A financially healthy person is one who can weather any or all economic or political situation. Upon further analysis of this statement, you may conclude that the core of financial wellbeing is more than just debt management or retirement plans. Measuring financial wellness is based on a number of factors including your financial behavior, financial knowledge, attitudes, your status and the degree of satisfaction with your current financial situation. Read on for further insight on financial wellness.
The concept of financial wellness
While defining the term may be a challenge due to the different notions of what financial wellness is, many agree that the idea boils down to how satisfied you are with your financial status. It is not just having your debts in order or having an elaborate retirement plan. Authentic financial wellness is when you achieve a strong financial foundation, develop plans to reach your financial goals and are contempt with your position, financially.
Why is it a big deal?
Money is considered to play a major role as a stress factor in many people’s lives. We cannot say with certainty that it is the number one stressor, but the influence of money or lack of it in our daily lives is undeniable. Research suggests that stress and anxiety that arise from poor financial status may lead to the development of other health issues.
It is not unheard of that someone developed stress-related conditions, mental health issues or even poor work performance due to conversely poor finances. This would mean financial wellness at an individual level has the capacity to influence the future of the country.
Misconceptions you may have regarding financial wellness
Even though many organizations are paying attention to financial wellness and its influence of workers, there still exist some myths and misdirected notions on the concept. Take a look at some common misconceptions about financial wellness that should be addressed.
It’s just a fad
Unlike passing trendy topics and feel-good buzz words, financial wellness is not just a fad. The concept may be relatively fresh but that doesn’t mean it’s just an idea made of air. In fact, there are layers to understanding and achieving wellness that most of us are yet to reach. When you are financially well, there is a balance between your satisfaction levels and financial status. You have not only established a strong financial foundation but you also experience minimal money related stresses.
More money = financial wellness
You might be misled to think, the more money you have, the less likely you are to encounter financial stress but that would be wrong. Wellness cannot be cumulated to your income level or net worth. It is equated to your ability to utilize your current resources while creating a balance between now and the future. Every salary bracket no matter how large or small needs a spending plan, budgeting, investing and saving as a way of working towards wellness.
Financial knowledge means financial wellness
Contrary to this statement, being financially literate does not make you financially well. Literacy merely equips you with some of the tools and information necessary to establish wellness. Many financially educated individuals are yet to achieve wellness due to one reason or another. It’s good to be aware of the who’s what’s and how’s of the financial world but skill and knowledge alone do not guarantee wellness.
The link between employee performance and financial stress
There are physical and mental health issues that accompany financial stressors. When you feel that you are not financially well, these stresses and anxieties may directly or indirectly influence your work performance. Many experts believe that severing this link between financial stress and employee performance should be instrumental in improving the employee’s performance. A financially well employee should do better work and register growth as compared to a financially stressed one.
Tips for the financially stressed
Research suggests that reducing financial stress helps build behavior that will inevitably lead to financial wellness. With the idea of wellness in mind, there are several guidelines you may follow to structure your habits and drive towards financial wellness.
Saving – Good saving habits are a key cornerstone in financial wellness. You not only have to spend smart, but you must also develop and build your saving habits. Take advantage of saving plans that propel you towards your goal.
Borrowing smart -You might not be able to completely avoid borrowing, but when you do, consider how much your long term goal suffered from this borrowed amount.
Investing properly – Growing your money is also a pillar concept in financial wellness. Try and contribute as much as you can to your future.
Plan and protect – No matter how large or small your income is, planning for your expenses and protecting what you already have is a good way to start establishing wellness.
Final word
Financial wellness cannot be compounded to one agreeable definition, it is a combination of an individual’s effort and feelings to make financial choices that suit them now and will be beneficial in the future. There are some myths regarding financial wellness but once you understand the concept, you can work properly towards achieving it.