The Connection Between Money And Well-Being

It is certainly true that money doesn’t make you happy. Still, it can sometimes be quite tempting to believe that the things that money can buy you may go some way in at least making your life a whole lot more enjoyable. Of course, the topic is a whole lot more complicated than that. For one, in order to discuss the hidden connections between banking and well-being, we must first analyse exactly what is meant by the term “well being”. A great way to do this is to ask those who are obviously experts on the subject: The Centre for Well-being at NEF (the New Economics Foundation), for example, essentially defines well-being as how we feel and function, and as a result, how we evaluate our life. This definition leads to some intriguing insights: Well-being does not necessarily mean happiness, although it does include this. Rather, it equates to the broader spectrum of satisfaction, autonomy and having a sense of purpose in life.

There are certain elements influencing and contributing to this, some being internal factors, such as health, optimism and self-esteem and also external ones, such as income, housing, education and social networks (Michaelson, Mahony, & Schifferes 2012). Another such exterior force which can contribute to our well-being are matters of a financial nature, and in particular the relationship we have with our bank. Whether this relationship is of a positive or negative nature can affect our lives on a daily basis and either increase our feelings of worth and value or work in the opposite way. This is why banking decisions are always decisions for life at the same time – and can directly influence our well-being.

The Importance of the Banking System in Today’s Society

The whole foundation of the capitalist society which exists today is built upon money – it is the current barter system. People work for money, receive money into their bank, pay for their homes, food and everything else with it. Because of the singular importance of money for the community at large, methods of managing it are vital. This is why the banking system has been able to attain its powerful position and why financial politics have been subject to heated debate. Simply put, money and the economy are of vital importance today and the UK government recognises the link between the economy, the amount of money people have and their well-being, and measure it regularly with the Office for National Statistics (ONS).

So What are the “Hidden Connections”?

It is important to realise that banking is a symbiotic relationship; each part needs the other. Good banking allows the individual to be in control of their money and in the best case scenario, actually help make your money work better. Using money correctly can actually create more wealth and affluence by saving and investing. Factors such as allowing access of cash, instant fund transfers and making credit available when required all assist the individual in feeling empowered to obtain the items that they want, need and desire from the world. Being able to see something and then purchase it provides instant satisfaction, and hence adds in a positive way to our sense of well-being. Conversely, should we have a poor relationship with our bank and manage our money in a unconsidered fashion where we are constantly overdrawn, being fined, with charges added to our account, then these are all negative influences which create a feeling of disillusionment and disenchantment. It can seem that the money is in control and is encroaching on our wants and desires.

Well-Banking Through Smart Banking

If there are indeed hidden connections between banking and well-being, then you should obviously do everything in your power to establish this link for yourself and put it to your advantage. One of the most demonstrative ways of achieving this is through your choice of bank account. Regular current accounts tend to encourage profligate spending which, in turn, can lead to debt, individual insolvency and, eventually, poverty. Conversely, a basic bank account can support your financial goals and help you live the life you want. By supporting you through a plethora of sensible regulations and support tools, they allow you to focus on what’s really important. Money may thus not make you happy – but knowing that is is in good hands can certainly put your mind at ease.

Reference:

Michaelson J., Mahony S., & Schifferes J. (2012) Measuring Well-being – A Guide for Practitioners – The New Economics Foundation (NEF), 6-7.

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By William Masters

This article was written in association with eccount money, a leading service provider of bad credit bank accounts and online banking services in the UK.

Born in Liverpool, journalist, writer and financial expert William Masters currently lives in London. Masters is a respected specialist for prepaid- and currency-cards, the global banking market’s move into the digital domain as well the effects of the online revolution on finance at large.

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