An important part of financial wellbeing is finding the balance between striving for more and feeling content that what you already have is enough
The most basic reason that any of us earn an income is so that we have the means to pay for things. That money enables us to provide for ourselves and our families.
The modern world is also geared towards consumption. It is what sustains most developed economies.
According to CEIC Data, private consumption accounts for nearly two-thirds of the UK’s GDP. In the US, it is slightly more than that.
However, it’s difficult to always know how much of this consumption is positive. The ubiquity of advertisements, social media influencers, and societal expectations means that we are constantly encouraged to seek bigger, better, and more extravagant things. As a result, it can be challenging to strike a balance between wanting more and finding contentment with what we have. This has implications for our financial wellbeing.
The push for more
A desire to grow your wealth and your purchasing power is understandable. Striving for more can also be motivating. It pushes us to be ambitious, work hard, and pursue opportunities for financial growth. It can drive us to new levels of success.
However, it's important to assess whether this pursuit aligns with our values and long-term financial health. That is because being content with enough is essential for financial stability and overall happiness.
If we are constantly chasing elusive aspirations, we are unlikely to recognise and appreciate what we already have. A sense of contentment, on the other hand, allows us to live within our means, reduce financial stress, and focus on the aspects of life that bring true fulfilment beyond material possessions.
How then can we strike a balance between pushing for more and being content with enough?
Here are some practical steps to consider.
Start with your values
Reflect on what truly matters to you in life. Identifying your core values and aligning your financial goals to those principles will help you focus on what brings genuine satisfaction and fulfilment.
For example, if family is your top priority, focus your spending on quality time and experiences with your loved ones. Set aside a portion of your budget for activities like holidays and regular family outings.
If you value personal growth, invest in your own development and education. Set aside funds for courses, workshops, or conferences that enhance your skills and knowledge.
Remember, time is short. You need to make the most of every day.
Focus on meaningful goals
Once you’ve established your values, align your financial goals to those. The more meaningful these are to you, the more likely you are to stick to them.
If you value financial security, set a goal of building an emergency fund to provide a safety net for unexpected expenses. You could also have a goal of building a retirement fund that will give you peace of mind in the long run.
For someone who values widening their worldview, set goals of saving for holidays to interesting places. This alignment will not only motivate you, but also improve your relationship with money as you appreciate it as something that serves you in enabling the life you want.
Be grateful
It is not simply esoteric, wishful thinking to believe that cultivating a mindset of gratitude for what you already have is good for you. Extensive academic research has been conducted into the benefits of gratitude, and the findings are conclusive.
A 2018 white paper from the Greater Good Science Center at UC Berkeley noted: “Many studies have examined possible connections between gratitude and various elements of psychological well-being. In general, more grateful people are happier, more satisfied with their lives, less materialistic, and less likely to suffer from burnout.”
Taking time to appreciate the things that bring joy and fulfilment to your life, whether they are simple pleasures, meaningful relationships, or personal achievements, improves your outlook on life. Gratitude helps shift the focus away from what you don’t have, to what you do have, which cultivates contentment.
Separate needs from wants
We face no shortage of encouragement to spend more. We are all constantly being influenced by so much around us, that we don’t always appreciate what is really motivating us to act.
Research has found that we are 71% more likely to make a purchase if we are referred by social media. Very often this is due to influencers encouraging us to want something, even though we have no real need for it.
This is why mindful spending has become a popular idea. Before making a purchase, ask yourself if it aligns with your values and long-term financial goals. Consider the impact of a purchase on your overall financial well-being. Do you see yourself still using it a year from now, and what will it have added to your life?
Pausing to ask yourself these questions can have a big impact on your spending, and contribute significantly to your financial wellbeing.
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