The Definition of Financial Wellbeing
Financial wellbeing is a state of being that allows a person to have freedom and security when it comes to making financial decisions. It is achieved when an individual has the tools, knowledge, and resources necessary to make informed choices about their money that are aligned with their goals.
The Components of Financial Wellbeing
Financial wellbeing involves having sufficient income to meet basic needs (rent/mortgage payments, food) as well as creating savings for life’s inevitable expenses, such as medical bills or unexpected car repairs. It also includes the ability to save for long-term goals such as retirement or college funds. Financial wellbeing takes into account financial literacy—an understanding of how money works—and resilience against economic uncertainty.