The joy of financial wellbeing


Taking control of your personal finances revolves as much around pleasure as it does purpose, writes Chris Budd

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Everyone has a financial strategy of sorts. For some, it is a detailed plan with a clear path to identifiable objectives. For others it is an exercise in deliberate ignorance – never looking at their bank statement or thinking about their future. Whatever the strategy, every manager, leader and professional has a relationship with money.

Whether we like it or not, the future will happen. And since it’s impossible to avoid money and the future, why not engage with them both? If you are going to think about a financial plan, I suggest you do so in a way that makes you happier.

The simple financial plan

Creating a financial plan to maximize wellbeing is, in theory, very simple.

Step one 

Work out what you want from life

Step two 

Spend your money on that

That it is it.

Of course, understanding what you want from life is easier said than done. It’s difficult to be truly open-minded about the future when you don’t know what you will be able to afford. This makes it hard to know where to start.

A sense of purpose

Studies show that happiness can result when the things we do have a balance between pleasure and having a sense of purpose. The ratio will be different for each of us, however too much of one and not enough of the other is a barrier to wellbeing.

Here’s an exercise to try (see graphic, right). List the numbers one to ten. Now write down four things that you actively do that you enjoy.

Next, write down three things you do sometimes that you’d like to do more of.

Finally, write three things you would like to do that you don’t do at the moment.

Note that you are not looking for ‘bucket list’ type one-off events, but things in your life that give you ongoing wellbeing. When I conducted this exercise seven years ago, my goals included writing novels and seeing more music concerts. I’ve achieved the first but not the second so far…

Now, let’s analyse that list.

Identifiable objectives

Firstly, is there a reasonable balance of pleasure and a sense of purpose? They are unlikely to be equal – everyone will be different – but both should be present. What matters is having the right balance for you.

Next, mark each goal out of ten as to how much time you currently allocate them. Your next challenge could then be to create a more even balance of time across these different areas.

What action will you take to create a balanced list? And how will this impact on your finances, both now and in the future?

Now you have the start of a financial plan.

The pleasure principle

Spending money on things that give pleasure is one way to create happiness. However, understanding what gives you pleasure, and in particular how long that pleasure lasts, can increase overall wellbeing.

Retail therapy, for example, suggests that buying stuff gives us pleasure. While this is certainly true, the wellbeing from owning something tends to last a finite amount of time.

Once you have worn it, read it, eaten it, looked at it or listened to it, the wellbeing reduces quickly. We fail to notice the painting on the wall. The shoes get put with all the others. The book is returned to the shelf. And if the purchase has been funded from debt, retail therapy can even have a negative effect on our long-term wellbeing.

Spending that money on experiences instead, however, creates memories – which endure much longer. So instead of buying something you don’t actually need, spend that money on a weekend away visiting friends you haven’t seen for a long time – it will give a considerably greater increase in wellbeing.

A third way of spending that money could be by bringing your preferred future closer. Once you have identified those objectives – and have a balance between purpose and pleasure – setting money aside to make your preferred future achievable will become more attractive.

How much is enough?

Once you have finalized your list and can recognize which areas you need to focus on – and have greater clarity over how you spend your money – you will have a basic financial plan.

The question your financial plan is attempting to answer is this: how much is enough? How much do you need in order to achieve your ideal balance of pleasure and
sense of purpose?

Spending time thinking about money and the future might involve reviewing how you spend your income, or understanding how much you need to have squirrelled away. The clarity that this process provides will in itself give you considerable long-term wellbeing.


Chris Budd is managing director of Ovation Finance, a financial planning practice. He is author of The Financial Wellbeing Book and two novels, including his latest book Manners From Heaven