What is financial wellbeing, and how to achieve it

What is financial wellbeing, and how to achieve it

You’ve probably already heard the term ‘financial wellbeing’ pop up in different places. And, earlier this year, the Money and Pensions Service (MaPS), introduced the UK Strategy for Financial Wellbeing to help improve the UK’s financial wellbeing. But the question is: what is financial wellbeing, and how do you achieve it?

We all know what these words mean in isolation, ‘financial’ is, of course, anything relating to money, and, ‘wellbeing’ can be defined as the state of being healthy, comfortable or happy. Now, let’s look a little deeper into the concept of the two combined.

What is financial wellbeing?

“Financial wellbeing is about feeling secure and in control. It is knowing that you can pay the bills today, can deal with the unexpected, and are on track for a healthy financial future. In short: confident and empowered.” MaPS

“Financial wellbeing is about a sense of security and feeling as though you have enough money to meet your needs. It’s about being in control of your day-to-day finances and having the financial freedom to make choices that allow you to enjoy life.” – CABA, the charity that supports the wellbeing of chartered accountants.

Financial wellbeing is all about control, security, freedom, confidence and empowerment.

But, this can be easier said, than done.

It’s good to talk

On a day to day basis, we are often asked: “How are you?”, but it’s seldom that we would answer anything other than “Fine, thanks”, even if the worst were happening.

Although more conversations surrounding our wellbeing, and specifically mental health, are happening, talking about money and any financial fears is not something we do freely. According to Lloyds Bank, 50% of UK adults believe that talking about personal money matters is taboo, and a bigger taboo than sex, politics or religion!

But, when 95% of those aged 35 to 54 say they worry about money, it should be something we talk about more.

Also, money worries don’t just affect those earning less, or that are in debt; a recent study by Survey Finance shows that those earning over £100,000 have the same level of concerns as those earning less than £10,000. So, it can affect us all.

Airing your concerns is the first step towards taking control. Whether that be to a family member, friend or financial planner. Remember, it’s good to talk and often the hardest conversations to have are the most important.

Our top tips to improve your financial wellbeing

Now, we all know a problem shared, is a problem halved, but just talking about your worries doesn’t solve them, unfortunately. Financial wellbeing is all about having a plan and sticking to it. It’s taking control and being confident that you have enough.

First, we recommend you start with a financial health check. This process will highlight the areas of your finances that have been neglected or need finetuning.

Next, it’s time to develop a strategy. Setting yourself short-term and long-term goals, as well as a budget is a crucial step towards your financial wellbeing getting back on track.

But it is hard to do this on your own; the emotional benefits of working with a financial adviser can be huge, and it’s not all about investment returns. Planners are there to support you through your journey, as well as providing accountability and that much-needed discipline we all tend to lack when left to our own devices.

For the greater good

According to the MaPS, in the UK, 11.5m people have less than £100 in savings, 22m people said they don’t know enough to plan for their retirement and 9m people often borrow to pay for bills or buy food. And as we found earlier, the more you get paid doesn’t necessarily mean the less you worry.

So, how can we fix this?

The UK Strategy for Financial Wellbeing has set out a ten-year framework which will help achieve the vision of everyone making the most of their money and pensions.

Also, there is an exciting new venture, the Initiative for Financial Wellbeing (IFW), where planners collaborate and share research that will improve the advice industry and help us help clients to be happier and fulfilled. Our planners, Rebecca and Tina, have joined this initiative and cannot wait to share their knowledge, ideas and research, and have a positive influence on the relationship between financial planning and financial wellbeing.

Ultimately, we are all on a journey which will at times have its highs and lows. It’s making sure you are aware of them, that you talk about them, and then take control of them; this is the secret to your financial wellbeing.

As financial planners, our goals-based holistic financial advice delves into all aspects of your financial situation, leaving no stone unturned. Your financial wellbeing is at the forefront of all that we do, and our planning provides you with the confidence to tackle whatever events lay ahead.

If you would like to discuss any aspect of this article or want to discuss your financial wellbeing, then please get in touch with us and speak to one of our financial planners.