‘Hap­pi­ness’ plan to ad­dress needs

The Weekly Advertiser Horsham - - News -

Does money bring hap­pi­ness? The short an­swer is ‘yes’, but only up to a point. Peo­ple in richer coun­tries are, col­lec­tively, hap­pier than peo­ple in poor coun­tries.

Within coun­tries, peo­ple with higher in­comes are gen­er­ally hap­pier than peo­ple on low in­comes.

Sur­pris­ingly, as soon as ba­sic liv­ing needs are met, the amount of hap­pi­ness gained from each ad­di­tional dol­lar of in­come rapidly de­clines.

What is hap­pi­ness?

What is it about money that con­trib­utes to hap­pi­ness? And what does hap­pi­ness even mean?

Per­haps what peo­ple are re­ally ex­press­ing is con­tent­ment or sat­is­fac­tion with their lives.

Rather than putting us into a per­pet­ual state of bliss, money is more likely to con­trib­ute to a sense of se­cu­rity, bet­ter health, less stress and, per­haps above all, choice.

It’s in­ter­est­ing to see what choices boost hap­pi­ness. For ex­am­ple, in some­thing of a para­dox, giv­ing money away makes peo­ple feel hap­pier than spend­ing it on them­selves.

And ex­pe­ri­ences such as travel or sky­div­ing, or even just go­ing to a movie, pro­vide more en­dur­ing sat­is­fac­tion than ma­te­rial pur­chases. Good mem­o­ries, it seems, pro­vide bet­ter value than phys­i­cal pos­ses­sions.

Fi­nan­cial plan­ning

What does this have to do with fi­nan­cial plan­ning? Well, for many peo­ple, their fi­nan­cial plan is all about mile­stones: buy­ing a house, meet­ing school fees and fund­ing re­tire­ment. Im­por­tant as th­ese things might be, what’s miss­ing is the jour­ney – and no, that doesn’t mean the in­sur­ance pre­mi­ums, su­per con­tri­bu­tions and mort­gage re­pay­ments.

It means San­torini sun­sets, sand be­tween the toes and, per­haps more im­por­tant than any­thing, time spent with fam­ily and friends.

On that ba­sis, in­stead of fi­nan­cial plan­ning maybe we should call it hap­pi­ness plan­ning?

Of course your plan will have a fi­nan­cial com­po­nent, but it will be fo­cused on the jour­ney of life, rather than fi­nan­cial destinations; on achiev­ing a bal­ance and know­ing what’s ‘enough’. It will be more about ex­pe­ri­ences, bucket lists and re­la­tion­ships than an­nu­ities, tax re­funds and su­per­an­nu­a­tion.

Per­spec­tive

Yes, money is im­por­tant in pro­vid­ing choices and ex­pe­ri­ences, and that’s prob­a­bly a ma­jor rea­son why richer peo­ple re­port higher lev­els of hap­pi­ness.

And yes, your fi­nan­cial plan­ner is go­ing to mainly fo­cus on su­per and in­vest­ments and in­sur­ance as the means of open­ing up more op­tions for you. Just don’t let that be­come the be all and end all.

More peo­ple are hap­pily re­ject­ing the idea of a con­ven­tional re­tire­ment. Tech­nol­ogy is help­ing to blur the lines be­tween work and play, and Mil­len­ni­als are opt­ing to pur­sue ex­pe­ri­ences now with the ex­pec­ta­tion that they will work in some form well be­yond to­day’s typ­i­cal re­tire­ment age.

So ask your­self: what makes you happy? What sort of choices do you want to be able to make? Then share the answers with your fi­nan­cial plan­ner, and ask for a plan that will not only meet your long-term needs but also al­low you to in­dulge your shorter-term whims and de­sires.

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