Life is full of decisions that require us to balance our priorities and responsibilities. As you probably know if you are reading this, our Work-Life group helps people balance their work and personal responsibilities. Often the choices we make between these responsibilities, work and personal, are fraught with stress because they all involve a precious and limited resource: our time. I think we can all agree that time is our most precious commodity. We all have less of it today than we did yesterday. As far as important resources are concerned, money is probably a close second, not because it is valuable on its own, but because of what money enables us to do or buy. For most of us, unless your last name is Buffett or Gates, the money we have is also limited. This makes decisions about money stressful as well. As the Financial Well-Being Officer at UK, I speak with many employees, one-on-one and in groups, about money and their financial well-being.
Financial well-being: "A state of being wherein a person can fully meet current and ongoing financial obligations, can feel secure in their financial future, and is able to make choices that allow enjoyment of life."
The definition we use for financial well-being is:"A state of being wherein a person can fully meet current and ongoing financial obligations, can feel secure in their financial future, and is able to make choices that allow enjoyment of life." Notice that it says and, not or. My conversations with employees would certainly be shorter, and less stressful, if I required employees to focus only on the future and save all of their money, only spending money on the essentials. Spending all of their money now and not saving anything to use in the future, would also be easier than striking a balance. We can all see the risks associated with either of these approaches; both require we make assumptions about our future. By starting to find a balance between our present and future priorities, we introduce a full range of choices in between the two extremes. What we need is a plan that will strike a balance between security and freedom, both now and in the future.
Ask yourself the question, "Why is money important to me?"
The first step in balancing security and freedom is to take some time to clearly define our priorities. Ask yourself the question, "Why is money important to me?" If you can get to the bottom of this question you will probably uncover a deeply personal core value, or two. These values are often the result of our life experiences with money, perhaps as far back as when we were children and we were only observing the money habits of our parents. If our spending habits are not aligned with our values, it creates a tension that makes most people very uncomfortable. By identifying these values at the outset, we can use them to evaluate the myriad of decisions we make every day about how to spend our money. Financial stress is relieved by being intentional with our money and making sure that we are spending our money on what is most important to us.
On May 19th I will be presenting at the Elder Care Lunch & Learn. We will look at several decisions that we often need to make about money as we grow older, including structured savings to money under the mattress; financing in-home care vs. assisted living; private pay vs. government entitlement. If you are planning to attend, I encourage you to ask yourself the question I posed earlier, "Why is money important to me?"
Todd Macaulay is the UK Financial Well-Being Officer and enjoys helping employees take control of their financial situations and reach their financial goals. He is a Certified Financial Planner and an Accredited Investment Fiduciary. He can be contacted at (859) 218-1589 or email@example.com