What does financial wellness look like?

Financial Wellness

by Rick Kahler


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A lot is written on the symptoms and consequences of poor financial health. These days, we are surrounded by news stories of financial disease in individuals, corporations, and nations. Financial instability seems to be the new normal.

A recent survey done by Jean Chatzky found that 15% of US citizens are insolvent and 55% live month-to-month. Only 27% are "financially sound." Just 3% are considered wealthy, which is defined as having a net worth of over $500,000. This is a very low threshold; I've yet to talk to anyone worth $500,000, who considers themselves wealthy.

The signs of personal financial disease are easy to spot: spending more than you make, not having one year of living expenses saved, not funding your retirement plan, no (or negative) net worth, a history of poor money decisions, and chronic emotional distress around money.

What we don't hear much about are examples of financial wellness. I've asked a number of people what financial wellness looks like. I've received a wide array of answers, but the most common goes something like, "I'm not sure I can define it but I know it when I see it!"

I Googled "definition of financial wellness" and got some interesting responses. One site, TheGreenLivingExpert.com, defines financial wellness as "having a clear understanding of your financial situation."

I know a number of individuals meeting that definition who are as far from financial wellness as South Dakota is from China. Having a clear understanding that "Oh, I'm so deep in debt I'll never be able to get out" is not exactly financial wellness.

Other definitions of financial wellness include:

  • Not having to worry about finances
  • Having a written financial plan
  • Having finances in place to achieve financial goals while adhering to basic principles of financial planning
  • When you're not stressed about money
  • Living within your means and having debts and obligations that you can meet
  • No longer having to worry about retirement
  • To be in such a financial situation that hopes, dreams, and future endeavors are realistically possible and attainable
  • Having the ability to live within your financial means.

If I could boil all these definitions down, I might conclude that financial wellness is having adequate cash flow to live my desired lifestyle for the rest of my life without anxiety or fear. This to me defines financial independence rather than financial wellness.

NetWellness.org got closer with a definition of "working towards balance in how we think and feel about money, having an understanding of our finances, caring for finances so that we can handle financial changes, and being comfortable with where money comes from and where it's going."

Financial wellness certainly includes financial independence, but it is more than that. Financial wellness needs to include what a person thinks, feels, and believes about money. I know many people who are financially independent that I would not describe as having financial wellness. Some of them have almost debilitating guilt around having enough, live in fear that their money will run out, have such poor physical health that they can't use their money to do the things they love to do, or lie awake nights worrying about what legacy they should leave to their children and grandchildren.

Financial wellness, then, is a balanced integration of financial, emotional, and physical health. It comprises having adequate cash flow, sufficient assets, the absence of illness, and the presence of emotional well-being. It is the sum of everything that goes with being financially, emotionally, and physically sound.


Rick Kahler, Certified Financial Planner(r), MS, ChFC, CCIM, founded Kahler Financial Group, and became South Dakota's first fee-only financial planner in 1983. In 2009, Wealth Manager named Kahler Financial Group as the largest financial planning firm in a seven-state area. A pioneer in the evolution of integrating financial psychology with traditional financial planning profession, Rick is co-founder and co-facilitator of the five-day intensive Healing Money Issues Workshop offered by Onsite Workshops of Nashville, Tennessee. He is one of only a handful of planners nationwide who partner with professional coaches and financial therapists to deliver financial coaching and therapy to his clients. Visit KahlerFinancial.com today!

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