What is Financial Wellness?

People have different opinions on what financial wellness is, but one thing stands out:

without financial wellness, your life takes a downturn and impacts your whole state of being.

There is no single definition for financial wellness but it has been described as “an intricate balance of the mental, spiritual and physical aspects of money”, as “having an understanding of your financial situation and taking care of it in such a way that you are prepared for financial changes” or as “comfortable with where your money comes from and where it is going”.

From the viewpoint of employers, financial wellness is employees’ financial behaviour and outcomes that may have an influence on the business of the company, whereas from an employee perspective the focus is on health, rather than wealth. Why so? Financial problems are one of the main causes of stress among people, leading to ill health, leading to increased costs, leading to more financial stress…

When employees are asked what financial wellness means to them, the following keywords abound:

  • Less stress.
  • Debt-free.
  • Financial freedom.
  • Less distractions at work.

For employees it is important to be at peace regarding their finances. They want to be comfortable that they’re living within their means and meeting their goals, and that their financial future is secure.

When you want to achieve financial wellness, you should therefore:

  • Understand your spending, that is, what you are spending your money on and how much you are spending. You need to understand that you must spend less than you earn so you can save to reach your financial goals.
  • Plan for emergencies because without enough emergency savings all your best efforts to become financially independent can be quickly undone. It is recommended that you put the equivalent of three to five months’ income into a separate account specifically for financial emergencies.
  • Consult independent and trustworthy sources of information to guide you towards the right decisions regarding your money.
  • Become knowledgeable regarding any financial benefits that you may be entitled to. If your company offers shares, group insurance or any other financial benefits for employees, make sure that you know how to maximise these perks to your own advantage. Talk to the HR department, finance department or your EWP if you are uncertain.
  • Know where and how to invest your money. Do not put all your eggs in one basket, but be extremely vigilant of fly-by-night companies and scams that want to separate you from you’re your money. Once again, consult a registered financial advisor for expert advice.

 

Sources:

What is “financial wellness,” and what does a lack of it mean? Retrieved from

https://www.fool.com/investing/2017/07/24/what-is-financial-wellness-and-what-does-a-lack-of.aspx

What is financial wellness? 5 elements of financial wellbeing. Retrieved from http://hrpost.hellowallet.com/retirement/financial-wellness-5-elements-financial-wellbeing/

Dimensions of wellness: financial wellness. Retrieved from http://definitionofwellness.com/dimensions-of-wellness/financial-wellness