When it comes to achieving inner peace, the last thing any of us want on our minds is the cold, hard realities of cash. That could be a serious miscalculation, though. Carla Thomas learns more about how financial wellness can leave you feeling a whole lot better.
When Maggie Wu started her own fashion business in 2017, she knew it would mean making some serious changes in her life. But rather than looking at her day-to-day business operations or her bottom line, she found herself turning inwards and reflecting on her own attitude towards money. “Since my personal wellbeing is so closely tied to my business, I knew in order for my business to do well, I had to be well – and be in control of my own finances,” she explains.
Motivated by the arrival of the American tax season, Wu signed up for a workshop in financial wellness, a trend that’s catching on among young professionals who increasingly view their finances as an integral part of their wellbeing.
WHAT IS FINANCIAL WELLNESS?
Financial wellness treats your personal finances like any other area of your life that should be managed for optimal health. Just like setting aside time to meditate, read, or eat your veg, financial wellness posits that you approach your money as mindfully as everything else in your life in order to reap the positive benefits of financial security.
“I always thought financial management was this monstrous, scary task that I had no ability to tackle.”
“Just like a healthy person is positively energised, feels good daily, and isn’t concerned or worried each day about feeling sick, tired or in pain… a financially healthy person is someone who feels at peace with what they have,” says Sam Lau, the managing director of Total Loyalty Company, a human resources management firm that specialises in employee wellness programmes, and has worked with a growing number of corporates to offer financial wellness services. “Financial wellness is about one’s feeling of ‘healthiness’ when it comes to the amount of money you have, and your ability to accumulate to meet one’s needs.”
For Wu, that meant changing her mindset and learning how to reframe her attitude towards money. “I always thought financial management was this monstrous, scary task that I had no ability to tackle, hence why I had always avoided it before.”
TAKING CARE OF BUSINESS
Wu enrolled in a series of workshops with Heels & Yield, a Hong Kong-based financial education and coaching service that caters primarily to women. The company’s founder, Angelina Yao, is a former investment analyst who saw a gap in the market for professional women seeking more guidance in this area. “Society is embracing this idea of ‘holistic health’, where you want to focus on not just physical health, but your mental, your psychological, your bodily fitness, and many other areas,” says Yao. She believes the same can be applied to financial planning and management, in what she calls “holistic wealth.”
“It’s not just your money. It’s also your psychological wellbeing, your social wellbeing, your emotional wellbeing, and your spiritual wellbeing – because those things are all tied in with money.”
“When you’re stressed out about money, then the decisions that you make usually affect other areas of life.”
THE LINK BETWEEN STRESS AND MONEY
A recent survey by insurance company Cigna showed that nine out of 10 Hongkongers reported feeling stressed. The same study showed that globally and in Hong Kong, the number one cause of stress was personal finances.
“Feeling out of control of your personal finances can have many different implications on physical and mental well-being,” says Patrick Graham, CEO Asia Pacific at Cigna International Markets. “If you are worried about not being able to pay the rent, it’s going to have an impact on your ability to concentrate. Or perhaps it results in people working jobs they actively dislike but are too afraid to change.”
Seeing the connection between mental health and financial stability, more and more companies are starting to offer financial wellness programmes to their employees, with reported effects like decreased stress rates, improved productivity, reduced absenteeism and lower employee turnover.
As the leading cause of stress, money is critically linked to most people’s overall health and life satisfaction. That’s why feeling positive about your financial situation is an important part of achieving long-term health outcomes. “Especially in Asia, a lot of people think about ‘financial’ as just money and that’s it… but I think the link is important,” says Yao. “When you’re stressed out about money, then the decisions that you make usually affect other areas of life.”
MAKE MONEY MOVES
So what does financial wellness actually entail? As a first step, think about the goals you have for yourself, both short and long- term. These can be more immediate, like taking a holiday or buying a handbag, or they can involve long-term planning, like saving for a home or your retirement. Yao recommends having six months of savings to cover your core expenses, like rent and utilities, so this is another target you can slowly work towards every month.
Next, it’s important to gain clarity on what money is coming in and going out. Track your expenses, and take note of areas that you could easily cut back on. Eating out regularly can burn a lot of money, for example, so try to prepare more meals at home and bring a lunch to work.
Yao steers clear of providing financial advice to her clients, supporting them instead to understand overall strategies and tools that will allow them to save and invest their money in a low-stress, manageable environment. The overall goal is to empower women with better habits around their money, giving them both the material means as well as the tools to achieve their long-term goals and life satisfaction.
“Before the program, I always avoided talking about finances with my husband, even though we’d been married for two years,” says Wu, who says she felt “inadequate” when it came to managing their finances. “This has completely shifted. Now I’m the one initiating the conversation, and talking about what we should do in terms of our finances.”
While everyone’s financial situation is different, Yao says there are some easy first steps that anyone can take to get them started down the path of money mindfulness. Using an app to track outgoing expenses from your bank account, for example, is a free and easy trick to spot where your money is going every month. Once you’ve figured out how much disposable income you have every month, don’t just let it sit in your bank account; set up a savings account that earns you interest on what you’re putting aside. You can also consider using a robo-advisor, which uses algorithms and AI to invest your money every month. It’s simple money management steps like these that can have a knock-on effect to the rest of your life, according to Yao, as knowledge leads to empowerment.
“We focus on helping people achieve financial clarity, financial competence and financial confidence.”
SOUND AS A POUND
Tips to get you feeling financially confident
• Download a money-tracking app like Planto or Gini
• Aim to put around 6% of your salary towards retirement
• Invest a small amount, say 100USD per month, into a robo-advisor like Aqumon
• Set up an automatic transfer to regularly move money from your paycheck into your savings account
• Pay off credit cards in full every month, and ask your card provider to lower your credit limit
Check out free public resources on financial education like thechinfamily.hk/web/en/