A study shows happiness is linked to your sense of financial control and not how much you earn

1 min Read Published: 18 Jun 2010

A new survey claims that happiness and self-esteem are influenced by our sense of financial control and not by how much we earn each year.

The Feelgood insight study by AVIVA, and produced with input from a leading psychologist at London's City University, reveals that overall happiness, wellbeing and self-esteem are influenced by our sense of financial control and not by how much we earn. It reveals that those with sensible financial plans in place are happier overall and have a stronger sense of "financial wellbeing", regardless of their pay packet.

People with salaries of £50,000 and above are more likely to have below average self-esteem (22%) than high self-esteem (just 12%), while good health is seen as twice as important (85%) as earning more money (42%).

The AVIVA study also shows that 85% of those with high self-esteem also feel in control of their finances, and nearly half are happy about their financial situation. In contrast, 70% of those suffering from poor self-esteem do not feel in control of their finances. Consequently, no one in this group feels happy about their financial situation.

The research also showed that:

  • 34% think about their financial situation at least once a day
  • 2% claim to think about it every minute of the day
  • 5% of UK adults admit they don't have any understanding of financial products
  • 25% of people with a credit card do not know their outstanding balance and feel out of control with their debt
  • 30% who have a pension do not feel confident that they have the right pension provision in place

Admittedly the survey was commissioned by an insurance company so they have a vested interest in promoting financial awareness. But putting that to one side, this survey does highlight the fact that controlling your finances, as opposed to letting them control you, is more than just an exercise in good housekeeping - it has a major impact on your overall quality of life.

The reason why I’ve highlighted this study is that its conclusions match the principle motivations for creating this blog. We’re trying to dispel the myths that personal finance is something to be afraid of or that it’s too difficult to understand. For most people these are just excuses for being lazy. This blog is crammed full of useful and easy to understand information and advice, for free. So have a look around, take control of your finances, and then follow our latest posts via Twitter, Facebook, Linkedin, RSS or email. What have you got to lose, other than your happiness?