The financial behaviors that may support financial well-being: Part Two
If you are concerned about your financial state of being, learn how to manage your money.
As we looked at in the first article about financial behaviors that may support financial well-being, the Consumer Financial Protection Bureau (CFPB) attempts to define financial well-being as “a state of being wherein a person can fully meet current and ongoing financial obligations, can feel secure in their financial future, and is able to make choices that allow enjoyment of life.” This definition and more detailed discussion of financial well-being can be found in a recent report by the CFPB. There are certain behaviors that appear to support achieving financial well-being. The first two that we looked at were money management and seeking knowledge before making financial decisions.
The third behavior that supports financial well-being is planning and goal setting. At the most basic level people who exhibit this type of behavior may make a spending plan to determine the short-term use of their money. People who plan their spending often have short-term and long-term financial goals that they are trying to achieve. These goals can be part of a formal financial plan or their financial plan may be to secure the education necessary to find a career that generates the type of income necessary to achieve their goals. The bottom line is that they have a plan and goals.
The fourth behavior that supports financial well-being is simply “follow-through.” All the managing, knowledge and planning will not result in financial well-being unless the person follows-through with these behaviors. The CFPB’s report points out that people who follow-through are “future oriented” as opposed to impulsive or short-term thinkers. This type of person saves and invests for the future in order to fund their plans. They are intentional and many times seek an education in order to support their plans and dreams.
People who desire financial well-being exhibit the behaviors that support achieving this goal. If you are concerned about your financial state of being, learn how to manage your money. Seek knowledge from those close to you and when necessary from professionals. Make a plan, set some goals and put those plans in to action.
Michigan State University Extension offers a variety of money management programs throughout the state of Michigan. For more information on making a spending plan, saving money and making money decisions, check out our money management website.
Other articles in this series: