Positive impact of financial well-being

This is where the concept of financial fitness comes in. Like physical fitness, financial fitness is not a destination but a journey, a continuous process that requires discipline, knowledge, and an understanding of your financial goals.

Profound impact on our mental and emotional state
Getting your finances in shape could be a crucial stepping-stone toward better overall well-being. Financial health can have a profound impact on our mental and emotional state.

Given the established correlation between finances and well-being, enhancing your financial well-being could potentially improve your overall life satisfaction and happiness[1]. Receiving professional financial advice can assist in various aspects of your financial life, but four elements mainly define personal financial well-being:

Taking control
The initial step towards financial well-being is gaining control over your finances. This involves understanding your income and expenses, and solid budgeting and savings plans. A financial adviser can help you scrutinise your bank statements, enabling you to comprehend your monthly expenditure better and identify potential areas for cutting costs and increasing savings. They can also provide advice on managing any existing debts. Gaining control of your daily finances can enhance your overall financial security.

Preparing for financial emergencies
The second component of financial well-being relates to future financial security. Regular savings are essential, but are you prepared for a financial emergency? If you still need to set up an emergency fund, now is the time to do so. Having approximately six months’ worth of necessary expenses in an easily accessible savings account can cover unforeseen home repairs or a period of unemployment.

There are other financial emergencies that savings alone may not cover. Severe illness or death can significantly impact your household finances and jeopardise your family’s future plans. Protection products such as life insurance, critical illness, and income protection can provide crucial financial support for your loved ones in case of unfortunate events. Given the vast differences in protection products, seeking professional financial advice tailored to your needs is essential.

Meeting your financial goals
A high sense of financial well-being is often associated with being on track to achieve your goals. Whether saving for your children’s education, a comfortable retirement, or leaving a legacy for future generations, receiving professional financial advice can help assess if you’re on the right track and suggest ways to bridge any gaps. Advice can also guide you to save and invest tax-efficiently, for instance, through Individual Savings Accounts (ISAs) and pensions, ensuring more of your money contributes towards your future.