Actually, Achieving Financial Wellness Doesn’t *Have* To Start With Budgeting—Here’s Why

Money has long been a source of stress for many folks. And thanks to rising health-care costs, layoffs, and the resulting economic plunge, among other related downfalls, the pandemic has only served to magnify that anxiety-provoking effect. In a survey conducted by WalletHub this March of over 750 people, money emerged as the top source of stress among respondents, in fact, with 30 percent of people citing it as their primary concern. Since harboring that financial stress can take as much of a toll on your mind and body as holding onto any other type of stress—particularly when it feels like the only solution is restrictive, rather than reasonable—learning how to improve your relationship with money may be as much about your psychological approach as it is about your budget.

Finding this holistic way in to financial wellness is the topic of the most recent episode of The Well+Good Podcast, during which financial therapist Lindsay Bryan-Podvin, CEO and co-founder of Ellevest Sallie Krawcheck, and founder and CEO of Clever Girl Finance Bola Sokunbi, CFEI, discuss issues like the gender pay gap (yes, women still make, on average, 82 cents to every white man’s dollar), the damaging narratives around finance that propel us toward a poor relationship with money, and more.

Listen to the full episode here:

“Many personal-finance people will tell you that you have to start money-management with a budget, but I think creating that rule for someone who doesn’t want to follow it is simply not going to help,” says Bryan-Podvin in the episode. “So much of the personal-finance media is about cut, cut, cut, and save, save, save, and you’re bad, bad, bad for spending, but in reality, that’s such a small slice of financial wellness. It’s so much bigger than, ‘Can you afford this latte?’”

In fact, this hyper-focus on day-to-day budgeting is pretty misguided when it comes to how to actually improve your relationship with money.

“You want to start by getting clear on your goals and what you want to accomplish in life that money can help you attain.” —Bola Sokunbi, founder and CEO of Clever Girl Finance

To achieve true financial wellness—or the ability to live free from financial stress—a bigger-picture approach, complete with long-term goals, is required. “You want to start by getting clear on your goals and what you want to accomplish in life that money can help you attain,” says Sokunbi in the episode. “You want to have a true ‘why’ behind why you want to achieve financial wellness, which might not be something you come up with right away, but instead, take a few hours or days to think about and dig deep into yourself.”

Identifying that "why" can give you a clear focus for developing the rest of your financial plan, which Bryan-Podvin says hinges on three pillars: your daily spending (aka your budget), your mid-term spending goals (like saving up for a vacation or a living-room refresh), and your future goals (like paying down consumer debt, investing in a 401K, or getting life insurance). She notes specifically that daily spending or budgeting is just one of those pillars, and getting bogged down in it can cause more harm than good.

“I always tell my clients, here are three areas we can focus on, and whichever feels the least scary, we can start there,” says Bryan-Podvin. Similar to how forcing yourself to follow any other rigid financial rule isn't always helpful—like, say, declaring you have to save a certain amount of money by a certain age—focusing solely on a restrictive pain point isn't as likely to lead to progress as a more holistic view. So, to meaningfully improve your relationship with money (and your savings and budget), “it’s more about identifying where you stand, creating the plan from there, and working it with patience,” says Sokunbi.

That's precisely why having that strong ‘why’ behind the plan is so important. “Once you’re clear on that, it’s going to compel you, even when things get difficult, to want to make progress on your finances,” says Sokunbi. “It’s going to help you get past the emotions and the overwhelm you feel around money in the moment, and stand firm on what you want to accomplish long-term.”

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