The Currency of Well-Being: Navigating Your Financial Resources

Part 1 of a 3-part Series, How Your Money, Mind, and Moves Shape Your Financial Well-Being.

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Financial well-being is a sense of comfort with how your finances are now and how you think they’ll be in the future.

Financial well-being matters because it’s an essential part of total well-being. A lack of financial wellness can compromise physical, emotional, social, and other important dimensions of life.

Picture your financial well-being as a complex machine, with three components connected like gears in motion. The parts these gears represent are material (your resources such as your house or investments), psychosocial (your feelings about a financial situation), and behavioral (the actions you take to meet your financial obligations).

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Just as gears mesh and turn to power a machine, your financial resources, emotions, and habits synchronize to drive your total financial well-being.

We explore all these domains in our 3-part series. But this post focuses on the first domain—material (your financial resources). Here, we’ll zoom in on the importance of your resources to your well-being.

So what does it mean to have adequate financial resources? Consider these signposts:

  • Having enough income to make ends meet
  • Taking care of your financial obligations without undue hardship
  • Being free of excessive financial deprivation
  • Having a stable, predictable income

If you currently can’t check all these boxes, you’re not alone. Many folks–no matter their age or income bracket–are actively working to expand their resources for greater well-being. In the next sections, we’ll delve deeper into:

  1. How your resources impact your overall well-being
  2. Financial challenges and opportunities
  3. Real life examples of using financial resources to promote well-being

Let’s get started!

1. How Your Resources Impact Your Overall Well-Being

Think again about your financial resources as a gear in the engine of your well-being. When the resources gear is well-maintained, aligned, and operating at peak performance, it works to propel you towards more security and fulfillment in your life as a whole.

The true power of financial resources is found in their interconnectedness with other aspects of your life and in their uplifting influence–allowing you to become the best version of yourself.

Through Their Interconnectedness

Material well-being is essential for overall well-being. Because all parts of you are interdependent and inseparable, you need a strong financial foundation to flourish as a whole person.

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Imagine your well-being as a delicate ecosystem. Material well-being (your financial resources) plays a vital role. For instance, when financial stress creeps in, it affects more than just your bank account. This stress ripples into your mood, the quality of your sleep, the health of your relationships, and your job performance, among other parts of your life. So, when you tend to your finances, you’re also looking after your needs as a whole person.

Through Their Uplifting Influence

Everyone’s needs and goals are different, but becoming your best self and fulfilling your purpose can take substantial financial resources. These resources provide a foundation for further growth.

The importance of a financial foundation is implicit in Maslow’s Hierarchy of Needs.

Psychologist Abraham Maslow shared a theory that has resonated through the decades: Individuals focus on fulfilling their lower-level needs before progressing to meet their higher-level needs. Although Maslow is associated with this familiar pyramid, he never presented his ideas in this format. Typical diagrams don’t specifically mention money, but students of Maslow’s theory believe that “financial need related to immediate consumption can be considered a lower-level need.”

If you’re focused on raising money for your next month’s rent or mortgage payment, you’re concentrating on survival rather than higher-order needs like learning, connecting, giving, creating, or seeking higher meaning in life.

When you tend to your material well-being, it’s like tuning an instrument. After the tuning, your financial resources are resonating with the other areas of your life and together, they’re humming in harmony.

In this sense, being mindful of your financial resources is about much more than money. True material well-being can be seen as a way of caring for yourself and others.

2. Financial Challenges and Opportunities

We’ve seen how resources impact well-being. Now let’s explore the challenges many face with their financial resources and uncover how to transform these hurdles into opportunities for financial growth and empowerment.

Imagine encountering obstacles in the form of misaligned gears within your financial machinery. Irregular income, debt burdens, and insufficient savings can disrupt the smooth operation of your financial system, causing friction and inefficiency. Like gears that grind and jam when not properly synchronized, these challenges in the material domain can hinder your progress towards financial well-being.

Yet each obstacle brings with it solutions and opportunities to learn and grow. Here are some common challenges and suggestions for using them as opportunities to reimagine your finances. These examples offer insight into common challenges with personal financial resources, but they’re not an exhaustive list. Many other hurdles may arise in managing finances, each unique to individual circumstances and experiences.

Irregular Income

Maybe, like millions of folks, you’re freelancing, gigging, or working seasonally. Or you could be an entrepreneur with an erratic pattern of sales. Your income has more ups and downs than an amusement park ride.  But if this describes your finances, you don’t have to be a passive passenger.

If you’re dealing with a volatile income, try creating a financial plan based on your average monthly income. Think of it as your financial GPS—it keeps you on track even when the ride gets wild. When you’re making a good income, save the excess for the lean months, and don’t forget about building your emergency fund too.

Other approaches include creating a financial buffer (lowering your monthly expenses) and diversifying income streams (for instance, if your finances permit, investing in a rental property with more stable income). In some cases, it may help to gain new skills to qualify for a job with more predictable income.  

Reducing income volatility creates a more secure and predictable financial environment. This stability correlates with better financial management, lower stress levels, and improved cardiovascular and other health outcomes, all contributing to overall well-being

Debt Burden

Having debt is another common obstacle to building up financial resources. In moderation, not all debt is bad. For example, borrowed money can allow you to buy a home or pay for higher education, things that can strengthen your finances over time. But having too much debt can impact your well-being. It limits your ability to save and invest, restricts your life choices, and increases stress and anxiety. 

Debt can feel like a heavy backpack on a long hike. Whether it’s credit cards, student loans, car payments, medical bills, mortgages, or all of the above, debt weighs you down. But if this sounds like you, you’ve got options.

Consider prioritizing debt repayment. Tackle those high-interest loans first. Explore whether debt consolidation is a good choice for you—it’s like merging lanes to make your journey smoother. And think about meeting with a financial counselor if you could use an experienced trail guide.

Lack of Savings

We’ve all been there—tempted by that shiny new gadget, a spontaneous weekend getaway, or whatever triggers your desire to spend. But saving is like planting seeds for your future garden. If you don’t start working on it now, you can’t expect to harvest anything in the future. 

Set specific savings goals—whether it’s for a dream vacation, a down payment on a new home, early retirement, or an emergency fund. Automating contributions makes the process easy.

It also helps to keep in mind that cutting unnecessary expenses isn’t about deprivation; it’s about redirecting funds toward what really matters to you. Aligning your spending with your values is a cornerstone of financial well-being.

Saving not only helps you achieve your financial goals but also has multiple benefits for your well-being: It enhances peace of mind, feelings of security, and happiness. It’s also associated with a greater sense of control, contributing to improved resilience and ability to cope during financial challenges.

3. Real-world Examples: Using Financial Resources to Support Well-Being

Now that we’ve explored some challenges and opportunities surrounding personal financial resources, let’s delve into examples of folks who’ve successfully navigated these complexities to support their overall well-being.

Stable Income

Meet Mark. He’s got a secure job and a regular paycheck. With his earnings, he covers essential expenses consistently—groceries, rent, and even a little treat now and then. He also contributes part of every paycheck to savings. 

For Mark, having a stable income isn’t just about numbers; it’s about feeling grounded and knowing he can handle life’s twists and turns. This positive understanding of his resources contributes to Mark’s overall well-being.  The steady nature of his work also makes it easy for him to nurture healthy daily habits, thus improving his mental and physical health.

Not everyone prefers the kind of lifestyle required to hold a steady job. And, sadly, not everyone who does want a steady job can find one. But there are real benefits for well-being in having a stable income.

Savings and Emergency Fund

Now meet Kalista, who diligently sets aside a portion of her income each month in her emergency fund. It’s like a financial safety net, ready to catch her if unexpected expenses—like car repairs or medical bills—come her way. Having part of her savings set aside specifically for urgent situations provides Kalista with peace of mind, and during those emergency moments, her fund is like a comforting voice that says, “You’ve got this.”

Because life is unpredictable and financial emergencies affect nearly everyone, Kalista thinks it’s important to be prepared.  By having an emergency fund, her financial resources will be protected; she won’t have to resort to using high-interest loans or credit cards. As well, her physical and mental well-being will be undisrupted by the harmful effects of financial stress.

What’s Next?

As we come to the end of Part 1 of our series, let’s preview the upcoming posts:

In Part 2, The Psychosocial Dimension, we’ll delve into the beliefs and emotions that shape our financial decisions.

In Part 3, The Behavioral Dimension, we’ll look at financial habits and routines.

Get ready for some soulful exploration.

Resources

If you’re looking to improve your financial well-being through effective financial management, here are some valuable resources:

National Endowment for Financial Education (NEFE): NEFE is a nonprofit organization dedicated to promoting financial literacy and education. Their website (nefe.org) offers resources on various financial topics, including budgeting, saving, investing, and retirement planning. NEFE provides educational materials for individuals, educators, and financial professionals to improve financial literacy nationwide.

MyMoney.gov: This website, managed by the U.S. government, offers a comprehensive range of financial literacy resources. It covers topics such as budgeting, saving, investing, retirement planning, and avoiding financial fraud. MyMoney.gov provides tools, calculators, and educational materials to help individuals improve their financial well-being.

National Foundation for Credit Counseling (NFCC): NFCC is a nonprofit organization that provides free or low-cost financial education and counseling services. They offer resources on budgeting, credit management, debt repayment strategies, homeownership, and more. Visit their website (nfcc.org) to access educational materials and find a certified credit counselor.

Financial Industry Regulatory Authority (FINRA): FINRA’s website (finra.org) features resources on investing and securities regulation. While primarily focused on investor protection, they also provide valuable information on financial planning, budgeting, and managing financial risks. Visitors can access investor alerts, educational videos, and tools for assessing investment products.

Start or Join a Conversation

Thanks so much for your dedication to learning more about financial well-being.

Many different perspectives are possible about this material side of financial well-being. Your thoughts are key to this community. Please share them here. If you don’t already have an opinion at the top of your mind, consider sharing your views on one of these points:

  • How have you personally experienced the impact of financial resources on your overall well-being?
  • In your opinion, what are some additional challenges individuals face in managing their financial resources, beyond those discussed in the post? How can these challenges be addressed?
  • Which of the real-life examples resonated with you the most, and why? Have you encountered similar situations in your own life, and if so, how did you handle them?

Do you have a question that wasn’t addressed in this post? Comment below, and I’ll give you my best answer.

And don’t forget to subscribe to our free newsletter for more conversations and updates about whole person finance.

Notice

This post is for educational purposes only and is not legal nor any other type of professional advice. You should consult your own attorney, financial advisor, health provider, or mental health professional concerning any issues in these areas of expertise. Please understand facts and views change over time. Posts reflect the author’s understanding at the time of writing, as well as the perspectives of external sources for this post. While maintained for your information, archived posts may not reflect current conditions.

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