Improving your financial wellbeing
2 MIN READ
In 2014, a global survey* discovered that only 55% of Irish people were financially literate compared to 66% in Germany, 67% in the UK and 71% in Sweden.
Research** commissioned by Bank of Ireland, in 2018, and carried out by research agency Red C, supported the findings of the global survey.
It found that 43% of Irish people didn’t have any savings.
If people lost their main source of income, 1 in 4 Irish people would last less than a month without having to borrow suggested that they had no access to cash in an emergency like a rainy day fund.
And almost two thirds (63%) of Irish people were not confident in the money they had saved for their long term financial goals.
Why does this matter?
Financial literacy matters because people who are less literate are more likely to make poorer decisions about saving, borrowing and investing.
That makes them more vulnerable to getting into expensive debt and less able to plan for the future with any confidence.
And, as we all know, poor financial decisions don’t just affect our money they also affect our health and wellbeing.
(If you’re interested in finding out your credit rating and improving it, you might want to read this).
Your money and your health
Struggling to pay the bills can be stressful and lead to sleepless nights.
And because money plays such a central role in all our lives, when we have money worries they can take over.
So it’s no surprise that experts now consider that financial wellbeing is as important to our overall wellbeing as physical health, positive relationships, being engaged in the community and having meaningful work to do.
The good news is that we can all get better at managing our money and improve our financial wellbeing.
Indeed, you can read 5 tips for doing just that in this post.
But, when we talk about financial wellbeing, what do we mean?
What is financial wellbeing?
Financial wellbeing comes from understanding basic financial principles and concepts and being able to apply this knowledge to our everyday lives.
It’s about feeling that we are in control of our money rather than being controlled by it.
In practical terms, this means not getting completely blown off course by an unexpected bill, not getting into expensive debt when there are better solutions available, staying on track to meet your financial goals and being able to make choices that help you to enjoy life.
It also means being confidant enough to discuss and agree money matters with your partner or family.
Unfortunately, few of us are taught how to manage money when we are growing up and have to discover how to do it through trial and error.
We may be reluctant to start organising our money matters for a range of psychological reasons including wanting to know to find out the true state of our finances because we fear having to cut back.
Here are some of the most common psychological barriers to budgeting and how to overcome them.
How’s your financial wellbeing?
How well prepared you are to meet your financial needs today and in the future?
We’ve created a financial wellbeing centre where you can check your financial health and learn how to improve it in 2 minutes.
* Global finance literacy survey by Standard & Poor’s Ratings Services (2014)
** Red C Financial Wellbeing National Survey (2018)
All efforts were made to ensure that the information in this article was accurate at the time of original publication. The content of this article do not constitute financial advice.
Bank of Ireland is regulated by the Central Bank of Ireland.