The price of wellbeing

How do we measure wellbeing? 20 years of research and surveys through the Australian Unity Wellbeing Index have tracked the wellbeing of our nation and found that Australians are a pretty resilient bunch.

Developed in partnership with Deakin University, the Wellbeing Index has influenced government and business with insights across varying age and socio-economic groups.

The index uses seven domains that combine to influence peoples’ wellbeing—such as standard of living, health, relationships, personal safety, achieving in life, future security and community connectedness.

The research shows that wellbeing matters for the health of individuals, communities, and the nation. “If you have better wellbeing, you’re more likely to have better physical and mental health, and decreased risk of disease, injury and illness,” Associate Professor Delyse Hutchinson, lead researcher of the Australian Unity Wellbeing Index, says.

20 years of research has shown that Australians are resilient when facing tough times. Even in 2020, after bushfires and in the middle of the first COVID-19 lockdown, personal wellbeing was at the top of the average range, according to the Australian Unity Wellbeing Index.

Does money matter?

Conversations about wellbeing often focus on physical and/or mental health. But our finances, or standard of living, is a very important factor when it comes to wellbeing.

The standard of living domain is part of what researchers call the “golden triangle of happiness”, this represents the three domains that are dominant in helping people feel positive about everyday life.

As Associate Professor Hutchinson explains, “We have found over many years of research that, in Australia, personal relationships, standard of living and achieving in life have more of an impact on our wellbeing than the other domains. And, if you can work on those, you’ll often see a bigger increase in people’s wellbeing.”

Esther Kerr-Smith, CEO of Wealth and Capital Markets at Australian Unity, is a big advocate for what she calls the “non-sexy” financial side of wellbeing.

“For most people, it is not about the latest tech start up, options trading, or a large portfolio of investment properties—although these are interesting and valid things—it is about financial security, standard of living and overall wellbeing which are critical to achieving and maintaining Real Wellbeing,” says Esther.

Over the last two decades, satisfaction with standard of living has been slowly increasing in Australia, reflecting most people’s comfortable financial situations. Notably, the Australian Unity Wellbeing Index 20th Anniversary Commemorative Report shows that there has been a slight increase in satisfaction among adults aged between 18 and 45*, indicating that we’re better off during our main working years than before.

Money matters to wellbeing, but it matters more to people who have less of it. The Australian Unity Wellbeing Index shows that wellbeing improves in line with household income until it reaches the $101,00 to $150,00 range—at which point the relationship between money and wellbeing weakens. However, the reverse also holds true, with the research showing that that people living on a gross household income of $60,000 or less struggle to reach a normal level of wellbeing.

In fact, our research shows that even a moderate level of financial strain can cause wellbeing to unravel.

“If you are worried about how you’re going to pay your bills, or how you’re going to fund your retirement, that is a leading indicator of future wellbeing issues in health, standard of living and care,” says Esther.

But it’s not just about how much money you earn—it’s also about how you manage it. Australian Unity Wellbeing Index research has shown that greater financial control is associated with higher wellbeing, while people with low levels of financial control have wellbeing scores below the normal range.

“Even if you’ve got financial security and a decent standard of living, if you don’t feel empowered and in control, it can still be very stressful,” says Esther.

The upshot? Money matters, but we also need to get the foundations right. “People do not need to be rich to have financial wellbeing,” says Esther. “They need a reasonable standard of living and, most importantly, they need confidence about their financial affairs being in order enough to support them in the future.”

Learn more about the Australian Unity Wellbeing Index.
Click here to read the 20th Anniversary Commemorative Report.
* All statistics cited in this article are sourced from the Australian Unity Wellbeing Index 20th Anniversary Commemorative Report.

 

How is the index measured?

The Australian Unity Wellbeing Index measures wellbeing by asking respondents how satisfied they feel in certain areas of their life on a scale from zero to 10. The answers are then converted to an overall score between zero and 100, indicating where each person’s average wellbeing falls. The index is a measure of both individual and community wellbeing and has been adapted and validated for use cross-culturally, with both adults and children, and among people with an intellectual or cognitive impairment.

Relationships: The quality of your relationships with family, friends and significant others.

Achieving in life: Having a purpose, direction or meaning in your life.

Standard of living: Having enough money or financial control to live and enjoy life.

Health: Your physical and mental state.

Community connectedness: A sense of belonging and connection to the people around you.

Personal safety: How we feel about our safety (and how this translates into our communities and our nation overall).

Future security: How we feel about our future in terms of job security, health, the environment and other factors.

 

Important information

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