One clear benefit of living in Santa Fe is the attention paid to wellness. We’re attuned to the positive effects of practices such as yoga, pilates, meditation, aromatherapy and plain old diet and exercise.
The World Health Organization defines wellness as “a state of complete physical, mental and social well-being, and not merely the absence of disease or infirmity.”
Our finances are also integral to wellness. Money is a representation of life energy, whether derived from your own efforts or those of a deceased relative who was fortunate enough to pass along a legacy.
When you are worried about money, it affects your overall well-being. In a 2015 survey, SunTrust Bank asked Americans to name the top factors putting stress on their personal relationships. The No. 1 answer? Money problems.
It’s easy to brush off thoughts of money by spouting platitudes like, “Love is free” and, “Money doesn’t buy happiness.” Sure, we all know of filthy rich people who are miserable. But isn’t it also true that lack of a solid financial plan for your golden years is stressful? You don’t have to be a billionaire — even a millionaire — to live a satisfying, peaceful life well into your 80s or even 90s, while making a positive contribution to your family, your community and the world.
So what are some ways to address your own concerns about financial wellness?
What are the three biggest problems impeding your financial well-being?
I understand the desire to avoid addressing financial concerns. It’s similar to avoiding that nagging toothache, hoping it goes away.
Let’s use dental care as an example. We know that a cavity won’t disappear on its own, and neither will your money worries. It’s best to address them head-on. Are you concerned about having enough money to last through retirement? Maybe you want to retire soon but you have a big mortgage payment. Maybe you’re worried about investing because you fear the next big market crash. Some of those factors are within your control, others are not — but they can all be addressed methodically.
What steps have you taken to address these challenges?
Maybe you’re educating yourself about markets, taxes, insurance or any other technical subjects that may be hurdles to wellness. Do you have unresolved blocks about your relationship with money? Do you monitor your spending periodically, to be sure it’s in line with your income? Are there income-generating opportunities that appeal to you?
Often, a part-time job or consulting gig brings in some much-needed revenue, while keeping people actively engaged with their community. Don’t overlook the value of getting some advice, whether from a financial coach, accountant, financial planner or investment adviser. Sometimes an objective viewpoint helps, along with an expert opinion on a potentially complex situation.
Have you envisioned your future self?
Admittedly, this is a tough one. Numerous studies have shown how difficult it is to imagine some other person — with our same name and same basic traits — but several years older. In a 2011 paper, “Future self-continuity: How conceptions of the future self transform intertemporal choice,” University of California, Los Angeles researcher Hal Hershfield found that people feel more connected to their potential self five years from now, versus their potential self four decades from now. We’re more wired for shorter-term thinking, which influences our decisions about money (among other things).
I’ve written many times in The New Mexican about increasing longevity. I won’t rehash the data here, but suffice to say: It may be somewhat unpleasant to ponder, but if you are in your 50s, 60s, 70s and even 80s, your long-term financial well-being depends upon envisioning yourself at least a couple decades from now. Do you really want to risk running out of money in retirement, and having to depend on family or the social-services net?
What’s your gauge for financial peace of mind?
This can be tricky, because it forces you to consider concrete elements of financial and life planning. On a scale of one through 10, rate your own level of comfort and security when it comes to your investments, cash flow and taxes.
Most people underestimate long-term effects of factors such as longevity and inflation, as well as the amount of money they will really need. Forget that old saw about expenses decreasing in retirement; it’s generally not true. Also forget the equally incorrect notion that taxes always decrease. Once you take Social Security, along with required distributions from retirement accounts and other sources, like pensions, you may find yourself in a higher tax bracket than you anticipated.
Wellness really is about feeling good. It’s about feeling secure, calm and confident. But achieving that alignment also means taking some action. Don’t try to “wing it.” Your future self will thank you.