The Importance Of Financial Wellbeing

Financial wellbeing is about a person having a good relationship with their money. With today’s cost of living crisis, many people will understandably be concerned about their finances and may feel that they are losing control of their money.

People with poor financial wellbeing have been shown to be over five times more likely to feel depressed and almost four times more likely to suffer from anxiety, so if anything can be done to improve your financial wellbeing it is clearly very important.

How do I improve my financial wellbeing?

At Nelsons, our specialist Investment Management team regards financial wellbeing as a major part of what they do as independent financial advisers and financial planners. It underpins all of the complex work that we do on people’s:

Research has shown that getting control of five broad areas can massively improve your feelings around your finances and reduce anxiety.

1. A clear path to identifiable objectives

If you don’t know where you are trying to get to or how to get there this is likely to create stress, worrying about whether you are doing the right things.

We work with our clients to create a comprehensive financial plan, so they have clear direction and a context to make all their financial decisions.

2. Control of daily finances

It may seem simple, but most people don’t have a good handle on what is coming in and going out, making each month stressful not knowing whether their money will last until the next payday.

Making sure you know your monthly incomings and outgoings is a great start and hopefully getting to a position where more is coming in than going out each month and you can save for the future.

3. Ability to cope with financial shocks

Before our team starts looking at pensions or investments, we want to ensure that our clients have an emergency fund in place, often three to six months’ worth of expenditure.

Having savings so you know that you can deal with unexpected bills, emergencies, redundancy, etc. can give people great peace of mind.

4. Having financial options

The next level up from an emergency fund is additional resources so you aren’t reliant on your monthly pay cheque.

Having savings in place so you can take time off, choose whether to take a job or wait for something better, and leave a stressful situation can be of great benefit to people.

5. Clarity and security for those left behind

It can be a great worry to people about what will happen when they are gone, will their loved ones be ok? Will there be a lot of hassle for them to sort things out? Getting your estate planning in place and financial situation organised early, alongside an up-to-date Will and Powers of Attorney can take away a lot of this worry.

The work our team does with clients, creating plans, sorting out their finances, and managing their investments is all designed to improve their financial wellbeing and make sure whatever happens they are going to be ok.