Research about retirement by financial planners have identified variables that can improve retirement outcomes. Moreover there were biological gender differences between with satisfaction in retirement.
Retirement can be a difficult consideration when a person is young as it requires delayed gratification and long term planning. Having someone help you with thinking about the plan and its benefits can increase motivation. It may also take creative thoughts around investments to consider how to save for retirement and how much money you will need. Everyone is different. Additionally there are different views about retirement. Some prefer to reduce work, some may decide to pursue their passion, others may choose volunteer work they always wanted to do and then there is the caring role or focusing on leisure activities only. However, while considering what retirement will look like for you, the study found improvements to be social network, health, finances, participation in recreational activities, hobbies, social resources and status. The study identified that only 10% were satisfied in retirement while 51% were not. Variables explored in the study was short-term and long-term financial horizon, which means the time during retirement. If a person has short-term financial horizon they are more likely to rent and have debts, compared to those thinking about long-term and prepared for retirement. Most people in the study (18%) had a financial planning horizon for a few months compared to 13% of people who had a few years. Moreover, the longer a person is in retirement and their finances decreases, their ability to participate in recreational activities also decrease. However, if they had a long-term financial horizon they are more likely to enjoy recreational activities for many more years. Another study identified the depression effected the participant's financial planning horizon. For example, a depressed person had a shorter financial planning horizon, compared to those who were not depressed. People who are depressed feel a sense of hopelessness and their decision making includes information bias that leans to information being viewed as negative. Long-term financial planning increased satisfaction in retirement. While the study has limitations such as questions asked, it is an important consideration when thinking about what life will look like when you retire as thinking about long term retirement has its benefits to the quality of life you will have when you retire. Moreover, it is also important to make sure your decisions are not influenced by your mental illness. If it is, then having someone else help you decide and challenge your thinking will improve your retirement planning. Moreover, financial planners considering long-term financial planning will improve their client's satisfaction in retirement.
0 Comments
Trauma experiences are different for everyone but essentially it is one or more exposures that is over and above your capacity to cope. However, as it was difficult to cope you may have dissociated which is similar to switching the mind off or a feeling of floating away. This is when the amygdala in the brain tells you to freeze to survive. You may also become aggressive and fight or flight by running. Again this is when the amygdala tells you to fight or flight to survive. These strategies are helpful at the time as they would have been your only way to cope. However, when you continue to use these strategies when triggers occur but your current situation is actually not harmful then you need to process your trauma to heal.
Some people use money to heal from trauma. Flight may mean gambling to cope with the trauma symptoms to avoid noticing what you are going through. You may have felt that money was more important than you when you were young so waste it away as the association is negative. You may spend money and become a hoarder as your things were either given away or as a child you felt your belongings were not valued or lived as a have not of society. This doesn't mean for parents to buy their children whatever they want as it is important to teach them it is normal to do without sometimes but some parents may be neglectful on the abusive side and not consider their child's needs which may include giving away most toys they love. For a child this may be traumatic. Instead get the child to be part of the decision making. Some families are unfortunately poor and the children may grow up wanting to make up for the past by hoarding things to avoid the feeling of lack. People may also use money to feel a sense of belonging that is not real. However the real feeling of belonging may be too triggering as it was a traumatic experience when they were young so a superficial experience is safer. Noticing how you use money can help you identify your coping strategies and if they are maladaptive. Healing from your past trauma may help you change your relationship with money. Have a look at your bank statements which will tell a story of how you use money and then identify the reason why you are spending in such a way by finding the association between past and present. Change your present by healing from your past and have a better relationship with money. Research indicates that families who have dinner together develop emotionally stable children. Dinner can be space where parents and children talk about their day as well as share, acknowledge and self regulate feelings together. Dinner can also be a time to talk about money and economics. Money is usually taught in schools but it is helpful for parents to expand the topic and improve thoughts and feelings about money. However, it is also important for parents to check in on their own beliefs about money to avoid contaminating the discussion with negative beliefs and thoughts.
Negative beliefs and thoughts can be generational and you as a parent, if aware of your own, can break the generational habit and distil new and healthy beliefs about money to your children. Money is invisable now as finances are distributed through online transaction or cards. Giving children pocket money and encouraging them to distribute it in money jars can help them see the money, learn to budget and also possibly give away some to a charity to learn about caring for others and other people's needs beyond their own can help build financial literacy and improve their relationship with money. Bring money into family discussions and check in with yourself to ensure the conversation is healthy rather than negative. If it is negative you may need help through counselling to improve the way you see money so you can create a healthy money story with your own children. Hoarding may include challenges with spending which is called acquisitions or avoiding throwing things out. Online spending is a challenge with people hoard, who using spending to manage emotions or challenges with managing impulsive behaviour. Purchases may be planned or unplanned, however purchasing goods online can influence impulsive behaviour as there is a lack of deterrents that can help with managing impulsive behaviour and planning. People often go online to buy a planned item and then spend more than expected. Sometimes items are grouped to influence more spending. Conscious decision making require the ability to step back and reflect. Moreover, stimulus can influence behaviour for online purchasing. Stimulus may include special deals which can cause the cognitive bias of fear of missing out. Research shows the group shopping such as Groupon and unfamiliar brands influence impulse spending and can be a challenge for a consumer who struggles with impulsive spending, hoarding or emotional control. To increase online spending retailers limit physical stores, reduce mental and time effort when spending and improve the shopping experience. To reduce online spending, the consumer would need to create a strategy where more time is required when spending and the fear of missing out is reduced by realising it is an illusion. When spending online, have someone with you to talk through the process so you can think while talking, take your time and think about the purchase, don't spend online if you are emotional but work through your emotions by contacting a helpline, writing in a journal or talking to a friend. Make a habit not to let specials influence your behaviour as there is no such thing as missing out on anything. Furthermore, you may have a separate bank account that don't charge a fee for online spending and automatically deposit a portion of your income into that account to manage impulsive spending and online spending in general. Decision making also requires talking through the process, so talk to a family member or friend to discuss your strategy as that can help with reflection and improving your capacity to decide rationally. Becoming financially independent can be challenging as well as rewarding when you see the progress you are making. Staying on track can be equally challenging as you may have a budget that may seem challenging at the start, such as being encouraged to eat at restaurants more than your budget allows because your friends are doing it. You need to talk to your friends about your goals so they will understand and help you along your journey. You can't always do it alone. If you are in a relationship talk about your goals so you both are on the same page.
If you feel discouraged and disheartened as your money goals feel too complicated and you don't like your new lifestyle, remember the end goal. You may find a vison board helpful to remind you of your end goal. Consider the internal and external motivation. Going off track can feel right and good for the moment but terrible later on. Refocus and get back on track. Remember the why, what was challenging, work on the challenges and then refocus. It is normal to go off track as your new journey is a learning experience but can be a rewarding one. If you are doing something new such as investing in shares, bonds, self-managed super fund or real-estate learn something new about to topic to reignite your motivation to remain on track. Talk to people about what you are doing (only those who understand and can support you as some people are not on the same journey and may discourage you) which can help improve motivation and develop your thoughts around your goals. Staying on track and focusing on your goals is a work in progress. Sometimes we need to go off track to learn something new, so take the learning out of it. Going off track may mean you need to experience what you don't want so you can focus on what you do want. Going off track can be the motivator you need to stay on track so appreciate every step you take and keep reviewing your journey. Budgeting is often considered the same as a diet, as both consist of avoiding having the things you enjoy and cutting out items you want in life. This can be difficult when you enjoy your lifestyle and struggle with the thought of living with less. However usually with budgeting, you would consider it when life is financially challenging and you are looking for ways to cope. Budgeting should not be a reactive process but proactive and one to be practiced all the time.
To build wealth you would have to reduce expenses and increase income as well as make your money work for you through compounding. Budgeting is a part of this process, where you are monitoring your money so you will make sure that a certain percentage is placed for wealth building and you have a healthy cashflow to pay expenses, have money to invest and money for emergencies. How do you maintain the momentum to keep managing your money so you can maintain a healthy cashflow? Budgeting is structure. Structure is a normal part of life such as keeping your calendar working for you. As your calendar will help create structure so will budgeting. There are many strategies for budgeting such as the zero budgeting where there is no money left and every cent is for a purpose including in an emergency account, and there are many with percentage such as 50/30/20 percent where 50% is for needs, 30% is for savings, investments including retirement and emergency fund and 20% is for you. You can tweak the percentages to suit you. Another strategy is paying your small debts first so you feel successful in money management and then pay the bigger ones as you go, which is called snowballing. The strategy will depend in how you think, your momentum and past history. If you have a history of struggles you may lack momentum and belief that you can do it. Below is a list of cognitive bias that with awareness can help you stick to your budget and improve performance. Decision making Think of the way you make decisions and how to maintain self-control. You would need to wait for things and delay gratification when managing money. Delaying gratification is exercising a part of your brain that would take getting used to. It may be learning to ride the wave of urges and other unhelpful emotions that may cause you to spend on items you could live without. Create a positive reinforcement when waiting to enjoy your wealth. When you have maintained your budget, reward yourself with an activity that is within your budget and enjoyable. Decide on an amount you would reward yourself each week and enjoy staying in the black. For example, you may decide to save $100 per week and reward yourself for 1 hour every Friday night pampering yourself. Shift perspective Instead of focusing on the budget think about the cashflow coming in and building your wealth. Cashflow is king and the thought can be the driving force in changing your habit. Additionally focus on living the best life possible with what you have. Feel grateful for what you have and reward your achievements. Another perspective to shift is to realise that most people who have fancy cars and live an expensive lifestyle also have a mountain of bad debts. Bad debts are ones you can do without and where the assets depreciate. Good debts are ones where your assets appreciate. Money management can be a fun and rewarding experience because with enough financial literacy and support you can navigate the world a lot better, learn how to support yourself financially, become more independent and cope with life challenges such as leaving domestic violence or inflation. Disclaimer: The information provided above is not financial advice but intended for general information only. If you need help with improving your financial literacy and support to improve your financial behaviour and mental health, contact us today. For specific financial advice you can reach out to a financial planner. Do you have the financial resilience to cope with the high inflation rates? Do you have enough financial capability to cope with the changes? High inflation rate is a stage in life that we don't always think about. It is life uncertainty that requires reviewing your finances and coping emotionally. It is helpful to prepare rather than react and this can be a life lesson for the future. Often people are just surviving living pay cheque to pay cheque and believe they don't have enough savings to cope with the increased costs of living. Often the belief can be true but finding ways to increase income and reduce spending can help. Saving 10% of your income to pay yourself first and having an emergency fund is a helpful strategy to cope with this challenge. However emotional resilience and the ability to cope with distress can be helpful if you are feeling the financial pressure. On the other hand knowing the financial strategies to help you pull through will also help. This may include finding a side hustle, asking for a raise, cutting down incidental costs you can live without for a while, asking adult children to help financially by paying board money to teach them life skills and looking for government incentives and comparing utility bills can help such as electricity bills to find cheaper options. Often changing insurance companies will also help as many will provide discounts so you can become their customer. Emotional resilience is thinking differently to help cope. For example, you may decide on what you can do to manage the situation such as the strategies I provided above, seek help from a financial counsellor or advisor or review your budget. Financial counsellors can help advocate for you when in debt and financial advisors can help with reviewing your current situation and planning for the future. Financial counselling is reactive while financial advisors are proactive. Financial therapy involves mental health counselling and financial literacy to help cope with the distress and learn strategies to cope. Think about how you can cope rather than not coping, stay positive and hopeful, and write down a list of financial strategies to improve your situation. Coping with distress is also helpful. Distress is not an easy emotion to sit with as it can be uncomfortable but I'm sure most of you have hopefully learned that strategy with the uncertainties Covid-19 created. Body scanning where you focus on the emotion in your body and sit with it as well as mindfulness. Mindfulness is about being aware of your feelings and thoughts but gently shifting your awareness to your senses such as what you hear, see, touch, taste and smell. Mindfulness can be a way of life rather than a strategy and a practice that is helpful for everyone everyday. Find your own way to cope with distress and review your finances to manage these hard times and before you know it, you will adjust and life get easier to manage. Disclaimer:
The information provided above is not financial advice but intended for general information only. If you need help with improving your financial literacy and support to improve your financial behaviour and mental health, contact us today. For specific financial advice you can reach out to a financial planner. Compulsive buying otherwise known as impulsive spending is a behaviour that can be influenced by mental health, personality and adverse childhood experiences. People may spend impulsively because they feel it is comforting and distracted from negative experiences. It can be considered similar to binge eating, where food is used to comfort.
Impulsive spending occurs when the person spends spontaneously, struggles to manage their thoughts including behavioural biases and emotions and is seduced by marketing including social media. Impulsive spending is usually not planned, sudden without the consideration of consequences. The benefits is usually temporary with feelings of guilt and regret afterwards. The person does not need the item but wants to have it without considering the negative consequences. Positive consequences for impulsive spending behaviour may include a high feeling, comfort, improved identity and improved mood. While impulsive spending can have positive consequences they are short lives and overcome with negative consequences that can be damaging and lasting. Negative consequences include problems with relationships, financial hardship, negative effects on mental health and low self-esteem. However, the consequences may not be fully acknowledged as the thoughts of spending is pervasive. Impulsive spending is an external coping strategy. Therefore internal locus of control can manage the behaviour. Cognitive behaviour therapy, and acceptance commitment therapy are treatment options available. Thinking about long-term goals, distress tolerance, reviewing your relationship with money, healing from childhood adversity, and reflecting on what you want to buy can help with impulsive spending. Financial literacy and reviewing your budget can also help improve money management and spending behaviour. Moreover, healthier coping strategies can also alleviate spending behaviour. While these strategies sound easy, it can be challenging for the person to manage the behaviour, however with time, support, trust and patience it can be done. Gambling addiction affects people of any gender and any age and in any socioeconomic status. Gambling is a behaviour that involves a decision to eventually win a prize after many attempts of spending money that may belong to the gambler or not. Gambling can be a form of impaired decision-making and can also a result from a negative life experience. Gambling addiction is now known as gambling disorder in the Diagnostic and Statistical Manual, fifth edition (DSM-5) under the non-substance behavioural addiction section. Symptoms need to result in clinical impairment of distress within the following 12 month period and include four or more of the criteria listed in the manual. The criteria includes but not limited to lies to hid the problem, feeling restless when trying to cut gambling and needing to gamble to increase money or achieve a desired level of excitement. Some people gamble to express their anger, have a negative relationship with money as they were told money was more important than them or want a sense of belonging. Risk factors also include a lack of family cohesion, loneliness, financial hardship and using gambling to mitigate it, impulsive personality where there is a lack of self control to manage the urge, high sensation-seeking behaviour, and a lack of coping strategies to manage life challenges. Therefore, there are many complex factors to consider when helping someone with gambling addiction. Coping strategies to manage problem gambling include counselling to work through past trauma, experimenting with healthy coping strategies, improving financial literacy to learn about and appreciate healthy money management including planning for your financial future, improving relationships around you to develop a healthy sense of belonging, improving what money means for you as well as facing your problems and working it out. |
AuthorArticles about mental health, money and behavior Archives
February 2024
Categories
All
|