Before talking about financial wellbeing it is important I know what it is. This article from UnitedHealthcare provides good insight into the topic.
Understanding financial well-being
Stress about money and finances may have a significant impact on Americans’ lives. Nearly 72% of adults report feeling stressed about money at least some of the time and nearly 25% say they experience extreme stress about money.
The American Psychological Association (APA) recognizes financial stress as the leading cause of unhealthy behaviors like smoking, weight gain, and alcohol and drug abuse. Other behaviors linked to financial stress are gambling and overextending credit balances. Each time an individual turns to these temporary stress relievers, the APA concludes that the stress returns and often at even greater intensity.
Financial well-being defined
There are many definitions for financial well-being, but the definition that seems to capture it best might be this:
Financial well-being is a state of being wherein a person can fully meet current and ongoing financial obligations, can feel secure in their financial future and is able to make choices that allow them to enjoy life.
Other definitions may include feeling in control financially, the capacity to absorb a financial set-back, being on track to meet financial goals, or having the flexibility to make choices with your money.Financial distress
Let’s take a look at what financial distress may look like. Here are some questions to ask yourself that may indicate warning signs of financial distress.
Are you withdrawing loans against your retirement savings?
Are you having preventable medical issues that could have been avoided, but you didn’t go to the doctor because of cost?
Are you asking for payday advances?
Are you missing work with unexpected absences?
Are you spending time dealing with personal finances while at work?
The 5 fundamentals of financial well-being
Here are 5 actions you can take to help take care of your financial well-being.
1. Budget your money
2. Save for emergencies
3. Seek guidance
4. Plan for retirement
5. Watch your credit score
[Financial Well-Being]
For my capstone project, having a good definition of “financial well-being” is important before going too far in depth to this topic. In this article, United Health Care outlines what I think is a well-sated definition of “financial well-being” as well as an understanding of what financial distress looks like. When looking at the definition laid out above not only is there a monetary need that needs to be met but also a feeling of security in that monetary value. Which of these factors can be controlled and which ones are harder to control depending on an individuals circumstances? When looking at the key characteristics of financial well-being, what design principles can be applied to a project that will help nurture the feeling of financial well-being? The article lays out 5 fundamentals of financial well-being, so what are the things that may be preventing a person from having one if not all of these fundamentals?
“Financial Well-Being.” Financial Well-Being | UnitedHealthcare, UnitedHealthcare, www.uhc.com/health-and-wellness/health-topics/financial-well-being. Accessed 9 Sept. 2024.
