Money doesn’t buy happiness

Most of us know that money doesn’t buy happiness. Australian researcher Hugh MacKay in his book, The Good Life (2013), concludes that “a good life is not measured by security, wealth, status, achievement or levels of happiness. A good life is determined by our capacity for selflessness and our willingness to connect with those around us in a meaningful and useful way.” We believe that if you have financial goals and a plan for your finances, that’s the first step to financial happiness. Getting the fundamentals in place means you know how you are going and where you are heading financially. This can help you to achieve happiness and can contribute to a life well lived.

Financial Planning helps you achieve

Kym Irving in the paper The Financial Life Well Lived: Psychological Benefits of Financial Planning (2012) suggests that “best practise financial planning is likely to have positive influences on individuals’ well-being and life satisfaction”.

What is best-practise financial planning though? Most people go to see a financial planner for a specific purpose. They might get insurance cover, boost their super or take out an investment fund. But we believe that financial planning can provide more than just a quick fix. The main premise to our financial planning process is to ask why – Why do you want to do …(whatever it is that you want to do). We go through your goals and aspirations using our goals exploration technology. This aims to uncover what your needs and wants are now – and into the future. Kym Irving suggests that “planning for goals is associated with a greater sense of control, which in turn is linked to increase perceptions of well-being” (Irving, 2012).

Working collaboratively gets results

We also like to work with you – not for you – because we want you to feel a sense of satisfaction when you achieve your goals. We can coach and guide you, but ultimately it’s up to you to make the decisions about whether to go ahead with our recommendations. This active engagement in the financial planning process has been shown to enhance a sense of life mastery and control increasing the feeling of being satisfied with life (Irving 2012).

Financial satisfaction contributes to a life well lived

According to Irving, financial satisfaction is one of the underlying criteria contributing to overall life satisfaction. If you think about it, this is an inherently obvious fact. How do you feel when your credit card is at its maximum, or a number of bills are due at the one time, or you need to pay for something by dipping into your ‘rainy day’ fund? All of these things cause stress and anxiety. Try to put in place:

  • the financial fundamentals in place to deal with unexpected expenses,
  • insurance to help in times of crisis,
  • a well managed retirement plan to kick into gear when you stop working,

These things will lead to increased life satisfaction and improved self esteem. But most importantly having a financial plan in place that aims to help you achieve your goals may provide the peace of mind that you need to feel like you’ve had a life well lived.

If you would like more information about any of the issues in this article, please call Milestone Financial on (02) 6102 4333.