Clarity Wealth Management
Financial well-being is not something we hear about in the news every day; however, its negative impact on society is becoming clearer by the day. Discussion around money is something we like to avoid as it involves a lot of emotions. Money and financial well-being are among the leading causes of conflict in relationships, so we must start to open up and talk about it. Luckily, financial planners like myself are taking far more interest in this area and sharing it with our clients to help improve financial well-being in this country.
Research highlights that we fail to plan for our futures; we struggle to concept what makes us truly happy, and we spend far too much time worrying about money. Maybe we should be focussing on the question ‘Are we using our money in a way to live our best life possible?’
A recent report by Aegon discovered some frightening statistics about financial well-being. More than 19 million people (36%) in the UK are currently struggling with their financial well-being. It found that only 8.6 million (16%) of the population are fortunate to combine healthy finances and a positive mindset around money, but 6.5 million (12%) struggle with both, which is why this topic needs to be openly discussed.
We naturally have a negative mindset when it comes to planning for the future, which is why 38% only have a vague idea of where they want to be financially in the future in 10 years time, let alone in 20 years. Less than a third of the population (29%) have a specific idea of what their future looks like, which is why we need to encourage more people to start envisaging what they want to achieve in their lives. Only 28% of people have a vague idea of what brings them joy and purpose in life, so financial well-being is a problem in this country. Worryingly, only 13% of the population have a financial plan in place to achieve their long-term goals and aspirations; this is a frightening statistic.
Other research by Neyber found that 20.3 million workers in the UK are affected by money worries which directly impacts their financial well-being. You would think that this applies to the low paid and the younger generation; however, this is not the case. Although money worries do slightly decrease with income, statistics show that 46% of employees who earn over £70,000 per year are affected by money worries.
It is not always about how much money we have that contributes to financial well-being, but it is how we use our money to live a meaningful life.
Health & Financial Well-being
There is clear evidence that when people suffer from money worries, it can, directly and indirectly, impact their health. Financial well-being has been linked to mental health conditions such as depression, stress and anxiety. When people get stressed about money, it can trigger these conditions or a combination of them, all of which can severely impact your health, your ability to work, and your overall happiness and purpose in life. Financial well-being can also affect physical health. You could also struggle to purchase enough food for yourself and your family or purchase gym memberships, which prevent you from keeping physically fit.
Research has now shown that financial well-being can also affect employee’s productivity levels at work and morale. By improving financial well-being in the workplace, they have found that productivity and morale go up, ultimately enhancing output within the business.
By improving our financial well-being, we can improve our relationship with money, improve health and improve our lives at work.
How To Improve Financial Well-being
The great news is we can improve our financial well-being; this, in turn, will give a greater purpose to your life. Aegon Identified 5 areas where we can improve our financial well-being.
Nicholas Morris Dip FA
Clarity Wealth Management