Money can't buy happiness… can it?
It's easy to fall into the trap of thinking that having more money will make us happier, but it's not necessarily true.
According to numerous studies, the feeling of being in control of our finances (rather than the amount of money we have) is the key to creating a sense of financial wellbeing.
The 2018 ANZ Financial Wellbeing report, prepared by researchers from RMIT University and Bristol University, found that while income is an important influence, we can have relatively high levels of financial wellbeing without necessarily having particularly high incomes.
The research used three components as measurements of financial wellbeing:
Our ability to meet financial commitments such as bills and loan payments (meeting commitments)
The extent to which we feel comfortable with our current and future financial situation and to which our finances enable us to enjoy life (feeling comfortable)
Our ability to cope with a significant unexpected expense or fall in income (resilience for the future)
What steps can you take in 2019 to boost your financial wellbeing?
Well, the report identified two important ways we can enhance our sense of financial wellness, regardless of our income:
Engaging in active saving - having at least $1,000 in savings has a big impact on how 'in control' we feel
Not borrowing for everyday expenses
Psychological factors such as your confidence in your money management skills and belief in the power to control your own life and exert some control over your financials also have an influence on financial wellbeing,
Building on your existing financial knowledge and skills, and using a saving and spending tool such as a budget can really help grow your confidence and feeling of being in control.