Financial wellbeing and how much does it matter?

Financial stability contributes to the general wellbeing of the average person. It translates to better financial habits, lifestyle, better fitness, being able to enjoy life and lead a healthy family life, as well as being able to save finances. Financial wellbeing can many times translates as the motor of a city, of nation, of a continent. The better the score, the more economic drive and societal stability there is, also for families and elderly above 75 y.o.

Simply explained the financial wellbeing score is how much a person is being able to cover his or her financial needs while saving for the future. In some contries it corresponds to one's credit score. While being important for the overall wellbeing and togetherness of ones community or in bigger picture maybe even a country, it does not always correspond to the person capabilities - oftentimes factors such as financial or other crisis may contribute to fluctuations in the ability to outperform financially. While this is no reason for fear, it is important to have reliance on either own savings, friend circles or one's own skills and capabilities which can correspond and be turned into financial goods.

Oftentimes the best developed economies in the world have larger differences between states or cities and this is mostly due to the fact that in the open democracies with more of integrated freedoms and securities, there are different societal wellbeing and advantages. The more rich and the less rich may live in the same city while surpassingly being burdened by different barriers.

Other democracies but more closed democracies where there is strong sovereignty or conservative mentality, which works well for the country, less differences and better financial wellbeing scores are observed.

It is a different question to think about the happiness and financial wellbeing, how much they depend on education, knowledge, one strive to achieve and even give a lot. Personally and since I have started working, half of the finances I have recived were alsways going to charity or research and developent for my company. Those are simply my financial habits, that I think correspond to me as a person and translate my view of the world that our greatnesses is many times in what we give and by giving, we actually recieve a lot more in long term. So I always teach young people to be generous in sharing and supporting different causes or even among each other. This is how the actual greatness is able to flourish.

Many important people from science, what I am deeply interested in, take Einstein, has worked next to their research completely different professions in order to be able to have an affordability of a life. As back then there were different times, now, we also live in the middle of wars, post-pandemic. To be able to achieve balance - financial. One must peruse his or her passions, desires, work, career, opportunities tirelessly while being in good of society.

There are common goals which unites us, and the pursue to know more - even what is a financial score, is pursuing knowledge. Why this is so importnat, is because knowledge can bring a society one step further or several steps further. To be able to do more while complied with values, should be an assurance for the reliability of a society and this brining together governments and business, has to ensure better financial response.

Here I will present interesting financial findings from recent history, here in Germany. While the average household's net wealth experienced a nominal increase from 2021 to 2023, its value actually decreased when adjusted for inflation. Despite this recent dip, net wealth is still higher than it was in 2017, the last survey year before the pandemic.

Despite a need for financial security, many people in Germany are encountering challenges with the rising cost of living, which 33% of survey respondents identified as the primary obstacle to their financial well-being. Other significant barriers include insufficient income and some lack of financial literacy.

As a result, a substantial number of employees are looking to their employers for improved support as a result of their work. The most requested forms of support are better employee benefits, enhanced retirement plans, and more transparent pay structures.

On a positive note, German employers are leaders in providing one of the most sought-after benefits: employer-sponsored pension programs.

Following a period of economic stagnation and recession, Germany's economy is showing signs of a gradual recovery, which is expected to improve financial wellbeing. Multiple economic research institutes forecast a return to growth in 2026. The main drivers for this positive shift are not only governmental stimuli, but as well Gradual Recovery in Consumption and Investment: After a period of low consumer sentiment and reduced household spending, private consumption is expected to pick up. Corporate investment is also forecast to recover, driven by a brighter economic outlook and government incentives. A lot has being changed the country together with the world always strives for even better stimuli and outcomes.

Because we invest in reading, it is worth noting the importance of financial education. Few months ago I have first published my blog post on starting to invest early, proposing means and tools to choose where you can invest effectively according to each and everyone's financial goals. The article is called "Everyone can invest, you too".

Financial freedom can be illustrated as a journey an individual or a family can take on. To reach the destination I suggest the following few guides towards the way especially as the basic preparation.

Budgeting

Forget complicated spreadsheets and stuffy financial jargon. Think of your money as an adventure, and your budget is your map. It's the one tool that tells you exactly where your money is going and where you can steer it to get to your destination—whether that's a new car, a trip, or just peace of mind. As Warren Buffett wisely put it, "Someone's sitting in the shade today because someone planted a tree a long time ago." Your budget is that tree.

Try to Pay Yourself First

Before you pay a single bill or buy a coffee, pay yourself. Make saving an automatic habit, like brushing your teeth. Set up an automated transfer to a savings or investment account the moment your paycheck hits. This isn't about deprivation; it's about building a fortress for your future self.

The Magic of Compounding

Investing can sound intimidating, but it's simpler than you think. Start small. The key isn't picking the perfect stock; it's consistency. By investing a little bit over a long period, you let your money work for you, like a snowball rolling down a hill. The longer it rolls, the bigger it gets. This is the magic of compounding, the very thing that makes time your greatest financial superpower.

The Debt Dragon

High-interest debt, especially from credit cards, is a beast that eats away at your financial progress. It is like trying to fill a bucket with a giant hole in the bottom. Slay that dragon by paying off your most expensive debts first. As Buffett advises, avoid credit cards. It's a simple habit that keeps you from spending money you don't have.

Live Healthy, Not Hard

Lastly, prevent falling into the trap of “lifestyle creep.” As your income grows, it's tempting to spend more and often times each of us does so. But true wealth isn't about owning the most expensive things; it’s about having options and freedom. By living within your means, you create a buffer for life’s surprises and open the door to true financial independence.