What is financial wellness? How to improve your financial well-being as a family

Digging deep into your family’s finances and feeling prepared for the future is extremely empowering. And financial wellness is an important part of that preparation. 

Financial wellness means effectively managing your family’s finances — including paying bills, saving money, managing debt, and protecting your family’s future with insurance. That sounds like peace of mind to us 😌

Understanding financial wellness

So, why is financial wellness important? And what do you need to achieve it?

Let’s break it down. The term wellness describes being mentally and physically healthy. Financial wellness means you’re financially healthy. TLDR; That means managing day-to-day finances, saving, investing, and managing risk with insurance. 

Financial security also relieves stress — big time — which gives you more time and energy to lead a fulfilling life and raise financially literate children. 

5 benefits of financial wellness for parents and families

Financial wellness provides so. many. benefits. for the entire family. And reminding yourself what you’re working for is a great motivator. So let’s get into the benefits of financial wellness! 

1. Reach retirement goals 💸

Saving for retirement is an important long-term goal that’s accomplished by actively saving money and effectively managing your finances. Even contributing small amounts toward retirement makes a huge difference in the long run.

Be a financially smart family!

Be a financially smart family!

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2. Save for your children’s future 👶🏽

Saving for the future is one of the most valuable benefits of financial wellness — and when you know your own future is taken care of, you can focus on others. That means contributing toward your child’s education, savings account, or even a down payment for their future car or home

3. Cover healthcare and emergency expenses 🩺

Let’s be honest; unexpected expenses happen. You can make it through difficult months without stress when you have an emergency savings fund. 

4. Prepare kids with a strong financial foundation 📚

Remember when we said financial wellness impacts the entire family? When you’re confident discussing financial matters, you can share budgeting skills and savings tips with your children. Talk about empowering.

Check out our tips for teaching teens financial literacy. 

5. Reduce stress ✌️

You’re less likely to feel stressed about your finances when you understand your financial position and feel prepared for the future. 

Building Blocks of Financial Wellness

Financial well-being for the whole family? No problem. These tools will make you a pro in no time. 

• Financial literacy

Financial literacy is the first step toward financial wellness. You know what they say — you have to learn to walk before you run — and that’s certainly true in this case. Financial literacy is a term that describes all the financial knowledge you need — including how to budget, how to save money, and what key financial terms mean. It gives you the proper foundation to put a financial plan into action. 🏃

Greenlight tip: Find educational games, videos, and quizzes in the Greenlight app. All the knowledge you need to improve financial literacy — right at your fingertips.

• Budgeting

Budgeting is one of the basic components of financial wellness. If you understand how much money is coming in, where it’s going, and how much is left to save and invest, you’re off to a great start.

• Goal setting

Managing your finances feels more meaningful when you're working toward something. Knowing that your hard-earned cash contributes to your monthly goals feels great — whether you’re paying off debt or saving for your child’s education.

• Savings and investments

Once you have a budget and goals, you know how much money you have and what you want to do with it. Now you need a plan to get there. A savings and investment plan includes how much money you will put into each savings account or investment vehicle and when. 

For example:

Your goals include saving for retirement and a house, so you contribute $400 monthly to a high-yield savings account for your down payment. At the same time, you contribute $500 per month to your 401K, which is invested in a target retirement fund. You set up your paycheck to automatically contribute these monthly amounts as part of your plan.

• Debt management

Debt management is key to financial wellness and long-term success. It involves borrowing responsibly, making timely payments, and minimizing interest rates where possible.

• Risk management

Improve your family’s long-term financial success by evaluating and managing potential risks. A great way to do this is by enrolling in a health insurance plan and protecting your belongings with insurance — such as homeowner’s insurance, car insurance, or renter’s insurance.

4 tips for teaching financial wellness to kids & teens

Instilling financial literacy in your kids is one of the many ways financial wellness positively impacts the whole family. 

Don’t worry, we’ve got your back. Here are a few tips for talking to kids and teens about money.

1. Include them from an early age

It’s never too early to talk to kids about finances. Initiate age-appropriate conversations with them about the benefits of saving, investing, and budgeting. Even better? Include them in family financial discussions. Doing so allows children to ask questions and learn what financial terms mean.

Pro tip: You’re not on your own. Teach kids about financial literacy with educational podcasts and interactive games like Greenlight Level Up™.

2. Practice budgeting

Practice makes perfect when it comes to budgeting. When your kids start making money, including allowance, share your budgeting template and help them complete it. Make it fun by taking them to a coffee shop or setting up the kitchen table with their favorite snacks. 

Sticking to a budget will boost their confidence and their savings accounts. A win-win.  

3. Let them make their own financial decisions

They say you learn best by doing — and we agree! Once they have the tools and knowledge, let your kids budget and spend their money independently. You can start small by giving them a weekly allowance and letting them spend or save it. Over time, their financial wellness will grow, and they’ll have a better — and more practical — understanding of how to manage money.

Greenlight tip: Did you know you can build your child’s credit by adding them as an authorized user on your credit card? Score. 

4. Lead by example

Ultimately, your children will look to you as an example of financial wellness. If you feel confident discussing money, budgeting, and saving… They are more likely to feel the same. 

Financial wellness is a family goal ✅

By taking care of your financial well-being as a parent, you take care of the whole family. And by involving your kids, you also set them up to be financially secure and confident. Not to mention the sense of shared responsibility and success you’ll achieve. Together.

Use Greenlight to start your family on the path to financial wellness. Greenlight offers a cash-back credit card for parents, a debit card for kids and teens, resources that make learning fun, and so much more. Because we’re on a mission to help you raise an empowered, financially-smart family.