Why your pension is a key part of your financial wellbeing
Why your pension is a key part of your financial wellbeing.
Pension. The P word that we hear once in a while, and know we should care about but ultimately often falls to the bottom of the life admin pile.
We have to juggle so many financial obligations: paying today’s bills, paying tomorrow’s bills; even paying last week’s bills! We have to save for trips, save for houses and save for ourselves in old age.
With this overwhelm, we are more likely to focus on what is right in front of us, such as our current monthly budget or a short term money goal, rather than the longer term issue of building a pension.
The worst thing about this is that time helps a pension. The miracle of compound interest, which allows sums of money to grow exponentially over time like a rolling snowball, means that time helps to grow our pension pot exponentially if we invest early enough. The longer we put off focusing on growing our pension, the less time we have to help it grow.
How do pensions make us feel financially well?
Financial wellness is a subjective concept, meaning what financial wellness means to one person may differ from another. At Financielle, we have our own definition of Financial Wellness:
“Being in control of money, financially stable, having security for the future and the ability to make positive life choices.”
This meaning helps to stretch from the right now, to the later.
Security for the future
Growing your own pension to a level that can sustain you later in life is an incredibly empowering feeling. We have had community members who have built a growth plan based on a retirement number they are aiming for that will mean they can be financially well later in life.
It helps us show we have enough split between saving for the future and spending now.
By having a strong pension contribution incorporated into your budget, it can help show you that you have enough right now. This may not be easy at first and may involve gradually changing your budget bit by bit, switching things out that you feel are wasted spending or don’t bring you joy with longer term choices like pensions.
We’re investing in ourselves
Once you start to increase your pension contributions, you really do become accustomed to them just being part of your normal budget, like any other bill. Why should the government, the mortgage company and the utilities companies be paid and your future self not?
The biggest regret people have when it comes to investing is not starting sooner. With a flexible pension product like PensionBee, you can start small and increase your contributions as you feel more financially well and as you develop your confidence.
Being able to physically see your pension balance on the PensionBee app whenever you want can give you the confidence to keep adding to it and building your security for the future.
Capital at risk.
Sponsored by PensionBee.
Changing The Way We Gift With Wealthify
The festive season is upon us and the list of gifts you need to buy grows. You’re asking what the little ones in your life would like for presents and you may be getting concerned about time, money and more important than ever before – the planet. In anticipation of the gift-receiving, it could be […]