5 Ways to Improve Your Financial Wellness

If money concerns are weighing on you, you may have heard that you need to improve your financial wellness. Though that term has become a bit of a buzzword in recent years, it does represent a meaningful concept.

After all, most people experience times of financial uncertainty. According to the 2025 Northwestern Mutual Planning & Progress Study, nearly seven in 10 Americans (69 percent) say that financial uncertainty has made them feel depressed and anxious—and 63 percent say money worries have kept them up at night.

“Financial worries can impact our day-to-day health and wellness, and it’s important for people to understand and talk about the way they are linked,” said Jeff Sippel, Northwestern Mutual’s chief strategy officer and executive vice president. “It’s much easier to have healthy relationships, sleep habits and a social life when you’re feeling confident about your money.”

The good news is there are practical steps you can take to help improve your financial wellness and achieve beneficial outcomes. Here are a few ways to get started.

1. Live within your means

Early in their careers, many graduates spend all their money or max out their credit cards to keep up with the type of lifestyle they think they should be leading. If you do this, the best case scenario is that you’ll be unable to buy something that really matters to you. The worst case is you’ll create a debt hole you’ll need to dig out of before you can make progress on other important financial goals.

Ultimately, you need to have a good grasp on how much is coming in and going out—that’s where a budget can be super helpful. A lot of people cringe at the word budget because they immediately think about restrictions. But a budget allows you to balance living your life today with mid- to long-term goals like buying a house or saving for retirement, regardless of your income level. Once you know how your dollars are being spent, you can allocate some for the fun stuff, too.

There’s no one-size-fits-all way to create a budget, but a good guideline if you’re a budget newbie is to allocate about 60 percent on essential costs (housing, food, your monthly bills), 20 percent for savings (think retirement) and 20 percent for discretionary spending (the fun stuff).

It's also a good idea to periodically audit your budget. This will help you make sure you’re still spending money on the things you care about, which is important if you want to make faster progress on a goal but feel you aren't earning enough to make that happen. Going through your expenses line by line can help you discover costs you may have forgotten about—like monthly storage unit fees or barely used subscriptions. Once you’ve diverted that money toward your goals, you’ll likely realize the trade-offs are worth it.

2. Start an emergency fund—then focus on savings

One of the best ways to feel more financially secure is to start an emergency fund. Why? Because giving yourself a cash cushion to dip into if your car breaks down or you get a surprise medical bill means you’re less likely to fall into debt to cover those costs. Like any financial goal, it can take some time to build one, and that’s OK. Typically, you’ll want to have somewhere between three and six months of expenses in your emergency fund, with the money kept in an easily accessible high-yield savings account so that you can get to the funds in a pinch.

Once you have your emergency fund in place, you’ll want to open or add to your general savings account (separate from your emergency fund) where your money is in a safe (but easily accessible) place accruing interest. Investing can also be a great way to grow your money over time but it can feel overwhelming when you’re just getting started.¹ Your financial advisor can not only explain how different types of investments work but they can also help you understand how they fit into your overall financial plan.

This can help also boost your confidence. Unlike the general population, 76 percent of Americans with a financial advisor describe their finances as strong—significantly more than the 44 percent of Americans without an advisor who shared the same sentiment.

“We’re seeing a 32-percentage point jump difference in financial confidence when people seek out professional advice from a financial advisor,” Sippel says. “There’s a special kind of poise and conviction people feel when they know they’re making good financial choices because they consulted with an expert.”

3. Have a plan to pay down debt

Achieving financial wellness doesn’t mean you have to be completely debt-free, but it does mean having a plan for paying it down—particularly for credit card debt. That type of “bad” debt tends to carry high interest rates and isn’t doing anything for you (like putting a roof over your head or helping you get an education).

Depending on your situation, you should try to pay off your credit card debt in about two years, because you don’t want it to become a hindrance that keeps you from other goals. Keep in mind that if you’re planning to start investing in the markets to grow your wealth, you will likely receive a much lower percentage return in an investing account over a year than the rate you’re likely paying in interest on your credit card debt. While it’s important to balance paying debt with other financial goals, focusing on getting rid of any credit card debt first can help you build financial security before moving on to things like investing.

And don’t let your debt stress you out. You may want to throw a lot of money at your student loans immediately to get rid of them faster—but overpaying your student loans could put stress on your budget. Start off by making the required payments every month and then make extra payments when you can. Focusing on the steady progress you’re making can boost your confidence and reduce your stress levels.

4. Protect yourself—and your loved ones—with insurance

When it comes to reducing financial uncertainty, life insurance is an asset that you can count on to provide stability, which can provide peace of mind for you and your loved ones.

If you’re wondering how much coverage you should have, it’s worth comparing term and whole life insurance to see how one or both types of policies would work for you. While a whole life insurance policy has a higher cost, it can supplement a term policy and will accumulate cash value as you pay premiums. You can use the cash value for whatever you want or need.²

As your life changes, you may experience key events that will prompt you to want to revisit your life insurance needs, such as getting married, buying a home or starting a family.

Disability insurance can also help protect your income. If an income earner in your family gets sick or hurt and can’t work—or if they pass away prematurely—your financial situation could change overnight. So it’s a good idea to have a plan in place in case the unexpected happens.

5. Make plans for the future

Even if retirement feels far away or you think you aren’t making enough to put anything in a 401(k) or IRA, it’s important to get started. Even an amount you’re not likely to miss, like $50 a month or 1 percent of your paycheck, is better than not contributing at all. The sooner you can start, the better—compound growth means that putting a small amount away early is likely to make a big difference when you’re finally ready to leave the workforce. If you have a 401(k) match through your employer, all the better. It’s beneficial to contribute enough to at least meet the match because those are free dollars your company is putting toward your financial future.

And if you and your partner haven’t already discussed money, it’s time to have those conversations. From planning to get engaged to dreaming about your retirement—and everything in between—getting on the same page financially can bring you and your partner closer.

Building good financial habits takes time, and there will be moments when you slip up. The good news is that if you have a financial plan in place, you’re already working on your financial wellness. Just remember that financial wellness is a journey, not a one-time event, so give yourself time—and a little grace.