What impacts financial wellbeing?

If you have positive financial wellbeing, you have financial freedom to make choices that allow you to enjoy life. That’s because you are more likely to be on top of your every day expenses, prepared to bounce back from a rainy day, without needing to borrow and on track for your future goals.

But what impacts financial wellbeing? We worked with the experts at the Melbourne Institute to measure financial wellbeing, so we could work out how to take steps towards improving it.

Through our research, we found four surprising insights about what actually matters to financial wellbeing. The results suggest financial wellbeing could be more achievable than you think. 

Your financial behaviours matter

You might think that if you earned more money, you would have better financial wellbeing. But your financial behaviour – including how you spend, plan and save – matters more than you might think.

For example, our research found a larger financial health gap between people who did and didn’t save than between people who earned less than $20,000 and more than $100,000 in a year

Spreadsheets aren't always required

It may come as good news to know that you don’t need to regularly crunch numbers on a spreadsheet to have positive financial wellbeing. In fact, a mental budget can be just as good.

But however you budget, make sure you stick with it because people who follow a budget have higher financial wellbeing than those who aren’t so diligent.

You don't need to be an expert

You also don’t need to be a finance expert to have positive financial wellbeing. Having a good understanding of the basics of money management can equip you to be just as financial healthy as someone who has a very good understanding of how financial products work. 

Social connections matter

While you might know that social connections are important for our mental and physical health, you may not have known that they are important for our financial health too. Regular positive social contact can improve not only our financial wellbeing but how good we feel about our finances too.