Do You Have Financial Wellness Down Pat? Here's What You Need to Know This Holiday Season Financial wellness might be crucial during the holiday season. Having a sense of peace about your money might mean that you can relax about everything else and actually enjoy the...

What does financial wellness mean to you? Does it just sound like a fancier, more wholesome term than "personal finance"? Or does financial wellness mean something different to you altogether? You might view financial wellness as a holistic approach to our finances, from getting out of credit card debt to building an emergency fund to saving for retirement. The sum of all of these parts make your money work for you.

Financial wellness might be crucial during the holiday season. Having a sense of peace about your money might mean that you can relax about everything else and actually enjoy the holidays.

Let's walk through a few simple steps that can help you get on the path to financial wellness — however you choose to define it.

How Can You Become Financially Well?

Just to put a definition on financial wellness, particularly in the context of the holiday season, it's fair to assume that financial wellness means that you have enough money to pay for your immediate expenses, cover any emergencies that come up in the course of everyday life and also have enough money to have the lifestyle you want. Financial wellness also means you can meet your current and future goals.

The Consumer Financial Protection Bureau (CFPB) has a simple financial well-being scorecard worksheet that you can complete to help you determine how "well off" financially you are. It covers questions that ask you to rate the following:

• Handling a major unexpected expense: Can you cover monthly expenses without worry, even if they come in the form of unexpected expenses or unanticipated bills?
• Securing your financial future: Are you making plans to save for the long term, for retirement and other future expenses? In other words, do you have plans for the future?
• Money management: Can you cover all the necessary expenses of everyday living and still have money left over for other things you want? Can you choose where to live, drive, eat and do recreational activities because you manage your money well?

Understanding how well you perform in all of these categories can help you determine how well you're handling your money on a wider scale.

How Can Financial Wellness Fit into Your Life?

What can financial wellness look like in your life, especially during this holiday season? Let's take a look at what it could mean in practice.

Tip 1: Have steady and reliable income.

When you think of steady and reliable income, it means that you have money that you can depend on that will come in reliably every two weeks, every week, every month. The question of reliable income can also affect high earners or those who own their own businesses. If you own your own business but you suddenly realize that you aren't bringing in as much as you normally do during this season, you may want to reevaluate your business strategy.

Tip 2: Create a well-stocked emergency fund.

What would happen to you if your heater conked out in the middle of December (amid another North Dakota winter)? Or what happens if your car needs replaced? Could you pay for it? Experts recommend having an emergency fund that totals between three and six months' worth of expenses. However, you may want to save more than that.

If you make $50,000 a year, that means that you'd save a minimum of $12,500 (for three months' worth of expenses) or $25,000 (for six months' worth of expenses). Save $50,000 for a really robust emergency fund — a year's worth of salary.

Tip 3: Have a plan to eliminate debt.

You also want to consider your debt in the context of financial wellness.

Making a list of your debts and the amounts you owe gives you a good handle on how you'll pay them off. (It's easy to lose track of everything you owe as well as the interest rates on each loan.) You may want to consider putting together an actual plan to pay off debt, which might include making extra payments each month on your high-interest loans (start with credit cards first!).

Tip 4: Have retirement planning down pat.

It's no secret that in general, Americans don't save enough for retirement. In a U.S. Retirement Survey by Schroders, respondents were asked about how they felt about the retirement planning they've done so far. Just 27% of non-retired respondents said they were "fully on track." Only 18% of non-retired respondents between the ages of 60 and 67 said the same. A full 60% of respondents said they do not have enough in savings. Unfortunately, 14% did not know if they had enough savings for retirement.

Whether you choose to pad your retirement savings with an employer-sponsored 401(k) plan or put money into an IRA, you should have some form of retirement plan at the ready. Keep these figures in the back of your mind for how much you should have saved at each age:

• Age 30: Save one time your annual salary.
• Age 40: Save three times your annual salary.
• Age 50: Save six times your annual salary.
• Age 60: Save eight times your annual salary.
• Age 67: Save 10 times your annual salary.

Always remember to pay yourself first and save money in your retirement fund as soon as you get your paycheck. Also make sure you have the right asset allocation for your individual future goals and risk tolerance.

Tip 4: Monitor your credit report and know your score.

Having a good credit score (which is a three-digit number that shows how well you pay back debt) can help you do a number of things. It can help you get a nicer apartment, get approved for a mortgage or even get a higher-paying job (yes, some employers check your credit score!).

Financial wellness also involves knowing your credit score and monitoring your credit report, which you can do at annualcreditreport.com. If your score is low, you can make moves to increase it by paying your bills on time, tackling debt and making sure you use 30% or less of your available credit — also called your credit utilization ratio. You can also limit your requests for new credit, which often results in a "hard" inquiry, which can temporarily ding your credit score.

Tip 5: Consider budgeting.

Create a budget if you think it will help you during the holiday season and into the future. Figure out how much money you have coming into your household each month, then add up your fixed expenses, such as mortgage payments and utilities. Then, assign all the rest of your money a job, whether it goes toward entertainment, prescription drugs or your child's basketball shoes.

You may want to try using a budgeting app to help streamline the process. A budgeting app can help you discover where you're overspending. Budgeting can really do a lot to help you allocate how much money you'll spend on each person in your family during the holiday season.

Take Steps Toward Financial Wellness this Holiday Season

Financial wellness in the context of the holiday season: At first glance, you might not think you have enough time to whip your finances into shape by the end of the year. However, you may be surprised by how fast you can thumb through your paychecks, get a handle on your expenses and determine how much you can budget.

Give yourself a sense of peace going into the holiday season (and the new year) by making sure you're financially well. It's a great gift to give yourself.