Non-Traditional Metrics of Financial Well-Being: A Holistic Approach to Financial Health

The financial field is usually associated with a strict well-calculated approach, where a person responsible for managing financial matters for themselves or for their employer is supposed to exercise traditional quantitative and qualitative analysis, measurement, monitoring, and control.

However, there is more to it, it’s good to utilize a range of non-traditional metrics of financial well-being. Alongside the traditional financial tools, they result in a holistic approach to personal financial health.

We suggest looking into some of the non-traditional financial parameters, keeping in mind that there are more, and one should select the tools that work for her for an effective tailored financial plan.

Quality of Life Indicators

Money is good, but the joy of life is way too important. Sorry for this invitation, but try to recall your worst days when you still needed to do your duty. Continue office work with tears in your eyes, meet people, talk, be upright and sound okay while your heart is broken or something else tragic has happened. You may remember how you could barely perform then, so that’s a great illustration of how we cannot make money when we are unhappy.

Now, allocate time to sit down with pen and paper, and check your overall quality of life. Factors such as work-life balance, level of daily stress, satisfaction with your work or business routines, and the amount of quality time you are able to spend with your loved ones, all directly reflect on your level of vitality, your satisfaction with life and, hence, your performance.

Another angle to this matter is to revise your current feelings about your financial situation. Do you feel secure enough? Do you have personal stabilization funds that support you if anything happens? Or it's the opposite, everything is vague about your money, and your financial stress or financial mess is too significant?

Emotional Well-Being and Financial Attitudes

You probably have heard of that famous documentary The Secret, a spiritual interview demonstrating the “law of attraction” and “positive thinking” and visualization of one’s dreams. While it’s not really scientific and might be too far-fetched, it’s worth considering since it works for some people.

Tracking particular thoughts, feelings of confidence, satisfaction, or, vice versa, anxiety, fears around money, can provide a valuable insight into your financial behavior.

Consider several exercises:

• Recall how your parents and other significant adults were talking about money around you, when you were a child and a teenager, did they say “money is evil”, “money is dirty”, “rich people cannot be good in nature”, etc.? ;
• How do you keep money, in messy piles around the house or neatly in one place? Do you know how much cash you have on you? Do you count and check it regularly? Do you record your expenses and income, and what do you feel while doing that?
• What do you feel before checking your account balance, and just after it?
• In which way you run money talk with your partner or other family members? Do you often argue about money?
• How far can you go for money? You should be completely honest with yourself, no one will ever know it.

This and similar gauging can help you understand and control your attitude toward money.

Financial Literacy and Knowledge

We’ve mentioned tracking income and expenses which anyone caring for their personal finance should be doing on a regular basis. However, recording them mechanically without much understanding is pointless, and if you care about your holistic financial well-being, it’s time to update your knowledge of finance.

Some key financial concepts to check your understanding:

• Assets;
• Budgeting and saving, e.g. forming a system of envelops, or funds;
• Investing types (stocks, bonds, funds) and styles (active and passive);
• Risk management, risk and return;
• Inflation.

Do you actively learn new things, are you aware of best practices, do you check courses and books in the field? By investing your time in self-education, you will make informed decisions about your finances, and enhance your financial well-being.

Time Freedom and Flexibility

Time is priceless and precious, it’s linear, one cannot turn back time. That’s why we say “time is money”. Holistic financial well-being assumes that you have freedom and flexibility to allocate your personal time to things that matter to you and which constitute a meaningful life. Do not settle for less.

We suggest you answer yourself on these questions. After you made recent financial decisions:

• Do you have enough time for a healthy sleep routine?
• Are you able to pursue your passions or hobbies?
• Are you satisfied with the quality and variety of what you eat?
• Are you satisfied with your apartment and your means of transportation?
• Do you endanger your life or health, making a living?

There are certain things we cannot buy with money directly: living life, health, happiness. Jeopardizing any of these for money is just not worth it. Prioritizing time freedom, good balance of rest and work, ensuring safe areas of accommodation with clear air to breathe, with safe reliable transportation, that would help to guarantee a more balanced and fulfilling life.

Social Connections and Community Engagement

Humans are inherently social, and as a rule, one cannot be happy without quality social interactions. Consider how your financial state and financial planning (or lack of planning) affects your socializing, your engagement with friends, with interesting communities offline and online.

For example:

• Do you have money to go out, plain and simple? The author of this article remembers her own experience, when she had to skip an attractive gathering in a cafe with other women, because she wouldn’t have money to pay for herself in that cafe, even for coffee and dessert only. Pretty humiliating.
• Are you able to contribute to charity, to support your friend or community you care about?

Nourished and active social connections are just as important as a positive balance on your credit card.

Conclusion

The idea is that everyone chooses the best strategy that suits her. Some explore so-called money magnetism by bringing special figurines of a toad covered in coins or happy Buddah, by posting images of banknotes to their social media. Others prefer journaling their success and gratitude, highlighting positive aspects of how they managed to gain money, as well as what they gained with the help of money in their lives.

In all cases, it’s good to utilize basic financial literacy, actual financial management, caring about core life aspects including physical and psychological health, experiencing elated mood every now and then - when you feel proud and overjoyed with your actions.

We wish you financial freedom.