Many of us would have a sense of what it looks and feels like to be physically well. But do you have a similar sense of what it looks and feels like to be financially well?
Since late 2017 the Australian Government’s Financial Capability Strategy has used the following definition of financial wellbeing:
“Financial wellbeing is when a person is able to meet expenses and has some money left over, is in control of their finances and feels financially secure, now and in the future.”
Exploring wellbeing in the australian context, Muir et al (2017)
The feeling of being financially well
When people are feeling financially well, they tend to feel like they are getting ahead rather than just getting by.
Feelings of stress, struggle and overwhelm in relation to money have been replaced by feelings of ease, clarity of what to do and confidence in affording the experiences that matter most to them.
Money fit behaviours
Some of the behaviours and capabilities that lead to financial wellbeing include:
| Financially Unfit | Financially Fit |
|---|---|
| Impulsive | Methodical |
| Debt-fuelled | Debt-free |
| Pay off | Save for |
| Pay interest | Earn interest |
The journey to financial wellbeing
Since financial wellbeing is a continuum there is a journey you’ll go through to achieve wellbeing. I think of that journey as having three stages with fuzzy boundaries between the stages.
Depending on which stage you fit into most of the time, there are different actions that are best for you to focus on. Those actions become a foundation for the actions of the next stage.
Improving your financial wellbeing
As you may see from the earlier definition, the foundation of financial wellbeing is control of your money. That enables you to meet expenses with some left over (i.e. savings), and to feel financially secure because you have contingencies and are on track to your goals.
For help taking greater control of your money, building your contingencies and improving your financial wellbeing watch my free course.