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Mental Health Stigma in the Workplace
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Financial wellbeing is when a person is able to meet expenses and has some money left over, is in control of their finances and feels financially secure, now and in the future. It has three interrelated dimensions:
Source: Muir, K., Hamilton, M., Noone, J.H., Marjolin, A, Salignac, F., & Saunders, P. (2017).
There is no doubt that the last two years have wreaked havoc on the financial wellbeing of Australians. Whether you’ve lost your job, had your hours reduced, are experiencing a significant increase in your weekly expenditure, been subject to interest rate or energy rate hikes, or something else that has impacted your finances, know that you are not alone. Now is the time to make positive changes in your lives and put greater focus on your financial wellbeing.
The spillover from the global pandemic, the war in Ukraine, major disruption to the supply chain and inflation are all contributing to surging costs of products and services across the board, significantly impacting the cost of living. Unfortunately many of these factors will not be short lived. We need to evolve with the changing times, we need to find new ways to make ends meet and we need to strive towards greater financial stability for our future.
According to the CBA-MI, the Commonwealth Bank of Australia and Melbourne Institute Financial Wellbeing Scales Technical Report 2020, 9% of customers were ‘having trouble’ (scores of 22.5 or below, which implied that they experienced the worst possible outcome for one or more reported financial wellbeing conditions), 31% were ‘just coping’ (scores of 25-47.5, which implied they experienced a negative outcome for one or more reported conditions), 48% were ‘getting by’ (scores of 50-75, which implied the averages of their reported outcomes were in neutral or second-highest categories), and 12% were ‘doing great’ (scores of 77.5 or higher, which implied they experienced the best possible outcome for one or more reported conditions).
25% of people surveyed do not enjoy life because of the way they are managing their money, and say they are struggling with money management (23%) and their lives are often or always controlled by their finances (29%). About 33% of respondents have low financial resilience, with 37% stating that they couldn’t handle a major unexpected expense and 31% observed with the worst savings balance outcomes. In addition,33% say they are not on track to secure their financial future or provide for future needs.
Despite these figures being somewhat alarming, the findings indicate that good financial outcomes are possible for all Australians, irrespective of income or resources. Financial behaviours, capabilities and attitudes all contribute to a strong financial wellbeing and this can be influenced by the individual.
CBA-MI developed a model to assess characteristics which can be used to help identify factors which contribute to people’s financial wellbeing. The focus was on:
The study found that there were a number of characteristics that were more strongly associated with high levels or low levels of financial wellbeing. Knowing of the associations between financial wellbeing and financial behaviour, capabilities and attitudes implies that with the right support levels, people can be empowered to change their own financial wellbeing.
Overall, the report found that the general state of financial wellbeing among Australians is mostly positive, yet financial wellbeing impacts the happiness of one in four Australians and many Australians face financial uncertainty now and will into the future. You can view the full report here.
Given our economic environment; inflation, interest rate hikes and the increasing cost of living, now is the time to prepare for what is yet to come and try to achieve a more sustainable financial position. Given the indicative association between financial wellbeing and financial behaviour, here are a few suggestions to improve your financial wellbeing:
It can be quite overwhelming and unsustainable to take on too much too quickly. Try to take on one step at a time and slowly progress towards your financial goals and subsequently - financial freedom!