How Financial Wellbeing Impacts Our Happiness

What Is Financial Wellbeing Really? 

Financial wellbeing as it is talked about in the workplace tends to follow a very narrow definition. If your employees have already had the debt and budgeting talk, permit me to explain why I believe financial wellbeing is a much broader topic, and how this can benefit your employees.

The Financial Wellbeing Book

Back in 2015, I had the idea to write a book about money and happiness. I have been a financial planner since 1996, and so had many stories to draw upon.

I spent many months researching and writing the book, and needed a title. My wife, who was a cancer nurse, was telling me about the impact of stress on the body, especially during chemotherapy. She also told me about the Penny Brohn UK centre, where she works (proceeds of the book go to the centre). Thinking about how having a good relationship with money can reduce stress, I invented the term ‘financial wellbeing’.

I googled the expression to make sure there wasn’t another book with this title. There were, in fact, two results from that Google search. One was a Barclay’s report which focussed on the effect of debt and poor budgeting in the workplace.

Now, the phrase financial wellbeing is everywhere. In the workplace, because of that Barclays report, it is generally used to describe debt and budgeting. In many cases it is being simply added to a marketing pitch to promote the selling of existing products and services.

So what is financial wellbeing really?

There are five parts to financial wellbeing:

1. Controlling daily finances – refers to debt and budgeting

2. The ability to cope with a financial shock

3. Having financial options and clarity 

4. Security for those that we leave behind (these are from research by the Consumer Financial          Protection Bureau).

5. Creating a clear path to identifiable objectives. We could call this financial planning.

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A line we use a lot on the Financial Wellbeing Podcast is: ‘Financial planning is really very simple. You just work out what you want from life, then spend your money on that’.

Working out what you want from life, however, is not so easy! Identifying those objectives comes in two parts.

The Universal Truths

The first is to understand the universal truths. What contributes to everyone’s wellbeing, and how does money work for – and against – this.

There is a lot of research out there, for example, that shows that a person who is materialistic, who sees money as a definition of success, will be less happy than they would otherwise have been.

Social relationships is the biggest contributor to overall wellbeing, and living a meaningful life is also high on the agenda.

In the workplace, therefore, this means helping employees understand issues such as how retail therapy is a myth, and how buying experiences is will be a far greater contributor to their wellbeing.

Unique To Me

The second part is to understand how this research applies to each of us; what will help you to live a happy life. This means helping employees understand their own purpose, as well as any blockages, such as self-limiting beliefs and poor financial behaviours.

Understanding our relationship to money, for example why we keep spending and not saving, may well mean that we don’t get into debt in the first place. Understanding a little about behavioural finance – how we are hard wired to make bad decisions about money and what to do about it – can result in better financial outcomes.


Don’t get me wrong – understanding budgeting and how to manage debt is a key part of financial wellbeing. It is, however, only a small part of a much broader and fascinating story.

So if your employees have had the debt and budgeting talk, perhaps it’s now time to help them understand how they can use money to be happier, not just wealthier.

About the author






Chris Budd is the author of The Financial Wellbeing Book and 60+ episodes of The Financial Wellbeing Podcast. He is current Chair of the Initiative for Financial Wellbeing (IFW), an institute established to help financial advisers to help their clients to be happier. Financial coaches from the IFW are available to deliver financial wellbeing workshops.






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