission statement to identify where and how you’d like to give, then look for available vehicles that match.
Putting it all together
Taking care of yourself financially means finding the freedom to live life on your terms. Small financial literacy steps like understanding the value of your workplace benefits, whittling down a manageable level of debt, building an emergency fund, and having a backup plan can change the game—and your future.
Financial wellness is truly interconnected with every aspect of our lives, touching our mental and physical wellbeing, families, and communities. It can have a ripple effect, helping you reduce stress, improve overall health, and create space for what’s most important to you. To truly achieve financial wellness, taking a holistic approach is a step in the right direction.
We look forward to continuing to raise the bar.
Krystal Barker Buissereth, CFA, is managing director and head of financial wellness at Morgan Stanley at Work.
Disclosures: This article has been prepared for informational purposes only. The information and data in the article has been obtained from sources outside of Morgan Stanley. Morgan Stanley makes no representations or guarantees as to the accuracy or completeness of the information or data from sources outside of Morgan Stanley. It does not provide individually tailored investment advice and has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The strategies and/or investments discussed in this article may not be appropriate for all investors. Morgan Stanley recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a Financial Advisor. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.
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