April 4, 2019

Ways to Improve Financial Well-Being

Show Notes

On this episode, Chuck Gaidica is joined by Matt Wozny, a virtual well-being coordinator for Blue Cross Blue Shield of Michigan. Together, they discuss financial well-being and the importance of money management.

“You technically don’t need to have millions of dollars to be happy, to be productive, to be creative, to do the things that you want to do… Studies are even showing that once we have enough money to meet our basic needs, our food, shelter, and health care, more money will not significantly increase your well-being. It can have a negative effect on us.” – Matt Wozny

In this episode of A Healthier Michigan Podcast, we explore:

  •  What is financial well-being?
  • The basics of financial planning.
  • Establishing a need versus a want.
  • The cause and effect of financial stress.
  • How to build an emergency savings account.
  • The benefits of donating to charity.

Visit www.bluecrossvirtualwellbeing.com for more well-being tips with Matt Wozny.

Transcript

Chuck: This is A Healthier Michigan Podcast, Episode 25. Coming up, we discuss ways to improve our financial well-being.

Chuck: Welcome to A Healthier Michigan Podcast, the podcast dedicated to navigating how we can all improve our health and well-being through small healthy habits we can start right now. I’m your host, Chuck Gaidica. Every other week, we get together, we sit down with a certified health expert from Blue Cross Blue Shield of Michigan, and we dive into issues and topics like nutrition and fitness and a whole lot more.

Chuck: On this episode, we’re going to be talking about financial well-being. You don’t always hear those words put together, but they are today, and we’ve got an expert, Matt Wozny, who’s here. He’s a virtual well-being coordinator for Blue Cross Blue Shield of Michigan. He’s got 10 years’ experience working in the health and wellness industry, and earlier in his career, you can track it, he was involved in wellness and well-being, and helping corporations and organizations concentrate on those things. Now his charge is to help us all put the pieces together with one of the, it’s got to be one of the top things we worry about, money and financial issues. Matt, good to see you.

Matt: Thank you for having me. I appreciate it.

Chuck: Oh my gosh, it’s good to have you here. What is virtual well-being, financial well-being?

Matt: Blue Cross Virtual Well-Being is actually a live webinar program that’s aired on Tuesdays and Thursdays, both focusing on employers and members and how to really improve their well-being. For employers, it’s really focusing on how they can build a culture of well-being within their working environment, and then for members, it’s just how can you enhance your personal well-being journey, whether it’s in financial, community, social, physical, mental. All of those categories is what we like to cover and kind of help improve your overall well-being and not just really focus on one of those pillars such as wellness and physical.

Chuck: Yeah.

Matt: It’s giving that holistic approach and kind of getting that full circle effect in with, I guess, our program and the research and the advice that we provide for everyone.

Chuck: I think this is so cool because we were talking before we started, and I think for a lot of people, you hear financial, which is a highfalutin word for money, and then you hear planning, and you think you’ve got to have a guy, right? You got to have somebody at a firm, and maybe you don’t have enough money, so that’s stress by itself. Where do I go? Is it a robo-advisor? But when you hear financial plan, you tend to think it’s something else. It’s something you do, saving at work or an IRA. Combining financial well-being to me is so critical because how much of our life is controlled by where we live, what kind of car we drive, and if we’re having kids, this idea that we can be stressed out, good or bad, by money issues.

Matt: Absolutely. So I would definitely think that’s why financial well-being or financial is one of the five pillars that we tend to focus on because it affects our nutrition, it affects our physical health. It affects everything that we do on a daily basis, and it’s just trying to gain control of that so that way we can better handle the stresses that come at us. Let’s just say if an emergency situation does happen … For example, with me, I had an appendectomy, appendicitis burst, out of nowhere, it came out of nowhere. Obviously, I was not prepared for that, but I had an emergency fund to take care of emergency situations like that, even though I still had health care to cover that, but there were still certain expenses that I had to cover. Because I had that emergency fund, I was able to therefore take of those unwanted expenses and kind of surprise expenses that were affiliated with that particular procedure.

Matt: So that’s kind of why it’s important where you never know where life is going to really turn, where it’s going to take you, especially … Everything is run by money. Let’s just say you’ve got to have money to have a house, got to have money to get the food, got to have money to take the kids out to eat, those type of things, so that’s why I think financial well-being is really critical to getting a grasp of it, understanding it. It’s really not the amount of money that you make. It’s really about how you manage your money and how you can, I guess, get a grasp of it so when certain things do happen, you have control of it and you don’t let those situations control you.

Chuck: So if you’re trying to become comfortable, not just in your own skin, but in your own planning situation for your family, you know this, you’ve met people who are reactive and those that are proactive. By you saying you had an emergency fund, you’re thinking ahead. It’s like saving for college for your kids-

Matt: Absolutely.

Chuck: Or an IRA, right? But there are so many people that are right on that line. I mean, literally they’re one paycheck away and they haven’t been proactive. At best, they’re going to be reactive, so what kind of advice can you give all of us? Is it to plan? Is it trying to ahead of this by saving in advance?

Matt: Yeah, there’s a lot of tips that we can start off with, especially if you’re on that borderline. I think first and foremost, the number one thing that I think a lot of people tend to forget to do is just simply track where your money is going. Revise and revisit all of your bank statements, all of your credit cards. Where is your money going? A lot of the times, you can find even $20 here or $30 here or $50 here, $100, where it’s money that should not be spent. If you revise and check out where your money is actually going, it’s kind of like in a sense because I’m a nutrition guy, strength conditioning guy, it’s just like a nutrition plan. If we all want to lose weight, cut calories, where are those calories coming from? We need to track it, and we first need to find that baseline of where everything is at, so that way we can then create a plan and then implement that plan based on where we’ve figured out where that money is actually going.

Chuck: So, you know, back in the old days when I used to walk to school with no shoes on, uphill, you know, because I’m so old-

Matt: Of course.

Chuck: We didn’t pay for TV. We didn’t pay for a cell phone, right? It sounds preposterous in today’s world, and to be fair, there’s my cell phone right there. I’ve got cable, right, and I’ve got Netflix and I’ve got Prime. We’re paying for things we didn’t always pay for. How do we come into a mindset of setting priorities in our family’s life because, you know, you want a new cell phone? It’s 40 bucks a month and that’s without leasing the phone. I mean, what do we do? Where do we look?

Matt: And I think that’s kind of another thing that I was going to bring up is a lot of the times we’re always focused on the celebrities, getting everything that they have or we’ve got to get the top brands, but again, that’s just kind of refocusing our mind. Then that’s where I would like to have people or would recommend people start at their baseline to see okay, where’s your money going, and then what are your needs and what are your true needs that you need to, let’s just say survive on a daily basis or so you can survive on a two week basis where you’re not living paycheck to paycheck. Then based on that, that’s where you can really start to make cuts and ties, and say okay, I really don’t need that brand new iPhone, X10, G30, whatever that just came out that’s $2,500 now, and now you’ve got to lease it out. I really don’t need that. The standard phone that I do have is doing the job I need it to do.

Matt: So that’s where I think it’s just kind of … it’s a behavior that’s going to take time. It’s not something that’s going to be a snap of a finger, but kind of recentering, refocusing the mind where this is where we can make, I guess, a jump in the right direction of saving money and not being financially stressed. I just think that’s a huge, huge point of finding out where the money’s going and where it can lead to, and not getting involved in the whole social, kind of this celebrity mindset of, oh, we’ve got to have-

Chuck: Well, or keeping up with the Joneses. First of all-

Matt: There we go. That’s what it is, yeah.

Chuck: Who are the Joneses anyway?

Matt: No one knows. No one knows.

Chuck: So I’ll give you a good example, I go to the store, phone store, I won’t name the brand. I go in and it’s the team I’ve been with for a while. I’m going to upgrade. What’s the difference between the iPhone 7 and the 10, and the guy looks at me, he kind of looks over his shoulder, it’s not a big secret. He said, “Listen, just get the 7 because there’s not much difference unless you need that better camera or whatever,” and he said you can save a ton of money. Boom. I love that.

Matt: There you go.

Chuck: So I’m not paying the big bucks, but what you’re saying is something that I’m not quite sure everybody assigns value to, and this is eye opening for me too. Financial stressors equal sign health care issues and costs, right?

Matt: Absolutely.

Chuck: Explain that a minute, because you wouldn’t think that you’re going to have a problem because you overspent on your cell phone.

Matt: Let’s just say you overspent on your cell phone and then now you don’t have enough funds to pay your utility bill, so what does that do to your health? So you’re probably, more than likely your adrenaline is going to spike up, your cortisol levels are going to go up, and when you have those type of, I guess, issues happen and that effects happen to your body, that puts you at higher risk of let’s just say a heart attack or blood pressure increasing and the higher chances of having a stroke, something of that nature could potentially happen. That’s kind of like the effects of what financial stress does. It can affect us internally, our endocrine system, all those hormones and chemicals going around in our body.Bbecause we’re being so stressed about just the financial situations, a lot of us tend to forget that this is the cause of being financially stressed and what it does to our body.

Matt: Even with being socially active, where let’s just say you don’t have enough money to go hang out with friends or to go do something, and now you’re socially isolating yourself. I know that there’s the top three risks that we just came across in studies where loneliness is starting to become more and more common among let’s just say our population, and one of those factors could be because of the financial situations that they’re in because they’re unable to actually do the things that they want to do, communicate with people socially, go to events and kind of enjoy life and have a purpose to everything that they do. That’s what kind of interesting on how looking at it from the health care side of things from what finances does. Everyone thinks it’s two different categories, but now we’re starting to mesh those together and understand that the financial well-being is beyond just numbers and checks and balances. It’s what has to do with our health and our wellness and our overall well-being.

Chuck: Well, and you know this too, because if you check out your own social media, you’ll see, if you’re somebody making 15 bucks an hour and you look at social media and you’ve got somebody making a six-figure salary, and you see that they’re in the Bahamas with their family-

Matt: Of course.

Chuck: And then they’re in Italy and look at the perfect life I have, which tends to be what’s happening on Facebook, we only want to show the good stuff, that isolation can come from the fact that you just don’t feel like you can keep up with those Joneses, right?

Matt: Exactly, exactly.

Chuck: Yeah.

Matt: And I think that’s what like … I think technology is great, but I think that’s also … There’s a lot of negatives with technology too and what that can do to us financially and just over our health and well-being as well where we can kind of get trapped in that, “Oh, everything’s positive,” but the reality is, in my opinion, is we need to, I guess, always have a balance between those type of things where yes, that can potentially be where we could end up, but there’s always going to be some, I guess, negatives or repercussions that we should always focus on too just in case certain situations do happen, especially with financial situations.

Chuck: So let’s talk about if you and I got in the car right now, we hit the expressway, and we were going to lunch, we’d see, I don’t know, minimally two, three billboards that are telling us we need to buy the big lottery ticket, the Powerball thing, and obviously people are driven to do that because to them, to anybody, let’s be fair, 23 million, 200 million, it’s going to change life.

Matt: Absolutely. I’m one of those guys, you know. I’ll be honest. I just had my birthday not too long ago, and I told my wife, I was like, “Hey, let’s go get a Mega Millions ticket. I’m feeling lucky.”

Chuck: And?

Matt: Obviously I didn’t win, but I think a lot of people get in that category where this large amount of money is going to make me happier, but again, financial well-being in my opinion is how do you manage your money. You technically don’t need to have millions of dollars to be happy, to be productive, to be creative, to do the things that you want to do. Just grasping what you have and managing that correctly, because studies are even showing that once we have enough money to meet our basic needs, our food, shelter, and health care, more money will not significantly increase your well-being. It can have a negative effect on us. I actually came across a study that per capita income in the U.S. rose 150% in 1946 to 1990, but the percentage of people who considered themselves happy fell and depression rates in the U.S. rose ten times during that time.

Chuck: There’s something going on, yeah.

Matt: So that’s what’s kind of interesting. You can get all this money. You can think, “Oh, I’m going to do all these great things,” but the reality is, I mean, with studies out there and research out there, that’s not the case. That can actually lead to certain mental health issues with anxiety and depression, so those are kind of some of the things where everyone always wants more money, more money, more money, but what comes with more money comes more responsibility. Let’s just say if I won the Mega Millions, oh, I’m going to buy a house in the Bahamas, I’m going to buy a house in California, and then I’m going to buy this Ferrari or this Viper, but then again, you have to manage all of that as well too. If you have to manage it, more responsibility on yourself, more stress that you’re going to induce on yourself as well, so how are you going to handle that? Those type of things, I think a lot of people tend to forget.

Chuck: And if you win next time, don’t forget your Uncle Chuck.

Matt: Of course. No, of course.

Chuck: You know, I think we’re related somehow in a distant way. I mean, if you win only 20 million, I won’t call you.

Matt: No, I always tell that too. That’s funny you bring that up. Every time I get my ticket, I’m always like, “Hey, if I’m a winner and I bought it at your store, we’re all taken care of. Put the store up for sale.”

Chuck: Yeah, that’s great. That’s great. But you know, you do read these articles many times, and studies that show winning large sums of money, or somehow I would expect this also means you’ve inherited, because that’s probably more likely, right?

Matt: Right.

Chuck: And you read these studies and articles that say within a year, people have either done dumb things, they’ve gone out and they’ve blown it, I’m going to get the boat, the house in the Bahamas, or they wake up and it’s all gone, and now you have no cash to perpetuate your lifestyle. You see it with celebs all the time.

Matt: All the time, and even with not even celebs, athletes all the time.

Chuck: Yeah.

Matt: You know, it’s unfortunate. It really is unfortunate with these large amounts of money that people have earned, and let’s just say they got lucky enough to win, you’ve got to have that financial, I guess, security or financial, I guess, mindset to how you’re going to better manage that just so that issue doesn’t happen where you’re filing bankruptcy even though you just won 500 million dollars or you got that contract of three years, 330, or what’s that new contract Bryce Harper, 13 years, 300-

Chuck: Yeah, 330 million bucks, so yeah.

Matt: So it’s like you would think he’d be totally fine, but you just never know obviously with the mindset that some of these celebrities have, and us, I guess, as a general population, it’s we want to live that lifestyle, but we don’t have that 330 million dollars. We have let’s just say $35,000, but you’re still trying to buy that Ferrari, get that Lamborghini.

Chuck: Sure, sure.

Matt: It’s kind of putting life in a perspective on how you should manage that and just kind of what to do.

Chuck: But if we double back to what you were talking about, preparing, even an emergency fund, right? You’re saving for certain things. You’re doing it first. You’re gifting money, you’re saving money, I think that that’s some of the best advice ever because it sets you up to not have these issues when the emergencies arise and you’re not going to have the surprise that knock the legs right out of you and you fall to your knees. There’s an old quote, let me make sure I get it right, something like money is not the end of all things, but it’s like oxygen. It sure does help.

Matt: Absolutely.

Chuck: But you can do that within your own context. I mean, if saving 10 grand is what makes your life easy to go to bed at night and think, “I’m covered. I’m covered for kids’ emergencies and if the roof starts to leak,” or whatever, whatever the number is in your context, if you save it, it would seem to me like that’s just … I’ve kind of achieved something big.

Matt: 100%, and I think even just with an emergency fund, it doesn’t even have to be that big of a number of $10,000.

Chuck: Yeah.

Matt: Some people hear $10,000 and they’re like, “Oh my god. I only make $25,000. That’s half of my income that I make.” I think just setting aside, and one of the best ways you can build an emergency fund can be simply as say you get paid every two weeks, you put 10% of your check into a separate savings account so that way you can start building that emergency fund, and you never see it. You only see it in your bank statement. So let’s just say after six months, seven months, you can see oh my god, wow, I have, let’s just say $800 in there, $1,000 in there, and then all of a sudden, let’s just say come winter, my windshield cracked. I’ve got to get a new windshield. I don’t have that covered in my auto insurance. I have to pay my $500 deductible. Boom, you have that money in your savings account to now take care of those, I guess, surprises that happen in life.

Matt: Like I said, a great example is when I had my shocking, appendix decided to want to burst on me, and luckily we had an emergency fund to handle those situations and I wasn’t stressed, my wife and I weren’t stressed. It was the same time … actually, a funny thing. It was right around our wedding, so I’m assuming everyone-

Chuck: Oh, man.

Matt: Knows how expensive weddings are. We had roughly 300 people attend our wedding, so it was a fairly big wedding, and then the bills were definitely coming up there, but it’s just kind of that surprise stress that happened and how do you handle that. That’s just one of the easiest ways you can do it and I highly recommend if you can set up a separate account, I would say, recommend anywhere from 5% to 10%, have that automatically go in that savings account so that way, again, you never see it, you never physically have to click a button and transfer it yourself, because studies are out there. When we see the money, when we get paid, what do we want to do? We want to spend it right away.

Chuck: Sure.

Matt: We want to enjoy life. We want to go have a great time, and I’m all for that. I mean, life’s too short-

Chuck: That’s part of well-being is having fun, right?

Matt: Yeah, absolutely, happiness.

Chuck: Sure.

Matt: You want to bring happiness to you, but it’s kind of again, changing those priorities, like okay, this is what’s going to make me happy. Instead of, let’s just say, going out and spending $500 that night, how about we just go do something fun and only spend a fraction of that, $50. We go get a movie and, I don’t know, we just hang out with the kids and make our own forts and stuff with the kids if we have a family. Those type of things can go a long way.

Chuck: So I’m seeing another trend, because I am a baby boomer, so I live in this world, buying and having experiences versus stuff. Now that I’ve got grandkids, I would much rather have them … Here’s a good example. I’d much rather spend money on them being with me on a vacation, helping them get to be with me so I can see them, then why would I wait my whole life and then leave the money and hope that they’re well when I can have fun and a connection with them while I’m here?

Matt: Yeah, I think that’s a great tip. When you spend it on experiences like with family, with loved ones-

Chuck: Sure.

Matt: You’re building memories, and to be honest, me personally, it’s like I get that intrinsic reward. It sounds like you get that intrinsic reward too. That happiness comes up, and I’m sure when you’re happier, you’re not stressed out about anything.

Chuck: Right.

Matt: You’re not worried about anything. You’re mentally strong. You’re socially strong. You’re probably communicating with people as if you got, let’s just say a new pair of shoes, who are you communicating with? “Oh, everyone, check out my shoes.” It’s not going to be anything like that, and there’s actually been experiments that show when people spend bonus money on themselves, it doesn’t boost their happiness, but when they spend it on someone else or donate it to a charity or the experience, an increase in their sense of well-being increases.

Chuck: It’s counterintuitive for a lot of people to think giving away my money makes me happy, and actually for me, it does.

Matt: Absolutely.

Chuck: I enjoy it.

Matt: Yeah, and the funny thing, Dave Ramsey, a huge financial guy right now, and I know he has … There’s a million different financial people you can reference on how to get yourself let’s just say out of a financial hole, but he believes … I think it was I think a third of your money or a quarter of your money eventually should go to some sort of charity or to donation, and because, again, it’s that intrinsic reward. A great example could be, let’s just say if you go to church and you donate just a dollar to any type of charity, or even around Christmas season or the holidays, donating that money, at least when I do it and I’m guessing when you do it as well, you get that sense of, “Well, I feel good about myself.”

Chuck: Sure, sure.

Matt: I’m happy that I’m doing this because I know I’m going to help somebody else, I guess, let’s say live a better quality of life or that’s going to help them this much more than if they didn’t have that.

Chuck: So as we wrap things up, give us a few last tips here on how we can, you know, maybe a checklist, maybe it’s a few hacks. How are we looking to enhance our financial well-being?

Matt: So I think again, first and foremost we want to revise where we currently are at. We want to build that baseline. Journal everything that you are doing in regards to your finances. It’s kind of the nutrition outlook on things. We always want to figure out where everything’s going, so what’s getting spent, where, and why is it getting spent there. I think that’s first and foremost the most important thing.

Matt: Then from there, it’s really creating goals, adjusting, it’s where you want to go with this money, what you’re trying to do with it, and then that’s where you can say, “Okay, I need to build an emergency fund as well.” So with that emergency fund, again, we want to try to automatically deposit some percentage of our check or a percentage of our check to go to a separate account, and I would highly recommend not physically doing it yourself. Having it automatically done will make the process 10 times easier, I can guarantee that. And then it’s just again, if you do have extra funding and you do have some money, and you want to enjoy life and be happier and live life to the fullest, buy experiences versus like that tangible shirt or that tangible cool hat that you saw Jay-Z wear.

Chuck: You can’t take it with you.

Matt: Yeah.

Chuck: You really can’t.

Matt: No, no.

Chuck: It’s just stuff.

Matt: And to be honest, you know, on a personal note, I have a family, and my mom passed away about a year ago-

Chuck: Oh, I’m sorry.

Matt: She had Alzheimer’s and stuff, so it’s at least from my point of view, it’s memories go a lot further than let’s just say that new car that you got or that new shirt that you got. So it’s like from my perspective, from someone like in our family, the difficult times that we’ve had, all we have is memories now because she’s gone, but we’re always looking at the memories when we went to Disney, when we swam with the dolphins, when we were at the beach, we were at Marco Island, those type of things. Yeah, it cost money when we did those things, but it’s memories that we have and we cherish, and it brings happiness and joy to us, to our family every single time that we do think about those times, so I think that’s one of at least my heart-to-heart with everyone out there of what you can do and the importance of buying experiences versus the tangible stuff.

Chuck: Good stuff, and if you’re looking for more information, you can go to a website, and we’ll have this in the show notes for you, bluecrossvirtualwellbeing.com, and that’s where you can see this virtual well-being website and get more on Matt Wozny. Good to see you, Matt, thanks.

Matt: Yeah. Thank you so much for having me. I appreciate it.

Chuck: Oh, no problem. Thanks for dropping by, and you are listening by the way to A Healthier Michigan Podcast. It’s brought to you by Blue Cross Blue Shield of Michigan. If you want more on the show, you want to pass on some links, this episode, previous episodes, go to ahealthiermichigan.org/podcast. You can leave a review for us on iTunes or Stitcher, and you can get all new episodes on your smartphone or tablet. Don’t forget, you can have a used one too, you know, just so you’re feeling well about how you’re spending your money. Be sure to subscribe to us on Apple Podcasts, Spotify or your favorite podcast app. I’m Chuck Gaidica. Take good care.