The Consequences Of Poor Financial Well-Being

BY DR UCHE ESEGBUE

We need to begin to work assiduously to prevent suicide in our communities. Most of the cases of attempted suicide that have landed on my desk are cases of financial crisis. Financial well-being goes beyond having money to meet essential financial obligations and paying your bills. Financial well-being also includes meeting future and unanticipated financial responsibilities and making financial choices that align with your goals, values, and expectations without experiencing constraints in using financial resources.

The factors responsible for financial crisis include; imability to make income as majority of the populace are low income earners, extravagance spending habits. lacking in the prioritization of expenditures, poor financial literacy: poor savings habits: where people obtain loans and advances for parties and ceremonies, or activities which does not add financial or economic value, which is of serious concern, leading to growing debts obligations: gambling with their incomes and savings, thus eroding their financial well-being, further subjects these people to severe financial pressures.

The consequences of poor financial well being include; Mental Health Issues: anxiety and depression to the extent of developing suicidal ideation, and few have taken their lives untimely, particularly in the areas of debt, poor living standards reduces access to health and social needs. Data and research have shown that out-of-pocket health Expenditures in Nigeria account for 71.03%, one of the highest in Africa. This has an additional burden on the citizens, and where an individual is experiencing financial instability, such would find it extremely difficult to meet adequate healthcare services. In addition, it would also impact the ability to meet other social needs, such as access to quality education for their children and dependants.

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Strain Relationships: The shame and reproach associated with a lack of personal finance management often lead to a breakdown in relationships. Financial constraints are one of the factors that often lead to marriage breakdown, conflict among families, and desertion from friends and loved ones, which may lead to isolation due to shame and embarrassment, which can also lead to low esteem of the individual.

Limiting Career Growth and Development: Financial instability prevents individuals from focusing on jobs due to depression and anxiety, thus leading to low productivity at work, which may negatively impact career growth and development.

Increases Trust Violators in Organizations: Occupational fraud schemes, such as asset misappropriation, skimming or cash larceny, increase at the workplace, where an employee intentionally steals from his employer. Employees who lack integrity may steal from their employers to meet their financial obligation, relying on the rationalisation that they are entitled to it or merely borrowing from their employers to justify such criminal behaviours. Similarly, a trusted individual can become a trust violator in the face of financial pressures, which could be attributed to the absence of proper personal finance planning strategies

FINANCIAL PLANNING IN A TURBULENT ECONOMY
The Importance of Personal Finance Management. The most important thing that will help us is to shore up our income by learning skills that give economic empowerment. Personal Finance Management then can help in budgeting and planning your personal finances to attain financial well-being. An individual should be able to ascertain what is spent on rent, transportation, feeding, utility subscriptions, insurance, etc., and effectively manage income to ensure that budgetary provisions are not exceeded.

For instance, where it is necessary to cut back expenses on items or change service providers that offer cheaper, reliable, and quality services, such should be explored, thus bringing down expenses on these items and bringing about an increment in part of the income that can be kept back either for saving or investment.

7 Ways To Manage Personal Finance
1. Budgeting Plan
A budget helps you to plan your estimated expenditures from your income streams. With budgeting, you can list items of priority against impulse-driven expenditures. You can plan the amount of your disposal income for transactional purposes from those you intend to set aside for savings and investments. You can also review your budget to see where changes occur in your income stream.

2. Saving for the Rainy Day
Savings serve as risk mitigation against a rainy day, and this must be done consciously, even very painstakingly, as it involves lots of financial discipline and a change of lifestyle to reflect the changing nature of the economy.
You should spend your money on things that are essential and reduce the number of parties that you attend. Extravagant lifestyle should be curtailed, and the money should be put to reasonable use.

3. Investing in Relatively Liquid/low risk assets that can be easily converted into cash in an emergency situation . Commodity assets, such as gold, diamond, silver, etc., can be invested in reputable organisations as they have relative price stability in the commodities market and are less volatile in the global market. Other forms of investment include treasury bills and treasury certificates. These are risk-free government securities as the Apex Bank backs them on the land. Landed properties are good to invest in as they continually appreciates in value. Furthermore, you can also invest in long-term finance, where you purchase shares of reputable organisations in the secondary market, availing you of the opportunity to earn dividends, and you can also sell such shares, particularly where the shares have appreciated. This improves your liquidity position to meet other emergency needs. You may also invest in other lucrative stocks in the market.
4. Debt Settlement

You must make concerted efforts to pay off your debt to have financial well-being; as the debt age increases, the debt’s interest element keeps increasing, further eroding your financial resources to meet other needs. While you make concerted efforts to stay away from debts by fiscal discipline.

5. Seek for Professional Expert Advice and Financial Literacy
Financial advisors can help you manage your financial resources effectively and develop personal finance strategies to meet your specific needs. They can also help provide investment advice, guide your investment decision, and explore the various legislations that would help your financial planning. It would be best if you educated yourself about financial literacy.

7. Create Emergency Fund in your budget
One of the motives of holding money is for precautionary purposes. You must set aside some funds to meet unforeseen circumstances that may arise, such as car repair, medical-related issues, etc. even before they occur.

Conclusion
The absence of proper personal finance planning is a precursor to poor financial well-being, which has several consequences on an individual, some of which are anxiety, depression, suicidal ideation, mental health issues, etc.

It is highly imperative for an individual to carefully set a financial goal, develop an effective financial plan, put in place a personal budget, work toward the implementation of the financial plan, review such implementation and revise the plan where changes arise and continue to work towards the attainment of financial freedom and seek for professional help as these serve as a trajectory to financial wellbeing, emancipation, and stability.