There’s a clear difference between financial wellbeing and wealth. My experience and knowledge tells me that it’s certainly possible to be relatively wealthy (or have a high income) and have poor financial wellbeing. More money doesn’t necessarily equate to a better relationship with money…but the good news is that there are a number of techniques worth considering to reframe your thoughts about money to, over the longer term, have a better relationship with money. In this article I’ll be sharing three…
1) Don’t compare
Theodore Roosavelt was correct when he said “Comparison is the thief of Joy”. If we’re considering our financial situation relative to what we perceive others have it creates an unhealthy relationship with our money. Effectively money is a tool to help us achieve our goals and support our families. As long as we’re doing this in a way which reflects our values and allows us to live a life we’re going to enjoy, it doesn’t matter what others are doing.
This tip is simple but isn’t always easy. Humans are social animals and comparison is part of what we do. However the more you avoid comparison and focus on how much is enough for you to achieve your goals (instead of what your neighbour, friend or work colleague is up to financially) you’ll see an immediate improvement in your relationship with money.
2) Find balance
Financial wellbeing is important. We all want to be financially secure and know that we’ve got enough to be financially secure in the future. However our own wellbeing is not only reliant on where we are financially. I recently read a great book called Wellbeing (the 5 essential elements) by Dan Rath and Jim Harter. In the book wellbeing is described as being in 5 component parts which include financial but also include Career, Community, Social and Physical.
Financial wellbeing is about putting our financial affairs into perspective and seeing where it fits in our overall life. An obsession with financial security, or the inverse, pretending that financial security doesn’t matter doesn’t do our overall wellbeing any favours. It’s all about balancing your financial wellbeing with the other aspects of wellbeing and trying to maintain an appropriate balance in our lives.
3) Seek clarity
One important thing we do with our clients at Cervello is help them get clear on where they are financially. This means understanding what their financial goals are, understanding where they are today and working out the action we need to take to help them ‘fill the gap’. I often find that individuals who are in relatively decent financial positions have worried about money for a long time but have not taken the action they need to completely understand where they are financially.
One clear way of improving your financial wellbeing is understanding where you are financially and what it means in relation to acheiving your longer term financial goals. Clarity of where you are financially regardless of whether it’s good, bad or somewhere inbetween, allows you to take control and take action. Feeling in control will improve your financial wellbeing and put you on the journey towards whatever financial independence looks like for you.
I hope these tips were useful and feel free to get in touch if you’d like us to help support your financial wellbeing in any way.