Life in the past few months has been a real struggle, with the Institute of Fiscal Studies claiming that the Covid-19 pandemic will affect people’s mental health.
Struggles in the wake of lockdown and isolation is likely to have a long-term effect, which will need addressing.
One area that has hit people hard is their financial well-being, due to worries about current and future employment and any debt they have. Thousands of job losses are announced daily across many sectors. And it is likely that more will follow in the future, sadly.
While the coronavirus pandemic was unexpected, those without a financial plan will be hardest hit, no matter what sector they work in. That doesn’t just mean those with lower salaries, as even seemingly affluent people admit worrying about money – especially if they have no plan in place.
At Co-Navigate, our role is to provide clients with a realistic financial plan to help them achieve their goals. After our first meeting, we use software that includes ‘what-if’ scenarios so we can plan for the worst. As a result, if or when, the worst happens, they have peace of mind. They know there is a plan in place, even if it is plan B or plan C.
Money and happiness
Money doesn’t buy happiness, the saying goes, but a number of studies show that’s not necessarily the case. Researchers from Purdue University revealed that there is an optimal point to how much money makes us happy.
Andrew T. Jebb, the lead author and doctoral student in the Department of Psychological Sciences, says, “It’s been debated at what point does money no longer change your level of well-being. We found that the ideal income point is $95,000 (£77,000) for life evaluation and $60,000 (£47,000) to $75,000 (£60,000) for emotional well-being.”
Having a healthy income not only gives us a chance to buy the things we need, it offers a chance to enjoy luxuries, such as new cars and holidays. It also means we can save and invest to increase our wealth, which provides security.
It is in times such as those we are living in that financial security trumps our desire to buy the latest technology! A newly released smartphone can wait as our understanding of money changes during recessions and downturns.
Increase financial well-being
Last year, leaders within the finance profession launched The Financial Wellbeing Conference. Set up to help financial planners, its aim was to show that someone’s well-being is just as important as wealth. During the conference, financial well-being was broken into five elements:
- A clear path to achieve objectives
- Control of daily finances
- The ability to cope with financial shock
- Financial options in life
- Security for those we leave behind
What it means to us
The five elements mentioned are among those that form the bedrock at Co-Navigate. We love to hear about our clients’ goals, but nothing makes us happier than watching them achieve those objectives and take control of finances.
When it was discussed at the first conference 12 months ago, no-one would have guessed just how important the ability to cope with a financial shock would become.
So, how is your financial well-being? If you want to improve it and take control, then contact us today and talk to one of our team.