Financial wellness is the state of having a healthy relationship with your finances, where you effectively manage your money, plan for the future, and feel secure in your financial decisions. Achieving financial wellness doesn’t happen overnight — it is a process that may take time and effort to achieve. Asset Strategy likes to describe it as MyWealth Journey and guide individuals or families through the five pillars of financial wellness.

1. Emergency Savings Accounts: Emergency Savings Accounts (or ESAs) act as financial safety nets that can help provide readily accessible funds in the case of an unforeseen expense. These events could be something like medical emergencies, hot water heater, job loss, or even car repairs. We recommend maintaining an ESA with enough funds to cover 3-6 months' worth of essential living expenses. This ‘what-if’ reserve can protect you from derailing your financial stability. Using a Northern Bank high yield, FDIC protected account for your ESA is a great place to build on your first pillar.

2. Budgeting: Setting up your budget is extremely important because it allows you to manage your income and expenditures. Asset Strategy recommends the 50/15/5/30 Rule, where you put 50% of your money toward your ‘must haves / should haves’, 15% toward your ‘pre-tax income for retirement’, 5% toward your ‘Emergency Savings Account (ESA)’, and the remaining 30% toward your ‘could haves / wants’. Asset Strategy has a free interactive financial wellness resource called MyBlocks™, which allows you to visualize your finances and get a pulse check on where you are today.

3. Debt Management: Effective debt management is about controlling your debts to prevent them from hindering your financial progress. There are two kinds of debt: “good debt” and “bad debt”. Good debt is borrowing that helps build wealth or improve financial well-being over time, such as mortgages or investment real estate, student loans, or business loans that generate income. Bad debt is borrowing for items that depreciate or don't generate returns such as credit card debt for everyday purchases that accrue high interest, or personal loans for non-essential expenses like vacations or luxury goods.

4. Insurance/Protection: Insurance serves as a protective barrier against potential financial losses due to unforeseen events. Asset Strategy can help cover life insurance, annuities, long-term care (LTC), and disability insurance. For example, most of us need 5-10 times our income plus an additional $100K/ dependent child in life insurance coverage.

5. Investment for the future: Planning for retirement or other long-term goals through strategic investments is important for your financial wellness. Utilizing tax-advantaged retirement accounts such as 401(k)s, IRAs or Roths allows your savings to grow over time, benefiting from compound interest and tax efficiencies. Making consistent contributions can accumulate significantly, so starting early amplifies the benefits of compounding. Our platform, powered in partnership with Betterment, allows you to open an account today, using a low-cost, professionally managed portfolio.

Establishing and maintaining the five pillars of financial wellness allows you to create a robust framework for achieving financial stability and peace of mind. If you have any questions on your unique financial situation, reach out today!

DISCLAIMER:

Because investor situations and objectives vary this information is not intended to indicate suitability or a recommendation for any individual investor. This is for informational purposes only, does not constitute individual investment advice, and should not be relied upon as tax or legal advice. Please consult the appropriate professional regarding your individual circumstance. Product guarantees are based on the claims-paying ability of the issuing company and assume compliance with the product’s benefit rules, as applicable. There are retirement account risks that could diminish investor returns, such as, but not limited to: low interest rates, market volatility, withdrawal timing and sequence of returns risk, government policy uncertainty and increased longevity. Prospective investors should perform their own due diligence carefully and review the “Risk Factors” section of any prospectus, private placement memorandum or offering circular before considering any investment. Advisory services offered through Asset Strategy Advisors, LLC (ASA), an SEC registered investment adviser. Insurance services offered through Asset Strategy Financial Group, Inc. (ASFG). CIS, ASA and ASFG are separate companies.

Products and services made available through Asset Strategy and Concorde Investment are not insured by the FDIC or any other agency in the United States and are not deposits or obligations of, nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value.