As financial planners, it might be tempting for you to believe that we think so.
After all, why would we spend all day advising clients on pensions, tax and investments if we did not think to have more money would make you happier?
At Weston Murray & Moore our slogan is: “You have one life, let us help you live it.” So clearly, we believe money has an important role to play in making our clients happier.
However, we also believe that things are more nuanced than the simple equation:
Having more money = a happier person.
Really, we think that sensible money management is an important means to an end. That is, it helps you to achieve the goals in life that are truly important to you.
Let’s unpack the relationship between money and happiness a bit more…
Does having no money equal no happiness?
We all hear stories of terrible poverty in the world. Many people still live on under a dollar a day, for example, and struggle to feed their families. If a medical emergency comes their way, moreover, it can completely wipe them out financially.
Clearly, a base level of money is needed for humans to at least tolerate their existence – paying for essential food, shelter and other vital goods. Few people, we think, would dispute that.
Yet when you look at people on the lower income scales in society, there is usually a mixture of happiness levels across the picture.
For instance, some families have very little in the way of material goods but at the same time, they experience a lot of joy. Perhaps they have lots of children living in a small house, and they struggle to afford food and clothing. Yet in the midst of this, there is lots of fun and laughter. They do not seem too upset that they cannot afford a more lavish lifestyle.
Yet for other lower-income people, their existence is miserable and full of unhappiness. Perhaps they are saddled with crippling debt which they feel unable to escape from, creating a deep sense of entrapment. Maybe a family would like to move out of a high-crime area into a safer one, for instance, but they cannot afford to do so.
Does having more money mean more happiness?
On the other side of the coin (i.e. the wealthiest members of society) the situation seems to be similarly reflected. There are many wealthy people who are perfectly content. They enjoy the finer foods and also the most incredible holiday experiences. They live comfortably in large homes.
With such immense financial resources, how could these people not be happy?
Yet we all know of wealthy people who are deeply miserable! Perhaps they have multiple homes and expensive cars, yet their debts are hanging over them like a dark cloud, threatening to derail them at any moment. Maybe they worry about their precarious financial position due to market threats to their business, which ultimately supports their lifestyle.
Where financial planning fits into the picture
We deal with a wide range of financial matters and clients, and know all too well how complicated the relationship is between money and happiness.
If you are looking for the definitive answer on how people can address all of their inner angst about money, we, unfortunately, cannot provide it here.
Yet we can offer an important piece to start fixing the puzzle – and that’s through meaningful, effective financial planning.
Really, a financial plan starts with asking yourself what is ultimately important to you:
Is your deep desire to one day sell your business and retire early to enjoy a long-time hobby?
Is it to travel the world with your wife of thirty years?
Is it to leave a meaningful inheritance to your grandchildren, giving them the better start in life you wish you could have had?
Once you know the answers to these questions (what really matters to you and will make you happy), then you can then start planning towards making these goals a reality.
Simply having a financial plan can go a long way towards making you happier. Speaking from experience with our own clients, knowing that you are steadily moving towards your goals usually brings a huge sense of satisfaction, purpose and peace of mind.
Sitting down with an experienced financial planner can be immensely valuable when thinking about putting your plan together.
It might be, for instance, that some of your goals are not actually possible in light of your current financial situation. This can be difficult to come to terms with, but it is better to deal with that now and revise your expectations rather than hitting a shocking dead end in years down the road.
In many other cases, however, it is often the case that you can achieve much more than you thought previously was possible. Perhaps we could show you a planning opportunity which means you could actually retire earlier than you thought, for instance.
Or, maybe you find out (through estate planning) that you could leave much more to your grandchildren as an inheritance (tax-free) than you previously believed would be possible.
How could we round up everything we have talked about above?
In short, we believe that a key part to a happy life is having a clear set of meaningful goals in front of you, and putting a financial plan in place to move towards them.
Quite often, the key to happiness when it comes to money isn’t about having more or less of it. It’s about managing it well and committing it towards the things that matter.
If you would like to start talking to us about how to start putting a financial plan like this together, then we invite you to get in touch. We’d love to talk more with you through a free, no-commitment financial consultation.
Get in touch today!