Financial security is the perception that you have enough money, so you don't routinely worry about it.
Financial well-being enables people to enjoy everyday pleasures of life: seeing your children do well, having friendships, good relationships, being able to go places, etc.
The federal Consumer Financial Protection Bureau (CFPB) defines financial wellbeing as:
As a continuum that is not strictly aligned with income level, financial wellbeing ranges from severe financial stress to being highly satisfied with one's financial situation. Through education, opportunity, and support, people can move along the continuum to greater financial wellbeing.
According to a 2018 survey, the vast majority of respondents defined financial well-being in terms of freedom.
Financial experts often use general benchmarks to set standards for financial wellness, such as an emergency savings fund covering three to six months of expenses, or the amount needed for retirement.
But if you are feeling financial stress, these targets can feel intimidating. Overly ambitious goals can make you feel scared and anxious and may affect your physical and emotional health.
You don't have to be wealthy to achieve financial well-being. Research shows that beyond a modest point, more money has a limited effect on happiness.
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