5 Steps to Building a Family Financial Wellness Plan: What You Need to Know


Key Takeaways:

  • Family financial wellness is a crucial indicator of future financial stability. Without it, you may not meet your basic needs or long-term goals.
  • Educating yourself and taking steps toward financial wellness is easier than you might think.
  • These five financial wellness activities can provide a foundation to protect your loved ones with a family financial wellness plan.

If you had to give yourself a grade for financial wellness, how would you rate yourself? You might give yourself an A+ as a saver and planner or a solid C because you struggle with spending more than you earn.

Whatever your grade might be, one thing is sure: You want to protect your family. And to do that, you need to know which financial wellness activities to focus on for a solid foundation.

We’ve got you covered. With these seven steps, you’ll be well on your way to getting an A+ in family financial wellness.

Table of Contents

What is Family Financial Wellness?

Family financial wellness is the basis of how you prepare for the future. It requires you to take a good, hard look at four key areas:

  • Savings
  • Expenses
  • Debt
  • Risk protection 

"When you reach the state of “wellness” with your finances, you have a healthy money mindset and are comfortable with your future."

Five Financial Wellness Activities Every Family Needs

Since money and stress are two sides of the same coin, take some time to work on key financial wellness activities. The result could be a stable financial future for you and your family. Here’s how to plan for family financial wellness.

1. Set Up An Emergency Fund

A Federal Reserve study found that almost 40% of adults couldn’t cover a $400 unexpected expense. However, this is exactly what an emergency fund is for: to protect you and your family from financial emergencies. 

Relatively small expenses, like a vet bill or car repair, can be devastating if you don’t prepare ahead of time. 

But if you have some cash in savings? You’ll have less anxiety the next time your car breaks down.

Wellness action step: Open a separate savings account for your emergency fund and set up an automatic transfer every time you get paid to build your savings.

2. Spend Less Than You Earn

Spending less than you earn is crucial to building family financial wellness. If you’re overspending, you won’t have money to save for college, put a down payment on a new car, or build a comfortable retirement fund.

For help to spend less than you earn, a budget is an excellent tool.

Think a budget is hard work? Think again. Plenty of budgeting apps, programs, and worksheets are available for free, making it easy to get started.

Wellness action step: List your monthly income and expenses on a sheet of paper. Include savings for big-ticket items like your emergency fund, Christmas gifts, and family vacations. If you’re spending more than you earn, review your expenses to find areas to cut back.

3. Buy Life Insurance

Risk management is one of the four pillars of financial wellness, and it includes planning for the unthinkable. Because let’s face it: you won’t live forever.

A life insurance policy can give you peace of mind knowing your family is taken care of if the worst should happen.

Buying life insurance isn’t as scary as you think. We use Predictive Protection™ to determine how much life insurance you need. You could get a policy in as little as five minutes.

Wellness action step: Get a free quote for life insurance from The Ultimate Life Insurance Calculator and find out how affordable it is to protect what matters most. (You won’t even have to give us your name or email address.)

4. Pay Down Your Debt

Debt is a significant drain on your finances. When you pay off your debt, you increase your financial security and make room to spend money on the things you enjoy (without feeling guilty!).

The key to getting rid of debt is to pay more than the minimum monthly payment. You generally have two options:

  • Debt snowball: Start by paying off your lowest balance, and work your way up from there.
  • Debt avalanche: Pay off debt from the balance with the highest interest rate to the lowest rate.

There’s no “one right way.” The important thing is to do it.

Wellness action step: List all of your debts, minimum monthly payments, and interest rates. Decide whether you’ll use the debt snowball or avalanche method and commit to paying a specific dollar amount extra each month to pay down your debt.

5. Save for Retirement

Saving for retirement is the most important financial goal you’ll have in your lifetime. Yet, a 2019 retirement survey revealed that 64% of Americans expect to retire with less than $10,000 in retirement savings.

If you’re decades away from retirement, you may rather spend your money on things that are more fun than saving for retirement. But that’s a big mistake. 

You can’t rely on employer pensions, and Social Security benefits may not be enough. Plus, when you save for retirement, you can reduce your taxable income, which can lower your tax bill.

It’s a win-win.

Wellness action step: If your employer offers a 401k match, start by contributing at least enough to get the maximum benefit. 

Financial Wellness for Your Family

Your finances spill over into every area of your life. If you’re not managing your money, your money will manage you. Your productivity and work performance could suffer when you worry about finances, and you’re left feeling unsatisfied with life.

No one wants that.

Instead of being controlled by your finances, follow these financial wellness action steps to create a better future for you and your family.

And if you’re looking for life insurance, get a free life insurance quote in less time than it takes to brew a cup of coffee.

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