The term ‘financial wellness’ has many definitions, but the basic concept refers to the feeling of ‘getting your financial house in order.’ That is, being confident that you can meet your daily financial needs and future needs, and still have resources to spare to enjoy your life in the meantime.

But achieving financial wellness isn’t as straightforward as it may seem. It’s not as clear-cut as doubling your income or creating the perfect budget. Rather, we can look to our lifestyles to play a role in reaching financial wellness.

Our lifestyles basically set the bar of how much money we need to meet our daily and future needs. And what’s often forgotten is that we set our lifestyles.

Sure, there are some non-negotiable aspects of a budget (such as food, rent, and utilities), but often our money goes to things outside this realm.

That said, one way to improve our financial wellness is to modify our lifestyles: setting the bar lower so that it’s easier to reach given our circumstances.

Financial wellness is more complicated than reining in your lifestyle

Setting the bar lower is easier said than done. That’s because our lifestyle is defined by a multitude of factors. For now, let’s discuss how social factors may make it hard for us to control our lifestyles.

For example, social comparisons—our tendency to evaluate ourselves through comparisons with others—can drive many of our lifestyle choices.

In finance, this is commonly called ‘Keeping up with the Joneses,’ where we’re always trying to one-up our neighbours regarding our standard of living. Think, ‘The Joneses bought a new car, so I should too.’ Or, ‘The Joneses went on a fabulous vacation to Hawaii, so I have to take an equally fabulous vacation.’

In modern times, this drive to buy may not be fuelled by the literal family next door, but by the millions of social media posters we see on our phones—many of whom are making vastly different incomes than us ‘regular folk.’

The solution to reaching a higher standard of living, and thus bypassing the Joneses, may seem as simple as making more money. Unfortunately, life isn’t that simple.

That’s because even if increasing your income is within reach, lifestyle creep—the tendency to let our expenses creep up alongside our income—can continue raising that bar. This can quickly turn into a never-ending loop of comparing ourselves to one group, earning more money to keep up, slowly shifting up our lifestyle needs, comparing ourselves to a new group, and so on.

This cycle can result in money management issues regardless of income.

Our research looked at the financial wellness and financial behaviors of higher-income individuals, and it supports these ideas. Our sample had a median income of USD $141,733, and yet 27% reported feeling financially unwell. Moreover, only 41% had a fully funded emergency savings account, and 26% had no emergency savings at all.

These results suggest that money may not be the sole solution to improving financial wellness: It may also involve being thoughtful about the lifestyle we choose.

Take control of your lifestyle

To take back control of our lifestyles, we can start by reining in the social factors that can force us to keep raising that bar. Here are three tips to help you do just that.

1) Turn down social pressures.

You knew this one was coming, but the best way to fend off social pressures is to avoid them entirely. This can mean avoiding certain social groups (where feasible) in the real world, but it can also mean staying away from social media.

I know this is hard to do, so start small by limiting your time on social media apps. If you’re feeling strong, try deleting the apps that sway you the most, while keeping the ones you find more helpful or inoffensive.

For myself, I find that Instagram and Facebook prompt me to fall into negative social comparisons, so I don’t have those on my phone. I still have Pinterest available for my scrolling entertainment.

2) Check in with yourself.

What’s particularly pernicious about social factors on our lifestyles is their ability to distract us from what’s important.

As we get caught up in the loop of social comparisons and lifestyle creep, we quickly lose ourselves without even noticing. So to help prevent being swept up in the current, try checking in with yourself.

Take an afternoon to define your long-term financial goals. Go a step further and carefully consider your personal values and how your financial goals are connected to them. As you face a world full of social factors, these goals and values can serve as your North Star to help guide your financial decisions.

3) Remind yourself often.

Remember that social influences and factors are constant. Thus, we may need constant reminders to ensure our decisions reflect our goals and personal values.

When making any big financial decisions, try revisiting step 2. Starting decisions by reviewing your goals and values can help make sure the two are aligned.

Also, try completing a goals/values exercise on a yearly basis. Not only can our goals change and need updating, but an annual reminder is needed to keep them fresh in our minds.

The value of financial wellness

Achieving financial wellness is a multifaceted journey that goes beyond simply increasing income or perfecting a budget. Although objective financial factors play a role in our financial lives, they shouldn’t steal the show.

By being mindful and making informed decisions that align with our personal values and long-term goals, we can regain some control over our lifestyles and mold our financial well-being.

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More behavioural finance resources from Morningstar:

The key to being happy with your finances: New research from Morningstar’s behavioural research team looks into how to really achieve financial wellness.

A deep dive into the psychology of investing: In this episode of Investing Compass, we run through the common behavioural mistakes that will likely have an outsized impact on your portfolio, and how investors can prevent making these mistakes.

Future Focus: Dual income, no wealth, how do you build for the future?: Many dual income households are treading water. Here’s how to supercharge your financial security and wealth creation.

Does money buy happiness?: Yes - and it’s crucial to properly defining your goals.

Market returns are secondary to this return driver: Want to be a successful investor? You’re focusing on the wrong thing.

3 steps to save money when you’re tempted to spend: How to stick to your savings goals for the long term.