A state of financial stability and well-being has more to do with having a sense of control and flexibility around your money, rather than how much you make each month. Individuals with a higher-than-average income may still experience financial insecurity if their salary can’t quite cover their monthly expenses. Likewise, someone with a more modest income can easily cultivate financial wellness if they commit to living within their means.
It can be seductive to think of financial security as necessitating a hefty paycheck, plenty of stock, flush savings accounts, and sizable properties in one’s portfolio. And to be sure, all of these are factors which can help to foster monetary wellness, but they are not the only means through which financial security can be achieved.
Broadly, the state of financial stability and wellness may be defined as this: the ability to live comfortably within one’s means, with flexibility to both address the costs of day-to-day living and meet unexpected expenses as they arise.
The practical features of “financial security” may look different to different individuals. Usually however this looks like a monthly income which adequately covers one’s basic necessities of living, as well as enough savings to allow one to live comfortably for a period of time if that income is for whatever reason interrupted.
For many, the definition of financial security ends here. For others, it expands to include the means to grow one’s assets through investments and savings, to fund or save for voluntary expenses like travel or other fun things, and to build a nest-egg for post-retirement years.
For individuals and their families, building financial stability is critical to allow for life to happen without the unexpected threatening their health and general stability. This also gives you the flexibility and freedom to build the life you want, both for yourself as well as those you support.
We all face unanticipated and emergency expenditures throughout our lives. Hopefully, if we are financially secure, we will be able to meet these expenses without going into debt, sacrificing our retirement accounts, or losing assets in the effort to address them.
Here are two different takes on what financial security can look like.
While financial security may mean different things to different people depending on your life goals, income, and other factors, there are some consistent moves you can make that will help you to build it for yourself.
9 out of 10 Americans have experienced financial stress, especially in the wake of the COVID-19 pandemic. Uncertain financial futures – and daily sources of income, for many – make money problems one of the primary causes of emotional pressure and tension today.
One study found that nearly half of people with current debt have also been diagnosed with mental health problems, and 86% of individuals with previously known issues related to emotional wellbeing say their debt and other financial concerns make it worse.
Another nearly-half of interviewees confessed worrying about money on sometimes an hourly basis throughout the day. But if we define financial security as a sense of comfort and flexibility regarding one’s personal finances, building it up will mitigate this worry and can alleviate other more impactful mental health concerns like financially-induced depression and anxiety.
Organizations are in a unique position to help a number of their employees build better financial futures for themselves and their families. And the business case for doing so is palpable: financially-stressed workers take more sick time, exhibit worse performance, and leave their jobs more often than workers who are comfortable with their finances.
Beyond offering a thriving wage and supportive, holistic benefits to your employees, your organization might consider implementing a financial wellness solution to give your workforce a better, more empowered handle on their finances.
A big paycheck means little if you don’t know how to manage your finances. A program like Origin can help you figure it out. A comprehensive combination of tools, educational content, and access to professional financial counselors puts the reins in the hands of your employees, serving to cultivate better financial literacy as well as improved financial well-being.