A not-so-secret formula to live happier
Over the past 13 plus years of talking to Australian families about money, there have been three key factors that all of my ‘happiest’ clients have had in common:
Happiness = A Sense of Purpose + Being in Financial Control + Strong Personal Relationships
Everyone always thinks that earning more money will make them happier, but in my experience, the more you earn the more you end up spending. I’ve sat down with a Lawyer who was earning $400,000 a year – and spending $440,000 per year (don’t worry, I sorted that for him quick-smart by chopping up his credit card).
I’ve also sat with a courier who was earning $40,000 a year but saving $4,000. Guess what – the courier was actually happier because he felt he was in financial control and not spending money faster than he was earning it!
Financial security and money may not bring the same kind of instant gratification and happiness as spending money, but research shows that not being in control of your finances (credit card debt!) will make you very unhappy. When someone’s credit card balance goes up their level of self confidence goes down. In fact, financial insecurity produces similar feelings and anxiety to those of physical torture!
A study found that low income earners who rated themselves at least an 8/10 for being in control of their finances were far happier than those people who were earning substantially more, but rated themselves as not in control of their finances – usually spending more than they were earning.
You achieve the freedom of being in financial control the very moment you make the decision to commit to becoming conscious of your spending. When you’re on a CASH DIET (no credit cards) you know exactly how much you are spending and how much you have left to spend for the week. That clarity is financial power, no more drifting along thinking that one day things will be different when you get that next pay-rise or bonus.
Being in control is knowing where you are at financially, you are in control and are ‘aware’ of what you spend your hard earned money on. Having clarity about your cash flow means you are moving forward financially. That is why we measure your surplus cash flow for you!
The financial plan that you are on is realistic and based on hard work, saving and paying down debt. It’s simple and that is why it works.