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Learn More About Financial Vitals

What is financial wellness?

The term financial wellness, also commonly known as financial well-being, is still in its nascent stages
of being studied and defined by academicians and scholars. Although a relatively novel concept, global
policymakers have been consistent in recognising the importance of financial wellness, and considering
it while formulating household economic policies for over a decade now. As early as 2013, the World
Bank noted how Policymakers across the world have been concerned about improving the financial
well-being of households.

Academic disciplines such as economics, financial planning and advisory, household and personal
finance, consumer decision-making, and behavioural finance have all examined financial well-being
through their own lenses. However, there is no consensus on a single definition or metric for it.

The term financial wellness, its conceptualisation, and its constituent parts remain loosely defined at
best. This urged us to dive deeper and conduct our own research to understand it from a holistic
perspective.

Financial wellness means being at peace, and in control of one’s financial journey. It is a subjective
term and entails several ways of achieving it.

A multi-dimensional concept, financial wellness describes the overall financial health of a person,
which depends on four main variables - an individual’s personal situation, their level of financial
awareness, their financial choices, and the macro-economic environment, where -

 Personal situation includes an individual’s personality, demography, family generation, and

life constraints.

 Financial awareness is the ability to understand one's own economic situation as well as
financial concepts and products.

 Financial choices cover an individual’s spending patterns, saving habits, borrowing behaviour,
and financial planning efforts.

 Macro-economic environment comprises factors such as inflation, recession, geopolitical

considerations, etc.

All of these factors, in their own measures, impact the financial well-being of an individual. Empirical
studies have shown that the personality and characteristics of an individual have a far greater impact on
their financial well-being than their ability to understand financial concepts.

How do we assess your financial wellness?

In contrast to income, net worth, and cash flow - all of which are simple metrics that can be assessed
using a mathematical formula, financial well-being is a complex concept. It encapsulates multiple
elements (such as a person’s savings habits, their understanding of financial concepts, etc.) that cannot
be statistically evaluated via a simple equation. It also takes into account the individual’s personal
situation (the current state of their finances, their demographic and other personal information, their
near-term and long-term needs and goals), their financial awareness, factors influencing their financial
choices, and the macro-economic environment impacting the individual and their household finances.

Furthermore, financial well-being is a multifaceted concept that cannot be evaluated by looking at one
aspect of it in isolation from the others. There is currently no scientifically supported data-driven model
that people can use to understand and evaluate their financial well-being. In light of this, 1 Finance has
devised a step-by-step mechanism to get to the point where we can assess your financial wellness, in a
comprehensive and meaningful manner.

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The 1 Finance ecosystem was created with the sole purpose of ensuring financial wellness for all our
members, and ultimately helping them achieve financial freedom.

After understanding yourself (with the help of MoneySign ), knowing your finances (with the help of
TM

1 View), and learning how your financial choices align with your personality (with the help of Financial
Behaviour Score), we can now prepare to dive deeper and explore your financial well-being and
establish a road map for better financial health - together encapsulated in 1 Finance’s ‘Financial
Wellness Plan’.

What is a Financial Wellness Plan?

Financial Wellness Plan is the 4th offering on 1 Finance’s advisory ecosystem - and the fourth step in
your financial well-being journey. By considering your financial, personal and behavioural information,
the Financial Wellness Plan provides a holistic assessment of your financial health along with
customised actionable insights that align with your inherent personality and behavioural traits.

Unlike any other financial plans that only touch upon certain specific aspects of a person’s finances -
whether it is an investment plan, a tax plan or a cash flow budget, the Financial Wellness Plan offered
by 1 Finance provides a complete picture of your current financial health encompassing all areas such
as investments, debt, expense management, emergency savings, insurance; your past behavioural
patterns that impact your financial decisions; and a blueprint of sound financial decisions that you can
take in the future.

The insights and recommendations provided by the Financial Wellness Plan are rooted in

a. the human expertise of our qualified and experienced financial concierge* specialists and
financial advisors, and

b. our proprietary algorithms that facilitate advanced portfolio analysis and help identify the right
financial instruments for our members

*financial concierge: 1 Finance’s team of certified, qualified, and experienced financial planners,
wealth managers and financial advisors

The end-goal of all personal finance advisory, whether related to investments, or expense management,
or even emergency planning is to ensure responsible financial decisions. In the end, it all boils down to
one simple question: What steps can I take? How can I make changes to my financial situation that will
allow me to feel content with where I am in my financial journey? By tailoring a customised approach,
the Financial Wellness Plan outlines simple and achievable steps in its action plan that one can take to
better their financial health.

A breakdown of your Financial Wellness Plan - Explore all financial vitals

The Financial Wellness Plan offers

A. COMPLETE INFORMATION

MoneySign - a complete break-down of an individual’s personality, core instincts and traits,

TM

behavioural biases that impact their finances

1 View - a comprehensive and real-time picture of all the various components that make up a
person’s finances (including but not limited to assets, liabilities, income, expenses, and insurance)

Personal Balance Sheet - a detailed snapshot of a person’s financial standing

Net Worth (current and projected) - the difference between what a person owns (assets like your
house, retirement funds, etc) and what they owe (your liabilities such as mortgage, credit card debt
and so forth)

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Financial Behaviour Score - how their money decisions fare according to key financial metrics
that evaluate one's financial health across critical dimensions - expense and liability management,
asset allocation, and emergency planning, along with

B. DETAILED ASSESSMENT

An in-depth analysis of personal and financial information - instead of having to make sense of
numbers and complicated ratios, the Financial Wellness Plan offers a meaningful and easy-to-
understand assessment of one’s financial health, coupled with

C. AN ACTION-PLAN FOR IMPROVED FINANCIAL HEALTH

The step-by-step guidance from 1 Finance allows you to thoroughly assess your financial history, take
stock of your present financial situation, and have a clear roadmap for your future.

 Key takeaways that suggest quick steps to address key areas of concern in your current financial
situation

 Actionable insights and recommendations, tailored to align with your financial journey

 Lifestyle-based planning that considers your personal journey and helps you prepare financially
for key life events that are important to you

How is your Financial Wellness Plan different from your Personal Balance Sheet?

The Financial Wellness Plan is a comprehensive approach to managing your financial health. It involves
taking a holistic view of your financial situation and identifying areas where you can improve your
financial well-being.

A personal balance sheet, on the other hand, is a snapshot of your financial situation at a specific point
in time. It lists your assets (e.g., cash, investments, gold, property, etc.) and liabilities (e.g., home loan,
auto loan, etc.) and calculates your net worth by subtracting your liabilities (what you own) from your
assets (what you owe).

The Financial Wellness Plan integrates a 360 degree approach to financial planning touching upon
aspects such as evaluating life or health cover adequacy, creating a well-guided investment strategy that
aligns with your personality, contingency planning, and personal debt management. This holistic
approach to financial planning is built on information derived from the Personal Balance Sheet, the
MoneySign Assessment that evaluates your personality and your 1 View that considers your assets,
TM

liabilities, incomes, expenses, and insurance.

While both the Financial Wellness Plan and a personal balance sheet are useful tools for managing your
financial health, they serve different purposes. The Financial Wellness Plan is a proactive approach to
improving your financial situation as it offers a route map for a sound financial journey, while a personal
balance sheet is a summary of your current financial position.

A Personal Balance Sheet serves as an important starting point for holistic financial planning. The
Financial Wellness Plan comes at a later stage in one’s financial wellness journey - as it considers your
unique financial situation and milestones. You can learn more about Financial Concierge Specialists
here.

Personal Balance Sheet Financial Wellness Plan

Snapshot of assets and liabilities at a given point The Financial Wellness Plan is a blueprint for
in time better financial health.

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Retrospective in nature Forward-looking in nature

Gives details about financial information Gives details about financial, behavioural as well
as aspirational information

Users will need to evaluate the Personal Balance Already includes specific actionable insights and
Sheet themselves to arrive at their own recommendations that members can adopt to
conclusions about their personal finances improve their financial health

How can the Financial Wellness Plan help with better financial decisions?

Before you dive deeper into understanding how to use your Financial Wellness Plan, it is important to
keep in mind that your Financial Wellness Plan is created to help you improve your overall financial
health and not just one aspect of your finances (like earning better returns on investments).

The Financial Wellness Plan paints a comprehensive picture of your overall financial well-being,
including how your past habits and decisions have shaped your current situation, and how to best
proceed in the future.

The plan serves as a strong foundation for making informed financial decisions by analysing your
financial situation in detail. The Financial Wellness Plan can help you assess each aspect of your
personal finances by giving you a detailed report of not just your holdings but also other aspects of your
finances such as debt, expense management, insurance, etc. This helps us identify areas where you may
need to make changes.

The Financial Wellness Plan captures important financial milestones in your life. For instance, buying
a new car, buying your first house, funding your child’s higher education, and building a retirement
corpus. This provides a clear direction for your financial planning and helps you make decisions that
align with your goals.

The Financial Wellness Plan offers an in-depth evaluation of your investments to ensure you’re on the
right track. The plan incorporates recommendations based on your corpus analysis, by not just
proposing diversification strategies for improved financial health but also suggesting financial decisions
that align with your personality, etc.

The plan also includes strategies for reducing debt, such as paying off high-interest credit card debt or
consolidating loans. Reducing debt can help you free up money for other financial goals and make it
easier to make informed financial decisions.

Not just that, the Financial Wellness Plan also offers insight into your insurance requirements by taking
into account your life stage, number of dependents, and financial details such as income, assets, and
liabilities.

Overall, the Financial Wellness Plan can help you walk on the path to your financial freedom by
providing a comprehensive approach to managing your financial health.

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