Money Talk

Defining financial wellbeing in 5 simple steps

Money Talk

Financial wellbeing is a phrase that’s popping up more and more these days. But what does it actually mean? We’re going to break it down into five simple steps to demystify the concept. 

Recent research by RiseUp found that 38% of us are left with less than £100 at the end of the month, and that the constant worry about running out of money is taking a huge toll on people. Over half (56%) admitted that money worries affect their mental health. 

It’s no wonder financial wellbeing has become such a hot topic. So, let’s dive in and clarify what financial wellbeing is all about.

Why wellbeing?

Before we get into the nitty-gritty, let’s talk about the word “wellbeing.” At its core, wellbeing is about feeling good and functioning well – physically, mentally and emotionally. When we add “financial” to the mix, we’re talking about having control over your day-to-day money and finances.

This isn’t just about having a bulging savings account; it’s about feeling secure and confident in your financial future. The term “wellbeing” is crucial because it involves more than just wealth – it includes the peace of mind that comes from being in control of your money.

Control over daily finances

Step one of improving the wellbeing of your finances is feeling in control of your daily money matters. This means understanding where your money goes each month and maybe also having a budget you stick to. It’s about making sure your income covers your expenses, and you’ve got some left over to save or spend as you please.

With RiseUp, you can track your spending, get insights about your cash flow and stay on top of what’s happening in your bank account. Think of it as your personal financial fitness trainer, guiding you towards financial wellness.

Capacity to absorb financial shocks

Next up is building your financial resilience. This means being prepared for those unexpected bumps in the road – surprise bills, car repairs, job loss, you name it. A key part of this is having an emergency fund if you can afford to, which acts as a safety net. Insurance also plays a big role here, protecting you against larger, unforeseen expenses. By creating a financial buffer, you can navigate life’s surprises without derailing your long-term financial plans.

Being on track to meet financial goals

Setting and working towards financial goals is another important part of financial wellness. Whether you’re saving for a home, planning for retirement, or aiming to pay off credit card debt, having clear goals gives you direction and purpose.

RiseUp can help here too – based on what you’ve spent in previous months, we’ll recommend a money goal for a spending category (shopping or eating out, for example), and help you stay on track. Regularly reviewing and adjusting your goals ensures you’re moving towards the financial future you want.

Financial freedom to make choices

Financial health and wellbeing is about thriving, not simply surviving. This means having the financial freedom to make choices that improve your quality of life, whether it’s furthering your education, travelling, or changing careers. It’s about having the resources to pursue your passions and live life on your terms. Financial freedom is about more than just money – it’s about opportunities and possibilities.

Continuous financial education

The financial world is always changing, and staying informed and educated about personal finance can be really helpful. This is where RiseUp’s app and community events come into play, offering resources to boost your financial literacy and confidence. By taking just small amounts of time to read about personal finance, you can make informed decisions and maintain your financial wellbeing over the long term.

Defining financial wellbeing might sound complex, but it boils down to these five simple steps: controlling your daily finances, building resilience, setting and achieving goals, enjoying financial freedom and continually educating yourself.

Now that you have a clear definition, why not take the first step on your journey towards achieving it? Download the RiseUp app today and join our community for additional support and resources. Let’s RiseUp together and take control of our financial futures!

Start your free trial with RiseUp today and take control of your financial future.

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