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What Is Financial Well-Being And How Does One Boost It?

Early this year, the U.S. Consumer Financial Protection Bureau conducted a study on 59 consumers as well as 30 professionals to define what financial well-being actually is. Through their in-depth interviews they found that your income does not matter; consumers can experience financial well-being or the lack of it because it is highly personal. Therefore, financial well-being is defined as having financial freedom of choice and financial security in the present and in the future.

FACTORS THAT INFLUENCE THE FINANCIAL WELL-BEING

a. Social and economic environment,

b. Personality and attitudes,

c. Decision context,

d. Knowledge and skills,

e. Available opportunities,

f. and Behavior.

Image Credits: pixabay.com (CC0 Public Domain)

FINANCIAL WELL-BEING’S FOUR ELEMENTS

1. PRESENT SECURITY

You are able to pay your bills on time and do not have to worry about having enough money. You manage your finances and not the other way around.

2. FUTURE SECURITY

You are prepared to handle any financial emergencies or shocks that when it strikes, you have sufficient insurance, savings, and support from your family and friends.

3. PRESENT FREEDOM OF CHOICE

You have control over your life because you have financial freedom. Taking holidays, going out for dinner, and being generous to your family are done as you wish.

4. FUTURE FREEDOM OF CHOICE

You have short-term and long-term financial goals and you know how to meet them.

Image Credits: pixabay.com (CC0 Public Domain)

WAYS TO BOOST YOUR FINANCIAL WELL-BEING

1. EARN IT

Many people cut expenses but only a few examine ways to increase income. In the event of job loss, it is still important to do whatever it takes to provide for yourself and your family.

2. PROTECT IT

Do research (e.g., from newspapers, Internet, and financial experts) to ensure that all your monetary efforts are not wasted.

3. MANAGE IT

After you retire, the bottom line is not how much you make but how much you keep.

4. GROW IT

With careful financial planning, money will grow even in a slower economy.

5. ENJOY IT

A comprehensive plan will allow you to go for vacations, new car, and so much more. With this, you can transfer some funds to your heirs or to charitable causes.

Take each day as an opportunity to work towards improving your financial well-being! 🙂

Newbie’s Guide To Financial Planning

Picture a curve going up. This is your lifetime money curve. Every decision you make affects the direction of your curve. For example, once you earn money from your first job then, the money curve will go up higher. But living in reality, your money curve are exposed in certain financial pressures such as taxes and bank fees, which, will push the money curve direction down. The good news is that, with a strategic plan that evaluates the potential pressures, you can survive or prevent the downward money curve. This strategic plan is called a Financial Plan.

Financial planning is an important process that draws out your monetary future. It is a process of managing your finances and knowing where you want to go. Here are 5 pointers to guide you…

1. INFORMATION GATHERING

In order to manage your finances, the first step is to gather all the important documents (e.g., bank statements, insurance policies, and investment accounts) and financial information. Organize these records by using a folders or filing accessories that will cost less than S$5 at Popular Bookstore or Daiso.

2. EVALUATING

After you gathered all the essential information, you must evaluate all the areas of your financial life including long-term savings (e.g., retirement and college fund), short-term savings (e.g., payment for bills and emergency fund), key documents (e.g., durable power of attorney and will) and insurance (e.g., life and car insurance). Calculating your net worth is also in this step.

3. SETTING GOALS

Following evaluation is goal setting. It involves two things: identifying your goals and knowing what resources you need. Identifying your financial goals both short-term (e.g., staycation in Bali) and long-term (e.g., retirement at 50s) is vital to knowing what your next plan of action will be. After plotting your goals, you must know the resources you will need to achieve them.

4. TAKING ACTION

Since your goals are set, your next plan of action is to decide whether you shall do it on your own or to hire a professional financial advisor. The personal actions you can take may include purchasing life insurance, creating a will, and setting a side money for your retirement. While, hiring a professional can help you reach your objectives in the midst of time your constraints.

5. MONITORING

The last step is monitoring. Monitoring involves tracking your progress and altering your goals based on the reevaluation of your current economic situation.

Image Credits: carlocanyougo.tumblr.com

With a systematic and a holistic Financial Plan, may your money curve take a flight…leading you to success! 🙂

Sources: Entrepreneur and MoneySense

Mr. Lee Kuan Yew’s Notable Quotations on Economy and Life in Singapore

As the nation bids its final farewell to Mr. Lee Kuan Yew, the founding father of Singapore, here is a humble homage for his wisdom on money and life matters.

1. “People want economic development first and foremost. The leaders may talk something else. You take a poll of any people. What is it they want? The right to write an editorial, as you like? They want homes, medicine, jobs, schools.”

~The Man and His Ideas, 1997

2. “If Singapore is a nanny state, then I am proud to have fostered one.”

~From Third World to First, The Singapore Story: 1965-2000

3. “Life is not just eating, drinking, television, and cinema…the human mind must be creative, must be self-generating. It cannot depend on just gadgets to amuse itself.”

~Speech at Chinese New Year and Hari Raya Haji Celebrations held at Joo Seng Community Centre, February 28, 1970

4. “But I’m not God, I can’t change you. But I can encourage you, give you extra help to make you do, say maybe, 20% better.”

~Success Stories, 2002

5. “Every Singaporean who owns a flat can double his value in today’s terms within the next 15 to 20 years. In other words, in the next 20 years, we can make everybody worth twice as much, at least.”

~National Day Rally, 1990

6. “If you can’t think because you can’t chew, try a banana.”

~Reply to a BBC reporter, 2000

7. “I am often accused of interfering in the private lives of citizens. Yes, if I did not, had I not done that, we wouldn’t be here today. And I say without the slightest remorse, that we wouldn’t be here, we would not have made economic progress, if we had not intervene on very personal matters – who your neighbor is, how you live, the noise you make, how you spit, or what language you use. We decide what is right. Never mind what people think.”

~Straits Times, April 20, 1987

Image Credits: William Cho via Flickr

To build a strong Singapore during the most difficult years and to transform it from a Third World to a First World country is truly admirable beyond words. Mr. Lee, your outstanding leadership gave us the direction and for that your legacy will on forever.

Sources: 1, 2, 3, and 4

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