Financial wellbeing: the link between health and wealth
It’s easy to forget one of the biggest threats to our wellbeing: worries about money.
Many studies show that financial concerns are seriously affecting our wellbeing. A recent survey on UK stress by workplace benefit platform Perkbox1, found that worries about money are the second-biggest cause of stress, after our workplaces and before our families. Money worries can even make you ill: those experiencing financial difficulties are more likely to suffer from anxiety, depression and stress2.
The Government’s Money and Pensions Service views freeing people from this worry as so important that it has launched a new strategy aimed at getting the nation financially healthier over the next ten years. It aims to get five million more people engaged with planning and saving for later life - a ‘financial wellbeing’ strategy that it says will improve outcomes for individuals and society as a whole3.
But what does it mean to be financially well? The Money & Pensions Service (MAPS) defines it as ‘the feeling of being secure and in control, being able to pay the bills today, having capacity to deal with the unexpected, and being on track for a healthy financial future’. If more individuals met this definition, MAPS believes the UK would be significantly better off, while the individuals themselves would be less stressed, happier and more resilient.
First steps to wellness
Reaching that financial nirvana needn’t be as hard as you think, and like any other journey, the financial wellness trail starts with a single step. That one step is where you make a commitment to understanding your financial starting point, and to mapping out where you want to go. You might need to get some of your paperwork together, perhaps from different pensions you’ve had over the years, as well as any investments and current accounts you have.
Then it’s time to look at your goals for later life, and perhaps talk to your family about your wishes. While it can be tricky to have financial conversations with family members, it can have a significant positive effect on your financial and mental wellbeing if you know that you have arranged your finances as you would like for the future, including making possible provision for care costs and for any dependants. It can be easier to involve a professional, in this process – a financial adviser can advise you of the best course of action and ensure that decisions are tax efficient and work in accordance with your wishes.
The power of protection
One really important part of financial wellbeing is ensuring you have adequate protection. Products such as life insurance and critical illness cover can give you peace of mind. The right policy could give you the reassurance that you could still pay the mortgage, school fees or university maintenance for a family member if you were sick or unable to work, and the knowledge that your family would be provided for if you were no longer around. Again, a financial adviser could help you to ensure that protection policies are aligned with your goals.
A positive step
At times like this, when the world is so uncertain, it can seem that there are few things you can do to increase your wellbeing. But increasing your financial strength and resilience should be seen as an important part of self-care when times are tough. So, however you feel about this most uncertain of winters, your finances should be at the top of your priority list, so that you are ready to weather any storm.