Financial Wellness
At Weaver Street Market in Carrboro, I was at my usual table with coffee and a laptop when the couple at the next table started talking about a CSA. She had the spring CSA sign-up open on her phone: $36 a week for local produce. She thought it was worth it. He didn't look up. "That's… a lot of lettuce."
They were not really arguing about lettuce. She was talking about nourishment and community, and he was talking about security.
What it covers
The National Endowment for Financial Education defines financial wellness as being able to meet current and ongoing obligations, feel secure about the future, and make choices that allow enjoyment of life. It depends less on what you have than on how you feel about what you have. It rests on four things.
Stability
Meeting today's obligations without strain.
Security
Confidence that the future is provided for.
Alignment
Spending that reflects what you value.
Enough
A working sense of when you have enough.
The story behind the numbers
I grew up equating success with stability, and stability with self-worth. Saving felt virtuous. Spending felt vaguely shameful. It took me years to see that money itself is neutral, and that the meaning comes from us.
What the research measures
Anandi Mani, Sendhil Mullainathan, Eldar Shafir, and Jiaying Zhao tested 464 sugarcane farmers in Tamil Nadu, India, twice, once in the lean months before harvest and once after they had been paid. The same farmers scored lower on cognitive tests before harvest, and the difference could not be explained by time available, nutrition, or work effort. In a companion experiment at a New Jersey mall, thinking through a hypothetical $1,500 car repair, rather than a $150 one, lowered test performance among lower-income shoppers but not among wealthier ones. The authors argued, in Science in 2013, that money worries use up mental capacity that other tasks need.
In 2010, Daniel Kahneman and Angus Deaton reported that day-to-day emotional well-being leveled off at an income of about $75,000. In 2021, Matthew Killingsworth at the University of Pennsylvania found that it kept rising. In 2023, Killingsworth and Kahneman, with Barbara Mellers as arbiter, reanalyzed Killingsworth's experience-sampling data. For most people, happiness kept climbing with income. For the least happy 15 to 20 percent, it rose until about $100,000 and then leveled off.
Listen and read
The Well-IQ assessment is free and takes about 15 minutes. It scores Financial alongside the other eight dimensions.
Educational content, not medical or financial advice.