Financial health in Belgium has been saved
Financial health in Belgium
Working together to boost financial resilience for all
For the first time in Belgium, the financial health of our citizens has been studied coherently, revealing that two thirds of Belgian households (64%) are not financially resilient. Important efforts have been made in recent years to enhance financial literacy, for example. To improve the financial health of all Belgian families, we call for cooperation.
Importance of financial health
While studies on financial literacy, household spending patterns, indebtedness, etc. have inspired the launch of impactful initiatives, it remains difficult to achieve concrete behavioural changes and encourage people to modify their financial approach.
Therefore, together with our partners, Argenta and University of Ghent, we advocate focusing on financial health. It is a concrete and positive concept that can be easily communicated. It addresses hard facts, but also the emotional side of money matters.
Financial health scale
Financial health involves balancing six underlying domains: income, expenses, savings, debts, planning, and financial skills. Being financially healthy means being able to comfortably meet current financial needs and obligations, and build the necessary financial security to pursue (future) life goals.
Where do the opportunities lie?
Lack of planning complicates financial management
Almost one in two Belgian families do not make plans for more than a month, and more than a third make no financial plans at all for their family's future. Even among financially healthy Belgians, 38% do little or no planning. Belgians who plan do so mainly for the long term, for example for their retirement or as insurance in case of fire, burglary or flooding.
Planning is an important step toward overall financial health. Focusing on the short term makes it more difficult to make ends meet financially and increases the risk of arrears.
Financial health is inextricably linked to social wellbeing
Knowledge is crucial for being financially healthy as our ability to assess risk also influences our financial behaviour. Fortunately, in recent years the government (e.g., Wikifin), Febelfin, Assuralia, educational institutions, banks, etc. have invested in financial literacy. Still, there’s a long road ahead.
Our research not only takes into account knowledge, but also the emotional side of money matters. Alarmingly, 61% of those surveyed feel powerless when thinking about their financial situation, and 50% do not know how to gain more insight into their future financial situation.
Broad coalition is needed to improve financial health
Many valuable initiatives have already been taken to improve some aspects of financial health. Nevertheless, there is clearly a need to shift up a gear and focus on financial health overall to achieve concrete behavioural changes.
Respecting all their obligations, financial institutions can play a very positive role in identifying and improving the financial health of their customers, both digitally and through their employees.
Curious about your own financial health?
Take part in the survey & find out your position on financial health scale.