Financial comfort is a state of mind, which can look slightly different for everyone. Do you feel financially comfortable?
What is Financial Comfort?
Financial comfort is a state of feeling secure and having control over your financial situation. Financial comfort is not the exact same for everyone because it’s a feeling based on your own individual circumstances, needs, desires, and attitude towards money. This may look like:
- Having enough income to comfortably meet your needs while having some disposable income left over to spend on the things you want
- Being debt free
- Feeling like you are in control of your financial situation
- Having savings
- Not living from one payday to another
- Not feeling overly stressed or worried about money
- Having full knowledge of your income and expenditures
- Having a good credit score
- Feeling confident about your financial future
- Working towards financial goals
- Paying off your mortgage
- Being able to pay for unexpected expenses
Research
According to research by Yougov, 4% of respondents feel very comfortable and 35% feel relatively comfortable financially. 37% responded that they often don’t have money for luxuries but can normally cover their essential costs comfortably.
However, 15% said that they can only just afford their costs and often struggle to make ends meet and 4% reported being unable to afford their costs, often going without essentials like food and heating. This two groups of respondents represent a significant minority of our population, who are living in financial uncertainty rather than financial comfort.
St James’s Place also found that even as wealth is growing in certain parts of the UK, many individuals still don’t feel financially secure. 58% of their respondents reported not feeling financially comfortable, and despite them concluding that those with financial plans tend to be better off, only 39% of their respondents have one.
Achieving Financial Comfort
Two key components of financial comfort are understanding and planning…
Understanding – Financial literacy is fundamental to making informed and effective decisions with your financial resources. Our aim at Red Star Education is to help improve financial literacy levels, so that everyone can feel confident and capable when managing financial situations. Visit our online financial education academy to start your learning journey with us, with bespoke educational video content on a huge range of financial topics.
Planning – looking at your current financial situation and establishing clear financial goals can allow you to then make a plan of how you are going to achieve these goals. Why not check out our blogs on financial planning at work and why you should make a financial plan?