BrilliantWithMoney

Editors note: This is a guest post from Kim Stephenson, the only Occupational Psychologist in the world who is also qualified as a financial advisor. Photo credit: Joe Shlabotnik.

Money is supposed to be a tool to help you be happy.

Sometimes we think, “if only I had X I’d be happy”, but when we get X, we think “if only I had X plus Y, I’d be happy”. And so on.

Without getting technical, we’re not happy because:

-We confuse our values, motivations, wants and goals, which are all linked but are all different,

-We don’t understand whose finger is on our “want” buttons”.

-Those buttons get pressed and we lose control of our happiness.

This article is about a way that you can get your finger on your own buttons!

Nearly all of us want more things than we can afford. If we buy the bigger house, we can’t also have the yacht. We have to make choices between what we want enough to use our limited resources buying and what we might like, but isn’t worth sacrificing something else to have.

We can buy more than we can really afford on credit, but we still can’t have everything. So, which option makes more sense to you:

1. Decide what you really want, buy it, then see how much is left and maybe buy things that you want less?

2. Buy whatever you fancy buying, what a magazine says you ought to buy, what your friends have etc. irrespective of whether you want those things the most and whether, in fact you want them at all?

Bearing in mind that you almost certainly have to stop buying at some point, you probably think that the first one is sensible, but possibly do the second!

The exercise

Imagine that you’ve got £25 million, what are you going to spend it on?

You might buy a house and a plane or go on a trip around the world, whatever you like. Make a note of the first 15 things.

Try to make it fairly detailed; if you want a house, what sort, how big, what would it have in the way of facilities? If you’d invest the money, what would you want as income from it and why? If you would quit your job, what would you want to do with your time?

Partly, it is fun to have a dream about what you’d do. Partly, you start to use your imagination and create a vision of what really motivates you. A more important aspect of the exercise is that you think about what you would like to spend time doing and what you value. But the real benefit of this exercise is that you can look at that list and see where the things on it have come from.

For example, if you want a 25 bedroom house with 15 acres of grounds, a swimming pool, stables etc., why?

Do you dream of having a huge family and keeping horses? What often happens is that people say they would have a huge house in which they would rattle around and end up living in one wing, they would have holiday homes in places that they would visit twice and get bored, want horses they wouldn’t ride and planes they would be scared of flying.

Look again at your list, and work out where the ideas for those things came from. Are they things you want for yourself, or has someone or something pushed your buttons for you?

Once you’ve done that, reflect:

Do multi-millionaires (like you) have to have a house to rival the Beckhams? Do you want a Ferrari because the annoying bloke at the gym has Porsche? There is an American definition of wealth that says you are rich if you earn $100 a year more than your wife’s, sister’s husband! Are most of the things on the list to compete with your brother-in-law?

Count up the things that come from media hype. Compare that to the wants that come from competing with friends and family, the stuff that “experts” have told you that you ought to want, the ones you’ve been sold, the ones that your children want. Then add up the ones that really fit your vision, that you would really like to have for yourself.

If you are like most people I coach, you’ll have only two or three that are really come from you. The others are to prove something to parents, siblings, friends, the bloke at the golf club or your children’s friends’ parents – or to have what Hello magazine or a TV programme tells you that you should want.

Reality check

This doesn’t mean that you mustn’t have big financial goals or think about making money. The point is that if you are going into debt to buy a Bentley because your favourite footballer has one or because you think society expects you to have one, I’d say that was perhaps not the wisest use of your money. If you’ve always wanted a Bentley, that is your dream and you plan how to afford it without giving up things you truly want even more (like time and money for family holidays), that’s fine.

At the other end of the money scale, if you think your perfect life would involve a smallholding and escaping the rat-race have a good think about it. There’s an established motivational theory that distinguishes “motivating factors”, where getting more drives you on, from “hygiene factors”, where having more doesn’t motivate, but not having can de-motivate. Generally, money is a hygiene factor. So having too little money is often a stressor.

So be practical, trying “the Good Life” or becoming a Buddhist monk is very rarely a realistic option. Think carefully about what you’d be giving up to have it in the same way as you would with any purchase.

Practicalities

You can do the exercise on your own (which saves any embarrassment!). Alternatively, it is interesting to do with your partner or a trusted friend, you can get a lot of insight into the factors that influence you both. You can also go through it with a trusted professional (it was developed for my coaching clients) like your independent financial adviser.

A caution though. The main function of the exercise is “guided self-insight”. The key word is self. You want a coach or friend who will help you reflect on your motives, desires etc. Their role is to hold a mirror up for you and for that they generally need to focus on you and be quiet. However well-meaning they are, I’d suggest not sharing your “first fifteen” with anybody whose main qualifications are that they keen to “help you with your issues” and who thinks they are “good with people”, or once read a book about coaching!

You can do it for yourself perfectly well, it is a simple tool to use to help you reflect on your own motivations, desires etc. You don’t need, or want, somebody trying to psycho-analyse you, finding hidden meanings in your statements or telling you what your values are and whether they are right or not!

And finally

Try the exercise. It’s fun, simple and neither fattening nor addictive. It also helps you to think about what your priorities are and most importantly, who has their finger on your buttons.

Kim Stephenson is the only Occupational Psychologist in the world who is also qualified as a financial advisor, as well as being a qualified coach and member of the BPS Special Group in Coaching Psychology. His corporate website (www.stephenson-consulting.co.uk) has more about his Occupational Psychology services and there’s more about his individual work on his LinkedIn profile http://uk.linkedin.com/in/kimstephenson.