Financial wellbeing is an often overlooked but incredibly important aspect of our lives. Most of us have heard about how difficult it can be to make ends meet, or how having a solid savings plan can give you peace of mind during tough times – but why isn’t nearly enough attention given to prioritising financial wellbeing and planning for long-term success? And why, more than ever before, should we take steps towards improving our own personal financial well-being as individuals, couples, and families?
With the overwhelming task of creating and maintaining our own financial security, it’s not always easy to take control. It can be intimidating and confusing; however, taking those first steps towards understanding your finances are the most important ones in gaining greater financial confidence and success.
In this blog post, we’ll examine all these questions and more– arming you with knowledge on effective strategies to create maximum security in your finances while still enjoying life today.
What is Financial Wellbeing?
“Financial wellbeing refers to the state of financial security and freedom that enables individuals to lead a comfortable life without worrying about money.”
Achieving financial wellbeing is not just about making more money, but rather about being in control of your finances and making informed decisions that ensure you are able to meet your current and future financial goals. It involves a combination of financial literacy, planning, and discipline, which allows you to manage your finances effectively and enjoy the fruits of your labour without the burden of debt or financial stress. While achieving financial wellbeing may seem daunting, there are many resources available to help you get started on the path to financial freedom.
What are the benefits of prioritising your Financial
Wellbeing?
Prioritising your financial wellbeing can have numerous benefits that go beyond just monetary gain.
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Reduced Stress and Anxiety:
Taking control of your finances and having a clear understanding of your financial situation can help reduce stress and anxiety. It allows you to plan for the future, feel more secure, and better handle unexpected expenses or financial emergencies. A 2019 survey by REST Industry Super revealed that 74% of Australians reported feeling stressed about their financial situation. However, actively managing finances and having clarity led to lower stress levels.
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Improved Mental Health:
Financial stress can negatively impact mental health. Prioritizing financial well-being through effective budgeting, saving, and debt management can contribute to improved mental health outcomes. The Australian Psychological Society’s 2019 survey found that financial issues were a significant stressor for 47% of Australians, surpassing other stressors like personal health or relationships.
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Increased Financial Security:
By prioritising financial well-being, individuals can build a safety net and protect themselves against unexpected financial setbacks. This includes having emergency funds, insurance coverage, and retirement savings. A 2019 report by ASIC highlighted that individuals with a financial plan were more likely to feel financially secure, with 60% feeling confident about their financial future compared to 33% without a plan.
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Better Quality of Life:
Financial well-being allows individuals to have more control over their lives and make choices that align with their goals and values. It enables them to afford experiences, invest in education, support their families, and enjoy a higher quality of life. A 2018 study based on the HILDA Survey found that individuals feeling financially secure and satisfied reported higher life satisfaction levels.
By investing in your financial future, you can experience these benefits and more, leading to overall improved mental and emotional health.
Understanding your current Financial Wellbeing
Your financial wellbeing is crucial to not only your present but also your future. It encompasses several aspects, including your income, expenses, debts, savings, and investments. Understanding your current financial situation is the first step towards achieving financial stability and security. It involves assessing your current level of income, taking stock of your expenses, and identifying any outstanding debts you may have. Once you have a clear picture of your finances, you can start to set financial goals and develop a plan to achieve them. By taking control of your finances and making informed decisions, you can pave the way for a brighter and more secure financial future.
To see what your financial well-being score is, click the link below to complete a quick questionnaire.
Financial Wellbeing Questionnaire
How to improve your Financial Wellbeing
Financial wellbeing is an essential aspect of our lives, and it’s never too late to start improving yours. The good news is, achieving financial stability is not rocket science. With a few simple changes to your habits and mindset, you can be well on your way to financial security. First and foremost, budgeting is key. Creating a budget will help you track your expenses and get a better understanding of where your money is going. Another tip is to pay off your debts as soon as possible. High-interest debt can be a major source of financial stress, so prioritise paying off those loans or credit cards. Investing your money is also a smart move, as it can provide long-term growth and stability. Finally, make sure to build up an emergency fund to cover unexpected expenses. By taking these steps, you can improve your financial wellbeing and achieve the peace of mind that comes with financial security.
Ultimately, financial wellbeing is a state of being whereby you can feel secure and in control of your finances. Generating a healthy attitude towards money and understanding where it goes will allow you to create a more prosperous and stress-free future for yourself. Financial Wellbeing involves understanding your current financial circumstances, setting goals to improve it, and creating strategies to carry them out. It’s important to shift your thinking around money from one of scarcity to one of abundance, so that you no longer view saving as oppressive or restrictive but instead empowering, liberating and enabling. Making proactive decisions about your finances helps ensure that you manage your assets responsibly and create the future you desire for yourself. Investing time into improving the quality and security of your finances is crucial for safeguarding both short-term and long-term wellbeing of yourself, your family, or anyone who’s counting on you.
Looking for a reliable financial advisor can seem overwhelming, but getting started doesn’t have to be. EPG Wealth is a self-licenced, boutique financial planning firm that is here to help. If you would like to improve your current investment strategies or are looking to start your investment journey, click here to organise a complimentary 20-minute phone call with an EPG Wealth adviser.