Whether you call it wellbeing, wellness or happiness, your relationship with money is an important factor in achieving a high level of satisfaction in life. The aspirational goals of financial wellbeing are reaching a state of financial security and freedom of choice. The practical actions you need to take to get there involve financial control. Specifically maintaining a thoughtful spending budget, making sure you have enough cash for emergencies and saving for retirement allow you to focus on the more meaningful aspects of your life.
Host – Teresa Mitchell, CFP
ladymoneyllc@gmail.com
In my 20 years in the industry, I have had over a thousand conversations with women who have not felt they have reached their financial potential – usually in the areas of investing and subsequent financial security. I have found the key to moving forward from the image of bag lady to empowered lady is having a different kind of conversation with women than they usually experience with a financial advisor. It is about focusing more deeply on what matters in terms of family, community and life purpose. Approaching the conversation with compassion and a goal of honest, authentic connection creates a sense of trust that makes financial education and taking investment action not only possible but desirable.
To that end I left my longtime wealth management firm and am launching a personal financial coaching platform -- LADY MONEY, LLC. It is intended to help women achieve a sense of financial wellbeing around investing for retirement that imparts peace of mind and ultimately leads to financial security.
In the Lady Money program, I use my prior experience in consumer education as a media chef for the food & wine industry to create exercises that are simple and fun yet effective. There are many similarities between food and money. We tend to view both with outsize emotions and limiting beliefs. But in their simplest form, food is fuel & money is a tool. Are they more? Not in and of themselves. It is up to you to use them as your own personal palette. At the heart of it – they don’t have the power – you do.
Resources...
Consumer Financial Protection Bureau https://files.consumerfinance.gov/f/201501_cfpb_report_financial-well-being.pdf
The Golden Triangle of Happiness
https://www.huffingtonpost.com.au/2015/10/18/happiness-wellbeing_n_8323916.html
The Australian Wellbeing Index
https://www.australianunity.com.au/wellbeing/what-is-real-wellbeing/what-is-the-wellbeing-index
Episode Transcript:
Teresa Mitchell, CFP:Values and money don't mix, or do they? Join me, financial coach, Teresa Mitchell to find out. Let's explore how women can make money while making a difference. This is Lady Money!
Welcome! Please join me for Lady Money Tips in Ten.
While much of money and investing is actually common sense, it is easy to get tripped up by industry jargon and concepts that you may not have been exposed to on an everyday basis. The point of Tips in Ten is to take a deeper dive into some of the things we discussed during the Lady Money interview podcasts. And then to give you a few nuggets you can use to improve your own life. Let's get started!
On the surface, money and wellbeing don't seem to have much in common, do they? But that hasn't always been true. The word wealth comes from the old English "weal" which means wealth, welfare and well-being. Weal is related to an even older word, "wel", which meant 'in a state of good fortune, welfare or happiness'.
At some point in our recent history, we lost the holistic perspective and money and/or wealth became detached -- viewed more as cold, hard cash, or at the least with mildly negative connotations. The reason I bring this up is because many of us unconsciously view money as an end, rather than a means. We all form most of our important beliefs as children, including about money. But as adults, we often lose touch with these emotional connections, leaving us prey to deep feelings we don't understand. Fortunately, things have begun to change in recent years as the search for life balance and meaning has become mainstream. Learning what really brings us life satisfaction, and the true role of money in that endeavor is an important step in achieving the sense of wellbeing we all desire. Let's start by exploring wellbeing, especially financial wellbeing and why it's so important.
What is wellbeing and is wellness the same thing? The words wellness and wellbeing are often used interchangeably, but are they? While the concept of wellness, or the opposite of illness, traces back centuries the movement really picked up steam in the 1950s after the World Health Organization (the WHO) used the term wellbeing in their constitution. While there is no universal agreement. Wellness is often used to describe the health of the physical body. Wellbeing encompasses a broader perspective and constitutes the combined state of the body, mind and spirit. Not a totally new idea, as this trifecta was used to symbolize the YMCA as early as the late 1800s.
What do we mean by financial wellbeing? Wellbeing in an even broader sense, refers to what is intrinsically good for us. The word is originally Italian, and from early on it indicated an ongoing positive state of health and welfare. Financial wellbeing defines how people feel about the control they have over their financial situation. Based on a research study of consumers around the country, the federal agency Consumer Financial Protection Bureau defines the term "financial wellbeing" as having an acceptable level of financial security and freedom of choice. They determined the factors that lead to a sense of financial wellbeing are -- one's environment personality and a level of knowledge.
Is there a relationship between money and happiness? Well, your next question might be -- are happiness and wellbeing the same thing? Spoiler! The answer is kind of. A significant evidence-based study "The Australian Wellbeing Index" suggests there are three key components to a strong sense of wellbeing -- close personal relationships, financial control and a sense of purpose. They called this key to a high level of life satisfaction "The Golden Triangle of Happiness". Catchy title, but even the study points out that while most of us also use these words interchangeably, happiness tends to come and go while wellbeing is a more stable.
What is financial control and how does it relate to wellbeing? So, what do they mean by "financial control"? And why is it thought to be fundamental to happiness? The Australian Wellbeing Index showed that one's sense of wellbeing rose with household income -- to a point. After about a hundred thousand dollars, money wasn't much of a factor. Participants in the study indicated the power of money was mostly related to alleviating stress. That meant even people with lower income could have a sense of happiness and wellbeing, if they felt in control of how they spent their money. Key components are an awareness of month-to-month finances, maintaining an emergency fund, tracking long-term financial goals and having the freedom to make desirable choices in life.
Surprisingly while close relationships, financial control and a sense of purpose were the drivers of happiness and wellbeing, physical health was relatively unrelated. To put it another way, people are happiest when they are living a meaningful life. When you eliminate the worry of a lack of money, that life becomes golden!
Wrapping it all up -- to find your golden triangle of happiness, do some work on your own attitudes about money and make sure you are spending time on both your short-term and long-term financial future. Then money becomes the worthy means to an end that it is meant to be.
Thanks so much for listening! I hope you found Lady Money Tips in Ten helpful. If you have any questions, you would like me to address or if you want more information on the Lady Money financial coaching program or blog, check out the Show Notes.
So, until next time, this has been Lady Money -- where money and values do mix.