Published: April 2020
By: Ray Kirk, Ph.D., Federal Benefits Specialist
The Consumer Financial Protection Bureau (CFPB) has identified financial well-being as the ultimate measure of the success for financial literacy efforts. Financial literacy efforts traditionally have focused on gaining knowledge and applying that knowledge appropriately to make good financial decisions. Financial well-being is defined by CFPB “as the state of being wherein a person can fully meet current and ongoing financial obligations, can feel secure in their financial future, and is able to make choices that allow enjoyment of life.”
- Having control over your day-to-day, month-to-month finances. Managing your finances rather than having your finances manage you; the ability to cover your expenses and pay your bills.
- Having the financial freedom to make choices that allow you to enjoy life. Being able to make choices that allow you to give meaning and purpose to life; increase your personal happiness by giving presents, taking a trip, going out, etc.
- Having the capacity to absorb a financial shock. Savings, emergency funds or insurance are sufficient to pay for an emergency repair or expense, or a period of unemployment or illness.
- Being on track to meet your financial goals. Having a formal or informal financial plan and actively working toward your financial goals.