Financial Wellness (cont’d) ing the freedom to make choices that as freedom to make choices. help you enjoy life. Benchmarks Can Raise Stress According to the CFPB report, “fi- Financial experts often use general nancial well-being describes a con- benchmarks to set standards for fitinuum — ranging from severe finan- nancial wellness. They may cite the cial stress to being highly satisfied rule of thumb that it is financially with one’s financial situation — not healthy to have enough money in strictly aligned with income level.” emergency savings to cover three to That’s because some people may feel six months of expenses, for example. that they have achieved a high level There are also formulas for calculatof financial well-being even if they ing how much is enough to save for are not affluent, while others with retirement — savings that will last higher incomes may not be satisfied a certain number of years, or retirewith their level of financial well-be- ment accounts large enough to throw off a certain level of income. ing.
has only a limited effect on our happiness. Once we have satisfied our basic needs, we are able to quickly get used to what increased wealth can do for us. Our new financial status starts to feel ordinary — or even inadequate. Building financial resilience is also helpful, Heinen says. She points out that more employers are now helping workers find ways to build their emergency savings, deal with their student debt, and find reasonable mortgages and car loans. Simply setting personal goals can help you progress toward well-being with your finances and more, according to Tal Ben-Shahar, PhD, a former lecturer at Harvard University in Cambridge, Massachusetts, and author of several books, including Being Happy.
But if you are feeling financial stress, targets like these can be more intimidating than helpful. When your goals are overly ambitious, “you begin to believe that the only way you’ll ever get where you want to be is by winning the lottery,” wrote author J.D. Roth, founder of the personal finance “Goals communicate, to ourselves Financial Well-Being as Freedom website and course Get Rich Slowly, and others, the belief that we are caIn another report, professional ser- in an article on his website. pable of overcoming obstacles,” he vices firm PwC asked 1,600 U.S. wrote. When we commit to that beadults working full-time how they Dr. Molitor agrees. “When you get lief, “we demonstrate faith in ourdefined financial well-being. For the scared, you get more anxious, and selves.” vast majority of respondents, it came that affects your physical and emodown to freedom. tional health,” she says. “You aren’t These moves won’t transform your going to do any better, and you may financial life overnight. But when According to the 2018 Employee do worse, at managing your money.” you engage with your finances and Financial Wellness Survey results, How Much Is Enough? commit to healthy changes, chances 21 percent of the employees said it One way to bring down the fear fac- are you will start feeling better before meant freedom from financial stress, tor is to remember that you don’t you know it. another 21 percent pointed to free- have to be wealthy to achieve finandom from worry about unexpected cial well-being. expenses, yet another 21 percent cited freedom from debt, and 18 per- According to previous research, becent described financial well-being yond a modest point, more money The report adds that “through learning and effort, and given reasonable opportunity and supports, it appears that people can move along the continuum to greater financial well-being.”
