Increasingly, people are talking about financial wellbeing. But what does it actually mean?
Financial wellbeing is about having a sense of confidence and security around money. It’s about having enough money to meet everyday needs and being in control of your finances; having the financial freedom to make choices that enable you to enjoy life.
The rise in financial wellbeing as a concept is arguably related to the increasing trend of mental health problems in the UK. A study* in 2014 reported that 1 in 6 of us experience a mental health problem in any given week. Causes vary but it’s not uncommon to find issues related to money as one of these, and it’s a misconception to think that these are just related to those at the lower end of the income ladder.
Even seemingly successful and affluent people worry about money. Our role as financial planners is to give people reassurance and confidence about their current and financial future. Helping them to live a full life, saving and spending money as part of an overall plan that is focussed on living a confident and enjoyable life.
The principles of money and happiness
The relationship between money and happiness is a very personal one, often related to our individual backgrounds. Some of us are natural savers, some are spenders.
Studies show that there is a level of wealth required to bring happiness but beyond this, the correlation between money and happiness is less clear. We know that the pursuit of material possessions is secondary to buying experiences when it comes to making us happy. But this often doesn’t stop us buying things we don’t necessarily need because they make us feel good. It’s a complex issue.
Addressing the issue
Many initiatives are being delivered, including within our profession – this year has seen the launch of The Financial Wellbeing Conference for financial advisers and planners. But probably the most significant impact is being made in the workplace.
Through workshops and training, employers are increasingly providing financial wellbeing and education to employees. They are recognising the role it can play in maintaining a happy and productive workplace and supporting the emotional wellbeing of employees. External providers are often used, although we are seeing roles dedicated to this within larger corporate business.
What does this mean for us?
Our role as advisers and planners is to provide confidence in relation to money, enabling clients to live a full and enjoyable life.
We know we play a very important part in the lives of our clients. Our role is an objective one, helping clients to see a full picture of their financial position and to understand what action to take to provide current and future financial security.
Ultimately, providing for your financial wellbeing, is part of our purpose.
* McManus S, Bebbington P, Jenkins R, Brugha T. (eds.) (2016). Mental health and wellbeing in England: Adult psychiatric morbidity survey 2014. Leeds: NHS digital.