For many of us, money is a significant source of stress. It’s natural to assume that financial wellness comes from earning more money or knowing more about personal finance. While both can certainly help, financial wellness is also shaped by the everyday habits and decisions that influence how we use money. And though some financial challenges may be beyond our control, our habits and behavior remain areas where meaningful change is often possible. In this article, we'll explore this more closely.
First, what is financial wellness? The Consumer Financial Protection Bureau defines it 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 allows for many things to influence our state of wellness, such as financial knowledge, existing wealth, and, of course, behavior.
Creating lasting financial well-being requires gradual, sustained behavior change. Many of us might already know some of the changes we would like to make, such as spending more intentionally, saving, or learning more about how money works. But even a strong understanding of money may have limited impact without taking action. When we say “taking action,” we mean changing existing habits, creating new ones, and/or ending old ones that no longer work.
There are many factors that can affect financial wellness, and not all of them are within our control. Health challenges, job loss, family responsibilities, and limited access to resources can all create financial strain. Positive and negative emotions—such as sadness, excitement, or fear—as well as cognitive biases, can also influence financial decisions. While these challenges are real, small, consistent actions can still help strengthen financial wellness over time.
Behavioral change isn't all-or-nothing. It's a process that involves stages, and people may move back and forth between these stages over time, especially when circumstances change.
Understanding which stage you may be in can make it easier to choose an approach that fits your current situation, rather than expecting change to happen all at once. Let’s look at how we could approach them.
Not Yet Ready
At this stage, you may not think you need to make a change, or you may think you do but you're overwhelmed. For example, maybe you're avoiding looking at your accounts, bills, or other financial information, or you are giving up hope.
Question to ask yourself: What is causing my financial stress?
How to approach it: Work on awareness rather than action at this stage. Use curiosity rather than judgment; for example, look objectively at a financial issue you would like to understand better.
Thinking About Change
This is the point where you might recognize that change is needed, but you don't know how to proceed.
Question to ask yourself: What would I like to improve.
Preparing for Change
At this stage, you’re ready to explore your options, and you may already be forming a plan.
Question to ask yourself: What's one realistic step I can take?
How to approach it: Set small, realistic, measurable goals. Identify next steps as needed. Make a priority list.
Taking Action
You're trying out new behaviors. There may be some trial and error here.
Question to ask yourself: What habit(s) can I practice consistently?
How to approach it: Take advantage of systems (more on that below). Get started on at least one item on your priority list. Look for opportunities to redirect spending toward your most important goals.
Maintaining Progress
You are continuing the habits that work and refining them.
Question to ask yourself: How can I stay on track?
How to approach it: Do regular check-ins. Aim for progress rather than perfection. Adjust your goals as your circumstances change.
Behavioral change looks nice on paper, but in real life it can be messy, and progress may not be noticeable at first. Where possible, focus on small actions that you can manage. They have a way of building momentum over time. For example, regularly reviewing your accounts, setting aside a small amount toward savings, or creating a plan for one spending category may feel manageable while still moving you forward. There is no shortage of helpful ideas that may support your progress. Focus first on essential expenses and any available support resources. Small actions are often more sustainable than dramatic financial overhauls.
Building positive financial habits doesn't have to happen in a vacuum. In fact, you might already use systems and routines that make positive financial habits easier to maintain. One example is automating essential financial transactions. Many people rely on direct deposit for their paychecks, and some even split those deposits among different accounts. They might also set up alerts on their online accounts to keep track of where money is going out. Another common example is making discretionary spending harder by turning off one-click purchasing or removing your credit card information from shopping sites.
Successful financial habits are often built into daily routines. These systems can reduce the need to rely on memory, motivation, or willpower alone. That way, good decisions can happen automatically, reducing stress.
Changing behavior is hard enough, and it doesn't always proceed along a straight line. So setbacks are a normal part of the process.
Unexpected expenses arise. Incomes change. Pressures from family and work can add up. Even government policies can interfere with the functioning of your financial life.
When these things happen, there are ways to get back on track, even if progress takes longer than expected. First, doing regular check-ins can help you refocus on your goals. Second, try not to frame setbacks as failures, as doing so can reflect all-or-nothing thinking. Third, keep a long-term perspective. And remember that returning to good habits after a setback can help reinforce these habits even more.
To sum up, financial wellness is never just a matter of having enough money or knowledge. It often develops through small, consistent actions that become lasting habits over time. Progress may not always be linear, and setbacks are a normal part of the process, but meaningful change can still occur. If you want to improve your financial wellness, start with manageable steps. Such steps can build momentum, and momentum can grow toward lasting change.