In the wake of the coronavirus pandemic, just about everyone has had to make adjustments to their long-term personal financial plans. Since you are likely to be in a position right now to reevaluate your financial plan, the experts suggest you focus on financial planning for your happiness.
While it is said that “money can’t buy happiness,” it is vital to consider the role money plays in your life. Think about how it relates to your overall happiness and emotional well-being.
According to wealth advisor David Coles, “Each person’s relationship with their financial health is deeply intimate. Therefore, you’ll want to take a personalized approach to developing your financial plan that centers on your unique needs and allows you to live your best life now.”
Coles suggests that you take these steps at any time to create or modify your personal financial plan.
1. Discover well-being
Consider what is most important to you, such as autonomy, vitality, social support, connecting to your community, etc. By identifying these elements, you will be able to see which areas you choose to invest in will provide the greatest sense of fulfillment and personal satisfaction.
2. Explore your resources
Look at the financial, personal, and social resources you have available to you. Review how they are being used. For example, when considering your financial resources, examine your cash flow (savings versus spending) and figure out what you are spending money on. Do you own a large house that is not necessary? Do you eat out a lot? Maybe you want greater relationships with your family members. If so, you could consider whether getting a smaller house or eating out less could help you take more vacations with the family.
When you consider your social resources, maybe you want to provide a better future for the people you love. If so, you could open a college savings account for your children or grandchildren. Do you need to spend more money on personal growth and improving your health? You could join a gym or take some classes.
The point is, are you spending money to use your resources as wisely as possible to bring you happiness?
3. Create systems
Using the information from steps one and two, create financial systems that build harmony in your life. This could include adjusting your budget to spend less on clothes and more on experiences with loved ones. Maybe it means buying a less expensive home to give you the freedom you desire. It could also mean choosing to donate to charitable organizations that truly resonate with you.
4. Implement and review
Create a timeline and goals for how to implement your financial systems. Then, on at least an annual basis, return to this and reassess what adjustments should be made. In our current state, with the global community being unusually turbulent, you may want to begin by revisiting this process every 90 days or so.
The pandemic has forced all of us to reevaluate our relationship not only with money, but also with what is most important in our lives. Now is the perfect time to focus on financial planning for your happiness, so that your money is working for YOU, instead of you just working for your money.
What do you think of these ways to manage money to make you happier? Please reply using the comments below.