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Financial wellbeing research employees should know

Financial wellbeing research stands as a beacon in today’s personal finance landscape. Research offers insights into the personal experiences of individuals and their interactions with money. The field of study doesn’t merely quantify wealth; it dives into how people perceive their financial security, how they manage their resources, and, most importantly, the emotional implications of their financial decisions. 

At Your Money Line, we believe financial stability is a cornerstone for individual and collective well-being. We believe in financial stability to such a degree that we host three monthly webinars focused exclusively on improving your financial stability. Our mission is to create financial stability and confidence for all. Often, there is a disparity between our mission and public awareness of the importance of financial wellbeing. While more often discussed, the fields of financial counseling and its adjacent fields, like financial therapy, are far newer and less researched than some of their more established personal finance counterparts (see: “financial planning). 

What is financial stability, and why do we strongly believe in it? Financial well-being research has delved into this definition and subsequent questions, shedding light on what it means to be financially stable, why it is important, and the stages one progresses through to attain it. First, we must understand what it truly means to be financially well. 

Financial well-being alludes to a state where individuals can confidently meet their current and ongoing financial obligations, secure in their financial futures, and make choices that enhance their quality of life (CFPB, 2015). This realm of financial well-being research extends beyond the mere accumulation of assets, touching upon emotional satisfaction and freedom from financial stress. As with many other new concepts, leaning into examples to help understand the space can be the easiest. While each of these situations is different, they each, at their core, are an example of financial stability. 

Financial wellbeing examples 

  • A young professional balances spending on experiences, saving adequately for their future needs, and maintaining short-term savings. 
  • A retired couple living within their means, not lavishly, but comfortably, and without the constant fear of outliving their savings. 
  • A middle-aged person who, while not affluent, has sufficient insurance coverage, ensuring that health crises won’t plunge them into debt. 

Improving one's financial stability begins with awareness of a personal finance problem or potential threat to financial health. 

The path to financial wellbeing 

The path to financial wellness 

1. Awareness 

We cannot make change if we are not privy to problems or potential threats to our financial well-being. 

2. Preparation 

You might not be ready to make a plan, but you’re aware of the threat to your financial well being. Here we expect you to downplay the problem, express general ambivalence, or to try and ignore the problem all together. 

3. Skill development

A cornerstone of financial wellness is access to trustworth financial education resources. Here you can begin to put financial tools in your toolbelt to help you craft a plan. 

4. Plan development 

With the attitude necessary to make change coupled with the education necessary to make the best decisions, you begin to make a plan. At this stage, gathering your personal finance board of directors is essential. You might need to seek the guidance of a financial counselor, financial planner, accountant, or more. The help of industry experts will help ensure you craft a financial plan that works best for you. 

5. Action 

The fun part. Implementing the plan. You can begin to see what areas might need adjustment. At this stage you might find you need to head back to the drawing board. Changes in life circumstances can also bring us back to the previous step. 

6. Maintenance 

New financial behavior is fully integrated here. Congratulations! 

Financial wellbeing statistics 

At Your Money Line, we work with many organization decision-makers and often begin with awareness regarding statistics in the personal finance world. To emphasize the need for enhancing financial well-being, consider the following:

  • As per the OECD's 2020 report on financial literacy, nearly 60% of adults in selected countries lack a clear understanding of basic financial concepts, making them vulnerable to financial pitfalls.
  • A U.S. Federal Reserve study in 2019 indicated that almost 40% of American adults wouldn't be able to cover a $400 emergency with cash, savings, or a credit-card charge they could quickly pay off.
  • A survey by PwC (2019) showed that 58% of employees said financial worries were a source of stress, causing distraction at work.

These statistics, although concerning, spotlight the importance of financial well-being and the urgency of promoting it through educational initiatives and supportive policies.

Consumer Financial Protection Bureau (CFPB). (2015). Financial well-being: The goal of financial education.

OECD. (2020). OECD/INFE 2020 International Survey of Adult Financial Literacy.

Board of Governors of the Federal Reserve System. (2019). Report on the Economic Well-Being of U.S. Households.

PwC. (2019). Employee Financial Wellness Survey.