Investing in emotional and financial wealth: a holistic approach.
Finance and personal well-being are not often discussed within the same sentence; it is hard to see why they are not when either can impact the other so greatly. A study conducted by the American Psychological Association found that finances were the leading cause of stress in 2023, with the current economic climate, being affected by the cost of living crisis in the UK, along with record-breaking inflation rates, it is now more important than ever that financial security is achieved to achieve a high sense of well-being.
The foundations of well-being needs must be met to achieve a high sense of well-being. From ensuring financial security for yourself to ensuring loved ones are protected if anything were to happen, in this current economic climate, the majority of people will not feel confident they have this security in such a volatile market, causing copious amounts of stress on the UK population. Mental Health Foundation recognises these as the key contributors to mental health - an alarming amount 0of which are closely tied to money:
Debt
Friendship
Housing
Human rights
Loneliness
Nature
Pets
Work life balance
The link between well-being and financial health:
The relationship between financial health and mental well-being is complex and multifaceted. Financial stress is one of the most significant factors that can lead to mental health decline; financial instability and increasing debts are all known factors to heighten stress levels, especially in 2024. The state of the economy at present can always add a layer of stress to anyone’s life - the current volatility of the market is time-consuming to stay ahead of, putting people’s hard-earned savings unpredictably. Furthermore, this stress can be yet again strengthened by the lack of financial literacy the majority of people have, trusting someone who is well-versed in the economic market is essential to protect your assets in 2024.
Budgeting and financial literacy:
Budgeting and financial literacy are essential tools for achieving long-term financial stability and peace of mind, in order to acquire these skills, it is important to be able to differentiate between the two. Budgeting is the practice of creating a plan to allocate your income towards expenses, savings, and investments, ensuring that you live within your means and avoid unnecessary debt. It empowers individuals to make informed decisions about their spending, prioritise their financial goals, and prepare for unexpected costs. Financial literacy, on the other hand, encompasses the knowledge and skills needed to manage money effectively. It includes understanding financial concepts such as interest rates, investment risk, and the time value of money, as well as the ability to apply this knowledge in everyday life. Together, budgeting and financial literacy form the cornerstone of personal finance, providing a foundation for individuals to build wealth, navigate economic challenges, and secure their financial future.
Why is financial advice so important?
Informed Decision-Making: Financial advisers use their expertise to help you make educated decisions about your money, including investments and other financial actions.
Personalised Financial Plans: Advisers create tailored plans that aim to achieve your financial goals, considering savings, budget, insurance, and tax strategies.
Education on Financial Matters: Advisers also educate their clients on financial topics, helping them understand complex matters like investment, insurance, and taxes.
Adaptability: They assist in adapting your financial plan to changing life circumstances, ensuring that you stay on track to meet your goals.
Wealth Building: Advisers offer investment advice that fits your style, goals, and risk tolerance, helping you build wealth and achieve financial independence.
Risk Management: They provide strategies to manage financial risks, which is essential for long-term financial security.
Comprehensive Support: Financial advice extends beyond measurable gains, contributing to improved physical health, stronger relationships, and personal happiness by reducing financial stress.
In essence, financial advice is about more than just managing money—it’s about creating a secure and prosperous future while maintaining peace of mind. Expert advice can evaluate risk tolerance, aid with investment strategies suited to our individual needs and balance your portfolio correctly. This in turn reduces the effect of all of the aforementioned concerns, allowing you to know your money is working to the best of its ability.
