What is financial wellness?

5 min read

What is financial wellness?

If we were to ask you what wellness is, the answer you give would probably sound like this... 

“Being in control of your mental and physical health” 

But, you may or may not be surprised to hear that there is another important form of wellness to add to the mix; financial wellness.  

Our recent research revealed that 37% of people  around the world are struggling financially, living paycheck-to-paycheck. And this anxiety is increasing - 70% of people globally feel anxious about their financial situation. At nudge, we describe financial wellness as being in control of your finances, and therefore being in control of your life. But we know what you’re probably thinking... 

“Ok, but what actually is financial wellness, and how can I get it?” 

Well, you’ve come to the right place. 

So, what’s financial wellness? 

Financial wellness is considered, by those who know about it, as the overall financial health of an individual. Researchers at Gallop state that financial wellness is effectively managing your economic life. As your financial wellness increases, so should your quality of life.  

Let’s break it down. Financial wellness will mean different things for people in different stages of their lives but - no matter what stage of life you’re in - there are things you should consider when weighing up your financial wellness: 

  • Are you prepared for an emergency? 
  • Do you have financial goals that you’re confident you can actually meet? 
  • Are you budgeting and saving efficiently? 

In a nut shell, no matter where you are in your financial journey, everyone needs to feel financially secure.  

“Even Beyonce?” 

Yes...even Beyonce.  

Why is financial wellness important? 

Financial wellness is important for everyone. In the world of work right now, there is a lot of discussion around financial wellness for employees, and organizations are searching high and low for a solution that gives them financial wellbeing tips that they can share with their workforce.  

Basically, financial wellness is important because it shields you and prepares you for unexpected costs in the future. If you’re financially well, and feeling financially resilient, you’ll probably feel a lot more connected at work, and experience less stress in your life. 

That all sounds pretty important to us... 

Tell me the benefits of offering financial wellness support to your employees? 

We would love to tell you the biggest benefits of financial wellness are that you’ll never feel stressed again and you’ll be as rich as Beyonce. Really, we’d love to.  

The real benefits of financial wellness are nearly that good. 

Once you practice financial wellness, you’re more likely to feel less stressed and more connected to your employers. 

Employees are likely to feel much more connected to their employers if they feel supported with financial education benefits. Yes, employers can’t change market conditions, but they can offer tools and technology to improve their people s financial wellness. Let’s look at the numbers:  

  • 77% of employees want to work at an organization where they feel connected to the purpose and the people 
  • 56% of people say that financial benefits would make them more committed to their employer 
  • 35%, of young high earning employees with access to financial education benefits trust their employers 

If that’s not enough, employees who receive financial wellness are much more likely to be connected and retained. In a recent project with Siemens, we found that 16% of employees are less likely to churn when a financial education program is in place. The fact of the matter is, employees trust their employers to give them financial education. What’s more, when employers have financial education benefits, businesses experience a significant improvement in employee productivity. 

It’s time to invest in your financial wellness 

We’ve already started to kick the taboo around improving our mental wellness. People are much more open to talking about our mental health now, and supporting each other to speak openly and seek help when needed. 

As for improving our physical wellness - if you’re anything like us - then you’re probably in the gym everyday...cough cough. 

If you’ve gotten this far, then it most likely means you’re taking your first steps towards improving your financial wellness. So, let’s have a think about what you’re going to do today to improve your financial wellness. 

Start somewhere 

As with anything, you’ve got to start somewhere. So, we suggest you start by making a plan. Ask yourself why you want to invest in your financial wellness, and set some financial goals. It doesn’t matter how big or small! 

Manage your debt 

Managing your debt is good way to start your financial wellness journey. Have look at your credit card and other debt (think, student loans and housing loans) and start paying them off as soon as you can. 

Set up a savings account 

Even if it’s a small amount, this is the best financial wellness tip that we can give. Putting aside a small amount every week or month, could really stand to you in an emergency. Also, you could put aside some money into your pension. Future you will thank you.

What next?

If you’re in the position to design an inclusive financial wellness program – then here’s a handy launch pad to start your planning. Or, if you simply want to learn more about financial wellness? Get in touch and we would love to help.