How To Reassess Your Finances To Align Your Money With What Makes You Happy

David Coles is a Wealth Advisor, the Chief Operations Officer, and the Co-Creator of the Human Wealth Planning Process at WMBC.

Individuals in a wide variety of financial positions have had to make strategic monetary decisions to mitigate loss and to amplify the possibility of financial gains during the Covid-19 pandemic. For many people, reassessing various areas of their daily life has been a critical component of repositioning based on the current global climate. How they spend their discretionary income, how they approach savings and the way in which they invest have all been areas of serious consideration.

When you’re reassessing your finances and updating your financial plan, it’s vital to consider the role money plays in your life and how it relates to your overall happiness. Each person’s relationship with their financial health is deeply intimate. Therefore, you’ll want to take a personalized approach to developing your financial plan that centers on your unique needs and allows you to live your best life now.

Investigating what makes you feel happy and fulfilled is key to that process, which is why I like using our company’s framework outlined below. Consider taking these steps as you create or update your financial plan:

1. Discover well-being. Consider the aspects of yourself that are most important to you, such as autonomy, vitality, social support, connecting to your community, etc. By identifying these elements, you will be able to see which areas you choose to invest in financially, or with your time, yield a sense of fulfillment for you.

2. Explore resources. Look at the financial, personal and social resources you have available to you, and review how they are being used. For example, when considering your financial resources, examine your cash flow (savings versus spending), and figure out what you are spending money on. Do you own a large house that is not needed? Do you eat out a lot? Maybe you want greater relationships with your family members. If so, you could consider whether getting a smaller house, or if eating out less could help you create vacations or experiences with the family.

On a personal level, do you feel your vitality is low? Is this because you have bad eating habits or are not exercising? Should you stop eating out as much or stop getting coffee and spend that money on a gym membership, a trainer or a healthy meal service?

When you consider your social resources, maybe you want to provide a better life or future for the people you love. If so, you could open a college savings account for your children or grandchildren and begin funding it.

Do your resources support the things that are most important to you? If not, where can you make adjustments? This step is key to realigning your resources with the areas you find fulfillment in.

3. Create systems. Using the information from steps one and two, create financial systems that build harmony in your life and allow you to feel well. This could include adjusting your budget to spend less on clothes and more on experiences with those you care about, or buying a less expensive home to give you the freedom you desire. Or, maybe it means choosing to redistribute monetary contributions to charitable organizations you feel are committed to ways of making real impact that resonate with you.

4. Implement and review. Create a timeline and goals for how to implement your financial systems. Then on at least an annual basis, return to this and reassess what adjustments should be made. In our current state, with the global community being unusually turbulent, you may want to begin by revisiting this process every 90 days or so to start.

Life is constantly in flux, so it is important to go through this type of process annually to ensure your monetary means are working for you and the systems in place support a healthy relationship with your finances. There is a saying that rings true: “We should work to live not live to work.” As the world evolves post-pandemic and people rethink the way they live, work and play, I believe many of us will change the way we interact with our finances. If utilized properly, they can provide freedom to enjoy life, rather than being a cage we are confined within.

The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation. 


Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?