The Financial Wellbeing Book: Creating financial peace of mind

By Chris Budd

One of the biggest enemies of our general wellbeing is stress; and one of the biggest causes of stress is concern about money. This book provides a simple and practical guide to planning your daily and long-term finances by understanding your objectives and motivations. In doing so, it offers respite from the anxiety and stress caused by money problems. The author, an experienced financial adviser, argues that the key to financial wellbeing is to “know thyself” in order to allow decisions to be made, and to ensure those decisions are the rights ones for you. This is underpinned by having control of your daily finances, the ability to cope with a financial shock, to be able to have options in life, to have identifiable goals and a clear path to achieve them, and to ensure clarity and security for those we leave behind

• Language: English
• Publisher: LID Publishing
• Release date: Feb 22, 2024
• ISBN: 9781910649848

Book preview

INTRODUCTION:

HOW THIS BOOK CAN INCREASE WELLBEING

The underlying theme of this book is to encourage you to ignore the advice you find in books. That’s not to say good advice cannot be found in books. But how do you know the advice given is appropriate for you?

KNOW THYSELF

In order to structure your finances in a way that is right for you, it is necessary to first decide what it is you want from your future. That’s actually a lot harder than it may seem. There are many barriers to understanding the life you want; for example, not giving yourself the permission to be happy, facing financial limitations, or being overcommitted to others.

The key to financial wellbeing is not having the life others think you should have, but the life you want.

Now repeat after me:

We are all individual; and

We are all unique.

If you just said those lines out loud, you really need this book! And you are on your way to financial wellbeing.

WELLBEING

The research institute Gallup¹ conducted more than two million interviews with people around the world about wellbeing. Their findings conclude that wellbeing can be split into five components:

• Career wellbeing

• Social wellbeing

• Financial wellbeing

• Physical wellbeing

• Community wellbeing

Although this book is primarily focused on financial wellbeing, it is necessary to take into account how your personalised version of financial wellbeing interacts with the other areas of wellbeing. For example, someone focused entirely on the accumulation of wealth may not have very strong social wellbeing.

FINANCIAL WELLBEING

Financial wellbeing can also be broken down into five elements²:

• A clear path to achieve identifiable objectives;

• Control of daily finances;

• The ability to cope with a financial shock;

• Financial options in life; and

• Clarity and security for those we leave behind.

We will at look each of these elements in turn, underpinned by the importance of know thyself. This will create the space for decisions to be made and will ensure those decisions are the right ones for you.

HOW THE BOOK WORKS

A good financial plan will follow a simple process:

We will consider each of the five elements that contribute to financial wellbeing and then turn these into a financial plan.

More resources are available from the website

www.financialwell-being.co.uk

Sprinkled liberally throughout the book are practical tips to help you manage finances and achieve financial wellbeing for a happier and healthier life. Anecdotes are widely used to illustrate the variouspoints being made. Accordingly, with this first anecdote it is easy to demonstrate why this book is so important.

THE ONE ABOUT THE MUZZY HEAD

Chris had set up his business 12 years previously. Things were going well now, but it had been a hard journey and at times very stressful. Recently Chris had been suffering from what his doctor called a ‘muzzy head’ and was finding it difficult to concentrate.

Chris’s doctor suggested they take some blood tests. When the results came in, the doctor gave the good news. The results had come back all clear. There was nothing wrong. The doctor rose to show Chris out of the door.

Except there was still something wrong. Chris still had the muzzy head. He told his doctor that he had done a bit of his own research that suggested it might be stress or depression. The doctor gave Chris a rather tatty, photocopied piece of paper entitled Depression Questionnaire and told him to come back in two weeks’ time with the completed questionnaire.

When Chris got home, he sat down with the form. The first question was, How many times a week do you feel like killing yourself?

Chris didn’t complete the questionnaire or go back to the doctor. Coincidentally, a friend was training to be a business coach and asked Chris to be a guinea pig for her. The three coaching sessions she gave Chris enabled him to gain clarity and understand what he wanted from his life and his business.

Implementing changes to his business meant Chris gave other members of the team more responsibility. He was then able to focus on doing the things he enjoyed. He made a big decision to take Wednesdays off and use that time to resurrect his dream of writing novels.

A year later, he no longer suffered from the muzzy head feeling. Two years further on, he published his first novel.

This is a true story. I was that Chris.

The first area of financial wellbeing is:

1. A clear path to identifiable objectives

People who have high levels of financial wellbeing tend to have income levels sufficient for their needs. They have a standard of living with which they are satisfied. This is not the same as being wealthy. It is being content with what you have. It is aligning your lifestyle with your finances. It is about having enough for the life you want. Therefore, the first step is to identify our objectives.

DECIDE ON THE DESTINATION]

UNIQUELY YOU

Having picked up this book, you might be wanting to get into the numbers that influence your life financially. You are probably keen to map out your future so that you can start to make decisions and changes in your life for the better. Before we get specific, however, I’d like to encourage you to take the time to think about where you’re headed. In fact, take quite a few moments — because this is actually the most important part of the process.

What you want from your life is unique to you. No one else can answer this question. You should take some time to work out what you want your financial plan to achieve and how it can be used to generate maximum wellbeing.

THE ONE ABOUT CHOOSING BREAD

In my second year at university I shared a house with three others in Levenshulme, Manchester. Like many people sharing for the first time, we idealistically thought we would rotate the cooking and cleaning duties between us.

Off we went to the local supermarket together to do a communal shop. The first section that greeted us was bread. I headed straight to the white, medium-sliced bread. Andy went to the white, thick-sliced bread. Julie went to the granary medium-sliced and Jane to the wholemeal unsliced. We all stood in a row, looking at each other, bewildered, as if to say, "What are you doing? That’s not bread. This is bread."

Needless to say, the produce section (bypassed by me and Andy) and turkey burgers (which Andy bought in bulk) were even more divisive. We quickly realised that no one solution was going to fit all four of us and for the next two years we mostly prepared our own meals.

If you are confident that you know where you want your life to go and have everything sorted, skip to Part 2. But I would suggest that to do so would be like taking a bunch of ingredients and throwing them in a pot without having any idea what it is you are trying to cook.

WHAT DOES YOUR FUTURE LOOK LIKE?

In order to create a plan, you need to know what it is you want to achieve. An old Chinese proverb says, Every long journey starts with a small step. First, however, we must ensure that we are about to start walking in the right direction.

For the individual, this means understanding your own motivations and objectives in life. Only then can you create a financial plan that helps you get there.

For a business owner, this means creating a business plan that gets your business to where you want it to be. You need to know what you want from your business.

For the elderly or someone with a life-threatening illness, this may take the form of getting your affairs in order, making sure that your nearest and dearest are cared for and not left with decisions to make after your passing.

Spend some time deciding on the destination, and consider the motivation behind your choice of goals and objectives to make sure you are aiming for the right ones.

TIP: Write down the numbers one through ten on a piece of paper. Starting with one, write down five things you like to do that make you happy. Next, from numbers six to ten, write down anything that you would like to do but currently don’t do, for whatever reason. There is no limit, but four