Financial planning used to be singularly focused on accumulation, but a paradigm shift has now pushed the focus more on intentionality. Money is a tool that can be used to build a life you can enjoy, which means planning for your ideal future.
That's not to say money isn't important. Make no mistake about it, money can make life easier. Constantly fretting about getting basic needs met is exhausting. But true wealth is about more than money and goes far beyond basic needs. It's less about getting "stuff" and more about a life well lived. Money is a tool in the pursuit of that life.
Prioritize time over things
Acquiring stuff can sometimes feel good and can certainly result in a temporary dopamine hit. But research from the University of Texas at Austin indicates that spending on experiences, such as travel, dining or cultural events, yields greater immediate and lasting happiness compared to material purchases, regardless of cost.
Some families are opting for experiences over possessions, less time commuting and more time connecting. That shift can often lead to greater happiness and lower expenses.
Money is limited, but so is time
Essentially, the question becomes, what brings people joy? The research suggests it's experiences, not stuff, that can prompt lasting happiness. Consequently, time becomes a more valuable commodity than money, in that time well spent leads to contentment.
It's a nuanced argument. Research by Killingsworth, Kahneman, and Mellers suggested that for a large percentage of people, happiness increases as income does. While that might be a byproduct of basic needs being met, the research also suggested that, instead of money increasing happiness, it might decrease unhappiness instead.
But chasing money in an effort to find happiness and disregarding the very real joy that can stem from time spent with loved ones is a mistake many people make. Instead, people should strive for balance, using money as a tool to grant them more time for the things they enjoy.
Redefine success as freedom
Whether it's working fewer hours, taking a sabbatical or saying yes to a passion project, the new dream is control over how you spend your days, not how much you can earn. True success simply isn't measured by the amount of money in your bank account. It's measured by how easily you can pursue your passions and make a difference in your community.
While it's true that money can help you achieve a lifestyle that allows you to live with purpose, far too many people have trouble making the shift from acquisition of assets to living the life made possible by those assets. A financial plan that sets the path toward a life of freedom can't be all about numbers; it also must take into consideration each individual's definition of "freedom."
For some, that might look like traveling the globe in luxury. Others might want to stay close to home, supporting their community through intentional philanthropy. Whatever freedom looks like to you, there's a path toward it.
Well-earned freedom doesn't happen accidentally. But it can happen with some careful planning.
It starts with clarity
Reimagining your ideal life begins with asking what really brings joy. If you can see a vision of your ideal life, you can set the goals necessary to obtain it.
Ask yourself this question: "What does a perfect day look like?" Take time to imagine it without putting restrictions on the vision. Focus on the perfect day without any consideration of money sitting in your bank account. Focus on what factors of your imagined perfect day bring you the most joy.
Once you have your vision, ask yourself the next question: "How do I get there?" It's not a question you have to answer alone. Share your vision for an ideal life with your financial adviser. Together, you can create a plan that sets you on the path toward your vision.
Financial plans that align with your answers will always feel more rewarding and more sustainable. Knowing what the goal is, and how to get there, can be incredibly motivating.
Leading with joy
In my practice as a financial adviser, I start conversations with clients by asking them an important question: "What did you do today that brought you joy?" It's a way to quickly learn about what's important in a person's life and, in turn, what our focus should be for them.
Joy should be at the forefront of any discussion about money and the future. Planning for a purposeful future that brings joy is a way to start setting the foundation to reach that ideal future eventually, and live the life you've dreamt of.
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.
