Financial Wellbeing, what’s the fuss?

Financial wellbeing considers how the mathematical and emotional sides of money impact our wellbeing

How does your money make you feel? It could be the boost you get from seeing your savings grow each payday or the anxiety of an unexpected expense that pops up when things are tight. Financial wellbeing considers how the mathematical and emotional sides of money impact our wellbeing. 

When we consider physical health, there metrics like body mass index, blood pressure, and heart rate. But day to day, most of us think about our health based on how we are feeling or in the context of practical situations like keeping up with the kids.  

Financial wellbeing is similar. You can measure your bank account balances, savings rate, and how much you have in your superannuation. But these metrics are just numbers that will mean different things to different people, so how money makes you feel is just as important. 

Research suggests that we think about financial wellbeing across the following themes: 

Meeting your day-to-day commitments easily 

The foundation of good financial wellbeing is having enough to cover all the essential expenses in your life and not having outstanding credit card or personal loan debt (or late buy now pay later payments) that you're paying interest on. 

You know you've got this if you're confident that you can comfortably meet your needs and there's no nervousness when approaching the checkout. 

Comfortable with financial situation and being able to enjoy life 

Are you able to afford the things that are important to you in your life? If money is something that you're constantly worrying about, this is a sign that you may be overextending yourself.  

If you're going into debt to pay for the 'wants' in your life, the stress of this typically outweighs any joy that you gained from spending. Your money should help enable the things you want out of life instead of being a source of worry. 

Being able to deal with financial setbacks (Financial resilience) 

From car breakdowns to health issues, life is unpredictable. It's important to have savings that you can access if you encounter an unexpected expense or if you can no longer work for some time.  With enough set aside for a rainy day, you'll gain the peace of mind that comes with knowing you are ready for any financial setbacks that may come your way. 

Confidence about the future 

Financial wellbeing is a continuum with no fixed endpoint: we need to think about it now and into the future. Investments in your future include superannuation, consistent savings, and investments. Consumer debt can wind up being a big issue when you start to plan for retirement, so the work you put in today to improve your financial wellbeing will have an even bigger impact over time. 

Looking to power up your financial wellbeing by working on active saving and mindful spending?  Let’s Learn to find out more.