Your Guide to Financial Wellness

BRAVA asked the financial wellness experts at Summit Credit Union’s financial coaching program to share insights about how to relieve stress in the everyday lives of Americans. At Summit, CEO and President Kim Sponem says that every employee is a financial educator, and Summit’s free financial wellness coaching puts that promise into action.

Wellness isn’t just a state of being. It’s a process, and a journey. At Summit, we often talk about how finances fit into a healthy life — and in short, that answer differs from one person to the next.

Many experts, including Summit’s financial wellness team, use a concept called the 8 Dimensions of Wellness, developed by Rutgers University professor Peggy Swarbrick. The model’s message is simple: Wellness is determined by a variety of factors, all of which have an effect on one another. Your occupational, emotional, spiritual, environmental, financial, physical, social and intellectual wellness interact to make up your overall wellness.

Improving any of these dimensions can enhance your quality of life. Similarly, ignoring one of them will come at the expense of your overall wellness. But financial, one of the eight dimensions, affects each of the others in one way or another.

WHAT IS FINANCIAL WELLNESS, AND HOW CAN YOU IMPROVE YOURS?

Financial wellness is just as important to a healthy life as any of the other dimensions. And it doesn’t mean simply paying off debt or following a budget. Financial wellness is about your relationship with money. It’s about the thoughts and feelings money gives you. It’s about how you interact with your money every day. It’s about financial freedom, and how confident you are that you’ll be able to reach your financial goals.

No matter how much money you make or your emotions around money, one thing is true: You’re somewhere on your journey to financial wellness. Along this journey, you’ll have plenty of moments of triumph and victories to celebrate. And still, challenges and questions may arise. But there are steps you can take to live a better life, and that’s exactly what we at Summit are here to help you do.

“Financial wellness is important for everyone, and that’s why education and empowerment are at the center of everything we do,” says Kim Sponem, CEO and president of Summit.

“People often talk about the stress they feel around finances — and we’re here to help transform that stress to a feeling of confidence.”

Financial wellness can impact your mental health as well. Mental health professionals know that financial stressors are one of the most common causes of anxiety and depression today. And this stress isn’t just confined to moments when you’re thinking about your money.

“Everyone has a different set of things that causes them anxiety or discomfort,” says Anna Moffit, executive director of the National Alliance on Mental Illness (NAMI) Dane County. “And these stressors can affect all different aspects of your life, like your relationships, your work productivity, quality of sleep, family life and more.”

If finances are causing you stress, prioritizing your wellness and reaching out for help is the first step in the right direction. No matter what the next step on your financial wellness journey looks like, you aren’t walking alone — we can help you get there.

“Our coaches and experts have worked with so many people in so many different situations, and we can apply all of those learnings to help get you on track for success,” says Sponem. “We know that helping people improve their financial lives makes for stronger communities, so we do everything we can to ensure people have the unique tools and knowledge they need to make the best financial decisions for exactly where they are in life.”

PLANNING FOR LIFE EVENTS

Sometimes, every goal you have — personal, financial and otherwise — revolves around the particular life stage you’re in.

BUYING YOUR FIRST HOME

When you’re considering buying your first home, the first step is meeting with a mortgage loan officer to discuss your credit history, income and assets, and down payment.

Claudine Carvalho, a Summit mortgage loan officer, believes building wealth through home ownership is extremely important — but she wants Summit members to be able to maintain their lifestyle long after they move into their house.

“The first thing we do is review your monthly budget and discuss what kind of safety net is in place for things like home repairs,” says Carvalho. “So many people we work with feel like there are too many obstacles in front of them to even start dreaming about owning a home, but we work together to build a roadmap. They won’t achieve their vision overnight, but with the right money habits, they’ll get a few steps closer to owning a house each day — and it’ll feel amazing.”

Summit’s mortgage loan officers can help you navigate these steps when buying a home:

A word on credit. The higher your credit score, the lower your interest rates. If your credit isn’t where you want it to be, we’ll help you make a plan to improve it. According to Carvalho, “If you have to decide between saving and reducing debt, I usually encourage starting with paying down debt. That will get you a better credit score, a better rate and lower closing costs.”

The right loan for you. We’ll look at how much money you have coming in and going out, plus any savings or debt, and show you the loan options, rates and terms that make the most sense for you.

Understanding all of the costs.  Your total monthly mortgage payment is made up of four factors known as PITI: principal, interest, taxes and insurance. It’s important to add all of them up when figuring out the monthly payments you’ll be making.

The lowdown on down payments.  You could make your new home a reality with as little as a 3% down payment. On the other hand, a greater down payment has advantages as well, such as paying less in private mortgage insurance (PMI). Also ask if you’re eligible for programs that provide assistance with down payments and closing costs for first-time homebuyers who meet certain income requirements.

FAMILY-MOTIVATED FINANCIAL SHIFTS

As your family situation evolves, your financial goals will likely evolve too. Rachel Slesarik, a senior lending advisor at Summit, knows all about helping people reorganize and reprioritize even the best-laid plans. Her advice? Get clarity on the “why” behind your goals.

“Most financial goals without an emotional component end up failing, so keep your ‘why’ close. Why do you want to stick to your budget or build up your savings? What emotions will you feel when you achieve your goals? What might that mean for your family or for your future?

Below are some of the milestones Slesarik and her fellow lenders coach people through most often.

GETTING MARRIED

Slesarik encourages these two steps before you tie the knot so you can start your married life on the same financial page.

Know your (combined) worth.  Measuring net worth — which is what you own versus what you owe – gives you the most complete picture of your combined finances.

Decide how you want to set up your accounts. Choose whether you want your finances to be joined, separate or in between.

BABY ON BOARD

Thinking about having a baby, have one on the way or already knee-deep in diapers? These suggestions are good starting points:

Do your research. Check your insurance coverage for prenatal and birth-related costs. Estimate the cost for maternity and paternity leave, as well as daycare.

Open a savings account for baby’s college costs. A recent study shows a child with a savings account in their name is six times more likely to go to college. “The sooner you start saving for college, the better,” says Slesarik. “We recommend opening a 529 plan and saving a little each month. The key is to get in the habit of setting money aside regularly.”

Draft a will and get life insurance.  These actions ensure that your family will be taken care of should something happen to you.

DIVORCE

“Breakups can be extremely painful and are typically loaded with emotion,”says Slesarik. “There are also a lot of financial hills to climb, so we often run the numbers with our members so they can make the most strategic decisions possible.”

Here are some things to navigate and how we can help.

Adjust your budget and goals. With your change in income, you’ll need to take a look at how much money you have coming in versus going out. Determine where you’ll need to cut back, and if you have to update your future goals in the process.

Do housekeeping on joint accounts. You’ll no longer be sharing accounts, so you’ll need to separate them and make a few updates. Be sure to change beneficiaries for retirement accounts and other funds. Also consider refinancing loans to reflect your new financial situation and start building up individual credit again.

Get your team together. With so many nuances and details in the divorce process, you’ll want to have help from the experts. Consult with your employee assistance program (EAP) at work, with a financial coach, a retirement planner and a divorce expert. They’ll know the questions to ask and steps to take to help get you through it.

Consider whether to keep your house. If you and your former partner were homeowners, deciding who will keep the house (if anyone) is a difficult decision. If you do keep the house, you’ll want to think about refinancing your loan and determine what steps you need to take to continue making the mortgage payments.

AGING PARENTS

Caring for aging parents can put a tremendous strain — both emotionally and financially — on the primary caregiver. Slesarik’s advice to people navigating this situation: Treat this stage as a marathon, and pace yourself so you don’t burn out too soon.

If you’re in this situation, here are some things you may want to get a head start on.

Get your bearings. Take inventory of your parents’ assets, consolidate their financial accounts and get access so you can help manage them if needed.

Start a dialogue. Ask the important questions: Do your parents have retirement income? Long-term care insurance? Do they own their home?

Prepare for the “what-ifs.” Have your parents establish a durable power of attorney and health care directive, which gives you legal authority to handle financial and health care decisions if your parents become incapacitated. Take a look at their savings for expenses like out- of-pocket health care and assisted living — these bills can be costly, and it’s best to prepare in advance.

Call on the experts. Tax issues can be complicated, so consult a professional to see if you might be entitled to benefits. Also be sure to establish a will and estate plan.

STARTING YOUR OWN BUSINESS

Personal finances are often directly impacted by your business situation, and according to Dana Hoffmann, vice president of business services at Summit, confidence is key in both spaces.

“So many business owners we work with worry that taking out a business loan would be impossible,” says Hoffmann. “Whether you’re struggling through a case of imposter syndrome — the self-imposed idea that your success is due to luck and not talent — or insecurity about your current financial standing, there’s no harm in starting a dialogue so we understand what you want to do and can help figure out how to get you there.”

If you’re contemplating going out on your own, Hoffmann and her team are ready to help you explore what’s possible. “Your budgets and business plans are yours to own,” says Hoffmann. “But if you need a sounding board or a roadmap, we’re all in.”

Where to start? “Dig into your credit history and score,” Hoffmann advises. “Personal finances can impact your business finances, so a spotty credit history makes business credit much harder to obtain. But we’re always happy to discuss your history, your score and strategies you can develop to improve it.”

After that, make a plan. A solid business plan builds confidence so you know what steps you need to take to get your business off the ground and what you need to do to qualify for a loan — now, or in the future. You can find helpful resources and programs at sbdc.wisc.edu and sba.gov.

REACHING A HEALTHIER FINANCIAL SPACE

Finances are just one dimension of wellness, but their effect on your entire life can’t be overstated. Remember that financial wellness is a journey. The road to improvement — both in terms of finances and wellness as a whole — is rarely linear. There will likely be ups and downs, wins and losses. It’s all part of the growth process.

Connecting with Summit is the first step to getting to a healthier financial space. With the guidance, expertise and accountability you’ll receive by working with a coach, you’ll have the support system you need to take that first step. And the next. And the next — until you’ve reached exactly where you want to be.

“We know that no two people have the same journey, and there are many paths to financial wellness,” says Sponem. “But when you can go beyond managing your money and reach a place where you start truly owning it — that’s a powerful feeling.”

SETTING THE STAGE FOR RETIREMENT

Whether it’s in the back of your mind or right around the corner, planning for retirement can feel like a tall order. Too often, people put off planning for retirement because they’re embarrassed about their lack of progress. But as Summit VP of wealth management, Jody Brown explains, there’s no need to dwell.

“More than ever, we’re meeting with women who are apologetic and ashamed of their financial situations,” says Brown. “But instead of apologizing, give yourself permission to be imperfect! Once you get past the ‘woulda, coulda, shouldas,’ you can turn the page and start planning for the future.”

Here are a few simple steps to help build momentum toward reaching your retirement goals:

Find out how much you need. According to the Retirement Confidence Survey from the Employee Benefit Research Institute, only 48% of people know their retirement savings needs — and those who determine how much they need end up saving more.

Take advantage of an IRA. On top of your company’s 401(k), start contributing to an IRA. Both Roth and Traditional IRAs offer tax-free growth of assets.

Keep your investments balanced.  Diversifying your investments and managing risk go a long way to ensure the security of your retirement funds. Make sure the risk you’re taking on and the accounts you’re using are aligned with your target retirement date!

Boost your savings with your income.  Every year, or whenever you get a salary bump, increase the amount you’re saving for retirement. You won’t miss the money at the time, and you’ll be glad you did when retirement comes!

Securities sold, advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member. FINRA/SIPC, a registered broker/ dealer and investment advisor. CBSI is under contract with the financial institution to make securities available to members. Trust services available through MEMBERS Trust Company. Not NCUA/NCUSIF/ FDIC insured, May Lose Value, No Financial Institution Guarantee. Not a deposit of any financial institution. FR-3715617.1-0821-0923

CREATING A FINANCIAL WELLNESS PLAN

No matter your goals, these habits will provide a solid foundation.

Know What You Have

  • Track your monthly expenses carefully so we can help you create a realistic plan.

Budget for Self-Care

  • As you build your monthly payment plan, don’t forget the most important investment there is: YOU! Reframe budgeting for the “extra” things you deem important as a form of self-care.

Build an Emergency Savings

  • Every time you put money away, you’re showing that you value yourself — and that can provide a big mental lift. Aim to build three to six months of monthly expenses in a savings account.

Plan Ahead

  • Write down what you want for your finances in five years and be specific, so we can help you determine the steps needed to get you there.

Talk About Shared Financial Goals

  • Bring your loved ones along on your financial journey so they can encourage you, check in on your progress and avoid tempting you with things that will lead you astray.

Be Flexible

  • Life happens. And whether that means something amazing (new baby!), or something not-so- amazing (a blown engine!), it might mean the strategies that used to be a fit aren’t right for you anymore.

YOU CAN HELP EMPLOYEES

Financial Wellness for Employees by Summit is an employer-sponsored program that gives your employees the tools not only to make savvy money decisions, but to feel confident in the process.

Here’s what we bring with the program:

  • Complimentary financial education, coaching and planning — right in your workplace.
  • A custom series of in-person or virtual events where Summit financial coaches and advisors address your employees’ most pressing money questions.
  • Exclusive, on-demand financial education modules your employees can use at their own convenience — at work or at home!
  • Prioritizing your financial wellness doesn’t just help your employees feel more empowered with money — it helps them stay focused and engaged throughout the workday, which benefits everyone.
  • For more information on this program, email us at [email protected], give us a call
    at 800-236-5560 or visit SummitCreditUnion.com.
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