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Are money and happiness related?

There’s a commonly accepted saying, “money can’t buy happiness,” but is it true? Perhaps money on its own does not bring happiness, but money and happiness may be more closely related than you think.

This begs the question, however, what is happiness? The answer is likely to be different depending on you who you ask. If you were to ask 100 people, you’d probably get 100 different answers.

While specific answers will differ, common themes are sure to surface. Many psychologists cite that happiness has 3 main components: emotional well-being, the ability to meet one’s needs, and an overall satisfaction with one’s life. And as it turns out, your relationship with money can impact these areas as well.

Financial Stress

Looking back over the past 2 years, it could be safe to say that emotional well-being has been at an overwhelming low. Financial stress is a major contributing factor. Even prior to the global pandemic, many of Americans experienced some level of financial anxiety. Those affected most severely usually attribute their stress to low financial literacy.

From repressed income to mounting debt, many individuals are facing extremely difficult financial hardships as well as competing, and often conflicting, financial goals. Should you pay off student loans now or save for retirement? Should you start saving for a child’s education or pay off the mortgage first? The real stress often arises from a surprisingly simple place - perhaps you don’t know what to do - and because of this, do nothing at all.

One of the key roles, and perhaps the most important role, of a SRP WELLth advisor is to provide financial education to our clients. By talking through your financial fears and stressors, we are not only able to gain a deeper understanding of your situation, but also provide education and often actionable steps towards alleviating your financial stress through a comprehensive plan.

Financial Beliefs

As you work with your advisor, it’s important to uncover why certain aspects of your financial life may be causing you undue stress. Whether we know it or not, each one of us hold very particular beliefs about money and wealth in general, and those beliefs can impact our financial behaviors.

Often, these beliefs about money are rooted in our childhood. When working with clients many financial advisors may ask about your first memory or experience with money. Did you grow up in a family that came from money or did your family have trouble scraping by? Did you have an allowance growing up? Did you watch your parents struggle with money? Did your parents talk to you about money at all? All of these experiences shape who we become as adults and how we go on to manage our own finances.

Understanding your history with finances can be an incredibly illuminating experience, and it helps both you and your SRP WELLth advisor in understanding your history with money and how those beliefs and experiences are impacting you today.

The Value of a Financial Planner

The relationship between finances and happiness does not necessarily correlate with how much money you have, but rather how you manage the money you have. Research has shown that even for those at the top percentages of wealth in the US, working with a financial advisor may make a difference between respondents reporting happiness with their finances or their finances overwhelming them.

Working with a financial advisor has may help to increase happiness, not only because advisors work to mitigate your financial stress and provide insight into an often complicated and jargon-filled space, but they are also adept at helping clients with open communication with their partners. Advisors serve as a mediator during conversations about financial matters between couples and can help them agree and integrate a financial plan of action.

Financial Advisors are also your accountability partners. An advisor could provide all the advice in the world, but advice without action will not provide much value. SRP WELLth advisors provide guidance and friendly nudges at times to help you pursue your goals.

At the end of the day, what’s the value of a financial advisor? They strive to make you happier.

Interested in learning more? Schedule a consultation with a WELLth Advisor today!


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Wealth management (i.e. WELLth) services are provided separately from retirement plan consulting services you may receive from SRP as a result of participation in your employer’s retirement plan. They may involve an advisory agreement and/or an additional fee.