What is financial wellbeing?

by | Nov 13, 2020 | Wellbeing

Forget vagina candles, chia seeds and cupping, this isn’t that kind of wellbeing chat. Health and wellbeing have been commodified to such an extent that it’s sometimes impossible to tell what actually helps us to feel better, and what’s just another unnecessary expense in the pursuit of contentedness. As with most things, there’s a nuance in this conversation that’s lacking from the discourse that we see on social media; you can’t buy wellbeing, but being in control of your financial situation contributes to better mental and emotional health. In fact, I’d go so far as to say that there can be no wellbeing without financial wellbeing.

It’s not about being obsessed with amassing money or living in a state of perpetual deprivation for the sake of saving every penny, but about being able to use money as a tool to build the life you want. It’s not about avoiding credit like the plague, but about only ever using it in a mindful, controlled and beneficial way. It’s about prioritising what will really make you happy, and remembering that when you spend your money, you cast a vote for the kind of world you want to live in. It’s not about perfection, but about feeling pretty good, most of the time.

So welcome to financial wellbeing, a neat little concept that describes the feeling of having achieved a degree of separation between your net worth and your self-worth. It’s a state of relative steadiness, an equilibrium whereby you feel confident and equipped to deal with the money curveballs that life throws your way.

As with anything to do with your wellbeing, there are a number of different elements that contribute to that state of stability and control. The ones that I focus on are:

Making peace with your mistakes

Most of us have a somewhat chequered past when it comes to money, whether that has manifested as debt and financial difficulty, problems with emotional or compulsive spending, or financial anxiety and a fear of actually spending anything at all.

A critical step in regaining control of your finances and cultivating a more peaceful, positive relationship with money is letting go of any financial shame you might feel. Lay those money ghosts to rest, once and for all. There are a number of ways you can do this, from discussing with a friend or therapist to journaling it all out.

Living with a budget

Let’s get one thing straight: a budget shouldn’t be something you ‘go on’ in order to achieve a short-term goal, or to punish yourself for poor financial decisions in the past. A budget should be something that you live with – a critical part of looking after yourself, your mental health and your future. Nobody can be genuinely happy and relaxed without having a clue what’s going on in their bank account, except perhaps Jeff Bezos. All a budget really is, is knowing what’s coming in, what’s going out, balancing the timings and having a plan for how you’re going to use what’s left. That’s all.

A mistake that many, even most, people make in the beginning is being over-zealous with their budget. They trim away absolutely everything apart from the bare essentials, treating it like many people treat a crash diet – a means to an end. But if you’re going to use your budget to achieve your financial goals, whether that’s to pay off debt, save for a house, plan your retirement or just go on a great holiday, then you need to think long-term. Are you really going to go two years without a takeaway coffee or dinner out? If so, is it worth it? Can you actually stick to it? Because, as with dieting, the more deprived you feel, the less likely you are to see things through – and the more your happiness is at stake.

Curbing emotional spending

Emotional, impulse or compulsive spending are experienced by many of us. Often, we spend to fill a void elsewhere in our lives, or to fix an imaginary problem rather than looking at the root cause of how we’re feeling. Marketers know this, and they’ve developed unique and clever ways to tap into it, to skew our decision-making in their favour.

The only way to achieve financial wellbeing is to ensure that most of our purchases are made mindfully – that we’re making a conscious decision to spend, and that we’re not going to regret those purchases afterwards.

Planning for your future

If we want to feel truly financially secure, making ourselves comfortable in the present isn’t enough. We need to make sure that we’re planning for a positive financial future. This applies especially to women, who tend to be better savers but more reluctant investors. The feeling of security that comes from having a plan for growing your money and knowing that you won’t have to struggle in future is impossible to put a price on.

So, there you have it. If this sounds like something that could be helpful for you, our Financial Wellbeing Course (coming soon) will take you through it step by step. You could also join our Financial Wellbeing Group Coaching Programme (coming soon), which is a six-week guided course.

(Please, only ever buy courses that you can afford. If you feel this might help you, but you really can’t afford it, please get in touch as I have a reserve of free spaces to keep things accessible.)