How money really makes you happy
In our blog post last month, we talked about the need to look ‘beyond the numbers’, to look at what mattered to you and how financial planning is a different activity than merely organising your finances in the most appropriate and tax efficient way.
This month, we wanted to take those ideas forward a few steps and explore them a little further.
Take money as a starting point. Money is normally accepted as the driver of all things. Indeed, we are ‘financial’ planners and we help our clients with money matters.
But when we sit down with clients who are in their later years to assess their needs and check where they want to get to, what they want to do and how they want to feel in later life, when we really ask, ‘what makes you happy?’, money rarely factors into the responses.
Typically, clients will primarily talk about their children and grandchildren, about how they are glad to have the time to see them grow up, to chip in with childcare and to spend time with them whenever possible.
Relatively little things are also more frequently mentioned than you may imagine. Things like having the ability to spend an hour reading in the local pub or cafe, being able to walk to the shops in the morning, having the freedom to alter plans at the last minute.
The common thread in all the above is the lack of money required for the events to happen. A couple of pounds for the cafe, the cost of petrol to drive to your children’s house perhaps, but, all in all, the expense is low, if not zero.
Where money factors into this equation is as an enabler. Having the financial freedom from work has enabled the above activities, but is not actually required for any of them to take place.
It’s a similar story in other ways too. Your ambition in retirement might be to fly to New York first class, for example. Money enables this to happen, but it is not the money element that you will remember; it is the experience, the sights, the people whom you meet whilst there.
Money is important, of course it is, and planning your finances equally so, but it’s important to remember that, in any financial plan, success is defined by achieving what you want to achieve, by reaching that place that you want to get to. Money in and of itself doesn’t really make you happy, but having the freedom to see the grandkids whenever you want to, to decide to go on a short break away tomorrow, by having a lazy afternoon with a book; that’s where true happiness lies and what true financial planning can help you to obtain.