Love Your Financial Security

New research: Financial security most important attribute of a positive outlook on life

women and money

This week we’ve been looking at new research from an American life insurance company that quantifies just how much of an impact our financial health has on our emotional wellbeing and happiness. Northwestern Mutual’s annual survey found that for 98% of people they interviewed, financial security was the main thing that made them feel happy and calm. Not riches, not having more than their peers, not even getting out of debt, but simple security. Having a safety net in place should things change suddenly (and expensively) in the future.

The researchers then break down these sobering findings in to even more, err, sobering factors. More than half of all respondents said they felt “anxiety” and “insecurity” about money – and half of each of those groups claim to feel that way “all the time” or “often”. Roughly the same number stated their response to their finances as simply “fear”.

It all sounds rather horrifying, doesn’t it. When quizzed further, it turns out that it’s the prospect of an unexpected health emergency or other costly break to their usual monthly outgoings that scares them the most. After taking a moment to praise our beloved NHS, we can actually relate to this. Because even though we in the UK don’t have specific medical bills to foot, we all know that having to take time out of employment due to illness or accident (or caring for someone for someone else who’s suffering) makes a bit dent in our income. And that has a knock-on effect on our financial planning.

Of course, we all wish we knew what’s waiting for us round the corner. Uncertainty is a part of life that we must try to gain the serenity to accept. But when it comes to finances, there are things we can do about that feeling of worry about. We recently talked here about different kinds of insurance, and there’s no doubt that arranging some sort of cover for unexpected loss of income could take away some of that nervousness about the future.

But for us, the main takeaway from the NorthWestern Mutual survey is simply that it reaffirms how very, totally, utterly, extremely central to our wellbeing financial planning is. So many of us still cover up our terrible money-management by burying our heads in the sand regarding the true state of our finances – taking them out only to shop for overpriced, shiny treats that make us feel lucky and rich. But that sort of behavior can dramatically impact our mental health. It can lead to a permanent state of anxiety that no shiny treats can soothe.

So, we’ve said it before and we’ll say it again: look at where you are financially and where you want to be. Then use all the help that’s out there - on the internet, in books, at your high street bank and from friends and mentors - to start planning for your financial future. So you can only save £10 a month right now? Then do it! Do something. Because if you do nothing to protect your future self from what may come, you can add “regret” to that list of sad emotions the survey spelled out for us.