What is True Financial Well-Being?
The Consumer Financial Protection Bureau (CFPB) studied financial well-being, in-depth. The CFPB defined financial well-being.
“… as a state of being wherein a person can fully meet current and ongoing financial obligations, can feel secure in their financial future, and is able to make choices that allow enjoyment of life.”
The CFPB claimed that financial measures are not enough to determine the level of financial well-being. They focused on two more areas, behavior and knowledge.
Financial Behavior: Creating good financial habits and incorporating them into your financial behavior should increase your financial well-being. Here are four areas of your financial behavior that the CFPB mentioned:
- Managing your everyday finance, including keeping and maintaining a budget, and watching your saving habits.
- Making a financial decision based on research.
- Making plans and setting goals.
- Acting in a way that helps you achieve your goals.