BY SHARI HOOPER, CSA®, BFA™ SENIOR WEALTH ADVISOR
Financial happiness is a state of mind achieved through financial security and the ability to meet basic needs, allowing for a sense of well-being and control over one’s life. While money can enhance happiness, it’s important to use it wisely and not focus solely on accumulating wealth.
Earlier this month, I asked my Women & Wealth group how they would define financial happiness. Here are some of the answers I received:
- No worries about retirement funds
- Stress-free
- To be worry-free when retired and travel
- Security
- Lower insurance costs and no credit card debt
Each of these answers is correct for the person giving it. If you were to ask yourself right now what financial happiness is, what would you say? I often find the answer is what steers every financial plan and, in turn, paves the way to happiness in retirement.
How do you define financial happiness? Here’s a breakdown of what contributes to financial happiness per a simple Google search, which category do you align your financial security?
- Financial security and stability
- Meeting basic needs: Having enough money to cover essential expenses such as housing, food, and healthcare is crucial for feeling secure and reducing stress.
- Avoiding debt: Debt can lead to significant stress and financial instability, so working towards debt repayment and financial independence is important.
- Having a safety net: Building an emergency fund can provide peace of mind and help you navigate unexpected financial challenges.
- Financial goals and planning
- Setting financial goals: Having clear financial goals (e.g., buying a house, saving for retirement, traveling) can provide direction and motivation.
- Creating a budget: A budget helps you understand where your money is going and allows for better financial decision-making.
- Saving and investing: Regularly saving and investing can help you achieve your long-term financial goals and build wealth.
- A positive money mindset
- Understanding your relationship with money: Reflect on your thoughts and feelings about money as this can influence your financial decisions and behaviors.
- Forgiving past mistakes: Don’t dwell on past financial errors; focus on learning from them and moving forward.
- Practicing gratitude: Appreciate what you have and avoid constantly comparing yourself to others.
- Focusing on experiences over material possessions: Spending money on experiences and activities can often lead to greater happiness than accumulating material possessions.
- Spending money on time: Paying others to do tasks you don’t enjoy or investing in equipment that saves time can enhance your quality of life.
I tend to focus more often on Category 3, but it’s likely different for others. How we are raised plays a crucial part in the formation of our saving and spending habits. Some people live care- free and believe money to be made easily, while others find it necessary to work hard and save all they can. Again, each choice feels right to the person making it.
As I wrap this up, I find the word “moderation” prominent in my thoughts. We need to live for today while saving for tomorrow. A balancing act, to be sure, but without both, neither is accomplished.
