This week was Money Week run by the Commission for Financial Capability (CFFC), and it's been great to see attention drawn in the media and community to important issues like Retirement Saving, Financial Literacy in Schools, Investing, Saving and all the other 'boring' finance topics that are normally given as little attention as possible.
One of the goals of Money Week (and the CFFC) is to build 'Financial Capability'. When I saw this it made me wonder, what actually is Financial Capability? I mean, for some people it could be being able to pay their bills each week, or others it could be being in a position to save, pay off debt or buy a house. For others still it could mean not having a mortgage or being able to invest in property or shares. It could mean travelling the world in your retirement or being able to continue your current lifestyle.
So I did a bit of asking around my colleagues to find out what they thought 'Financial Capability' meant, here are some of their thoughts:
"What financial capability means to me is being able to live within your means. I am fortunate in that I feel financially capable. I am in no means what I would define as well-off but I can pay for necessities, pay down debt, put money aside for a ‘rainy day’, all while still being able to enjoy some luxuries each week. For others, being financially capable may mean that they can pull together enough each week to pay for necessities like housing, food and warm clothes. Defining whether you are financially capable or not will come down to an individual’s own definition based on their situation and goals.
The pessimist in me could also argue that I am not financially capable simply because I have debt and I am therefore enslaved to the bank until I pay it off. But the fact that I live in a healthy home, can afford to eat out every now and then, and regularly enjoy mid-range alcohol, leads me to believe I am doing alright and the only thing I am financially incapable of it swapping out those luxuries for paying off my debt faster!"
The Center for Financial Inclusion defines it as
"The combination of knowledge, skills, attitudes and ultimately behaviors that translate into sound financial decisions and appropriate use of financial services."
How do you define your financial capability?
If you want to checkon the health of your finances, take our Financial Wellness Check
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