Financial Well-being – A Call for Financial Education

Did you know that people with poor financial well-being are four times more likely to have additional mental health problems? It seems curious, doesn’t it?

However, every day we make various choices with and for our money. Each of these small or big decisions affects our lives as a whole. These decisions also influence what we nowadays call financial well-being.

Financial Wellbeing – A Call for Financial Education

That’s because our choices can impact how we manage spending and debt, how prepared we are for unexpected expenses, and what we can do to save and move toward longer-term goals.

When we’re not in control of our finances, it can make us feel like our money is making choices for us. Like they are an independent character, shaping the future without our active presence in the loop.

Prosperity and Wealth – best sisters

Financial well-being is different from financial wealth. While wealth is more about net worth and balances, well-being is about how your money management affects your life as a whole.

Our financial well-being can suffer, and our dreams for the future can feel unrealizable when we don’t work toward them regularly.

It’s all about being financially ready for something unexpected, being able to save for any future goals, including retirement, and having the financial freedom to make all the choices that allow you to enjoy your life – now, in the future, and adverse circumstances.

Income, opportunities, education

It’s a demonstrated fact. People exposed to the same opportunities, even with the same income, or financial education exposure and comprehension have very different levels of financial well-being.

That’s because achieving financial well-being as an adult is about more than how much money you make or whether you can pay your taxes, balance your expenses, or pay your bills. It’s about having total control over your money and making choices that allow you to enjoy life.

Because financial wellness is the ultimate measure of success for financial literacy education, a financial coach is vital to this journey.

If you’re not used to having control of your finances, it may sound quite intimidating. But it’s never too late to learn positive habits that will improve your relationship with money.

Our way of dealing with money, not the income itself, makes the difference.

It may come as a shock, but here’s the news: financial well-being isn’t always directly related to how much you get paid. A recent report even found that worldwide people earning over €100,000 a year had the same money worries as those earning under €10,000! It shows that our relationship with money, not the income itself, makes all the difference. Let’s focus on habits and not necessarily on amounts.

Why is financial well-being important?

Good money management is simply about making the most of what you have. It’s knowing how much you have to spend, making wise financial decisions, and being aware of future debts to pay.

But because financial well-being is not so present in schools, the impact of creating positive money habits is not understood by everyone. Difficult times keep coming. No wonder, financial stress keeps being a problem.

For example, many people are in debt, and a third run out of money before payday. This is worrying, especially considering that people with poor financial well-being are four times more likely to have additional mental health problems. Money does not buy happiness, while money problems can make us unhappy. Fortunately, financial well-being behaviors and habits can help.

The main habits related to financial well-being include:

  • managing daily finances and debt responsibly
  • being prepared for difficult financial times and being able to bounce back
  • managing day-to-day finances to achieve medium and long-term goals
  • spending wisely and as far as feasible
  • access to financial education and the right tools to make great financial decisions
  • have a financial plan for the future, including a budget and financial goals

Emotions, money, and well-being

Approaching emotions and financial management in harmony is the key to financial well-being. The better you manage your emotions, the better you decide things, and the more financial knowledge you have, the more confident you feel.

It helps to know that if you’re worried about money, you’re not alone. On average, people spend three hours a week dealing with financial issues. We are all stressed about money. This happens for several reasons, from the need to pay the bills or being confused about the stress that comes with the need to budget well.

Sometimes situations are beyond your control, such as job loss or financial emergencies. But regardless of the circumstances, educating yourself and learning to manage your emotional responses to money is vital. When financial difficulties arise, then you have the tools to respond with confidence. This is where money awareness comes in.

Why is money awareness good?

Money awareness helps you become more aware of how you spend, save, and invest. With increased awareness, you have more freedom to manage money masterfully, without acting on impulse or avoidance.

Emotions influence money management in several ways. For example, spending can provide a feeling of well-being, a temporary ‘high’, which explains why many of us indulge in an impulse buying pattern when we need encouragement. We can all make impulsive purchases that we don’t need, investments without previous information. On the other hand, an unexpected medical bill or unpaid taxes can cause instant anxiety or stress.

Kristi Nelson- Mindful:

We can make friends with what we’ve been ignoring, dispel the myths we’ve been holding on to, and more fully live the financial life we want.

We’ll find the right solutions against inappropriate financial impulses as well as for saving. Financial education regardless of income or age can ultimately lead to the gradual but sure acquisition of financial well-being, so desired by each of us.

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