What The Heck Is Financial Wellness
Financial wellness is more than just understanding the basics, it’s about your financial capability, and applying money knowledge to your daily life.
Written by Victoria Kent, Senior Investment Specialist
Photo by Brooke Cagle on Unsplash
This information does not take into account your personal objectives, financial situation or needs. You should consider if the relevant investment is appropriate having regard to your own objectives, financial situation and needs.
What is financial wellness?
You only have to look at the number of Instagram influencers pedalling supplements and activewear to know the 'wellness’ revolution is well and truly here.
The 'wellness' revolution has been around far longer than people have been sipping on turmeric lattes and going to yoga-lates.
Photo by Avrielle Suleiman on Unsplash
Ayurveda and traditional Chinese medicinal philosophies have been around for thousands of years. The Greeks and Romans also developed health practices focused on disease and illness prevention rather than cure.
I was amused to find even the lab coats at Pfizer have a definition for wellness:
“Wellness is the act of practicing healthy habits on a daily basis to attain better physical and mental health outcomes, so that instead of just surviving, you're thriving.”
But what about financial wellness? It's a relatively new term, but not dissimilar from the Pfizer definition. To us:
“Financial wellness means having a comfortable sense of financial security and having enough money to meet all needs and demands in your life.”
Financial wellness means practicing good daily financial habits and knowing prevention is better than a cure.
Living within your means, getting out of debt, having sufficient savings to weather life's inevitable hurdles, planning for your retirement and the next generation.
The importance of financial literacy
I'd wager that an average person's health education is stronger than their financial education. We all learn about nutrition at school; even my 4-year-old knows when you get sick you go to the doctor.
But unfortunately, the average person’s financial literacy is pretty poor. The New Work Order report by The Foundation for Young Australians (FYA) found approximately 33% of students are not financially literate.
It’s uncommon for school kids to be taught about budgeting, what interest is, what superannuation is or why we have it, despite financial literacy education being a minimum standard for school registration.
This is all very practical, useful information that would boost your financial wellness and set you up for life, but we are sadly not educated about it in school.
If you’re fortunate, you might have a parent(s) that models this for you. But like most of us, you may end up learning via the school of hard knocks.
Photo by Markus Winkler on Unsplash
Financial wellness is more than just understanding the basics, it’s about your financial capability, and applying money knowledge to your daily life.
If we are not taught this stuff, and don't work in the industry, it’s easy to see why financial stress is on the rise. 1 in 3 people feel stressed and overwhelmed by money according to MoneySmart.
Where to boost financial wellness
Australians have access to MoneySmart, a government tool created by the Australian Securities and Investments Commission (ASIC), the corporate, markets, financial services and consumer credit regulator in Australia.
It offers guidance, tools, tips and calculators to “help people of all ages, backgrounds and incomes to increase their financial wellness and build a better life.” There is even a dedicated resource for teachers.
In the US, employers are increasingly turning their focus to employee financial wellness programs to add value to their compensation packages, all part of a way of gaining a competitive advantage in attracting and retaining qualified employees.
You shouldn't have to be at death’s door before you start seeing a doctor, and likewise you shouldn't have to be on the brink of bankruptcy before you review your financial situation.
To speak with a free financial counsellor, contact the National Debt Helpline on 1800 007 007.
For more information on financial counsellors and other support services see where to find help.