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.
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.
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! 🙂