Manage your finances, don’t let them manage you

Let’s assume for a moment that you’ve managed to achieve an exemplary financial hat trick in that:

• You’ve learned to budget and spend sensibly.
• You have no debts, other than your mortgage.
• You have savings for those rainy days.

In short, you’re on top of your finances. This is obviously a commendable state of affairs. But here’s the crunch: are you happy? Or does your exemplary performance in the financial management stakes come at a cost elsewhere in your life? Perhaps you hate your job. Maybe you’re stressed to the eyeballs. Perhaps you hardly ever see your family (for the sake of this exercise, I’m assuming that this is not good). To put it bluntly, are you paying too high a price for your financial well-being?

Now, I’ve not spent my time conjuring up several thousand words on the merits of good financial management only to throw a dampener on proceedings at this late stage. I genuinely believe that having your finances in good working order is an attainable and worthwhile goal.

However, it’s not the only goal. If it were, then we might just as well have Gordon (‘Greed is Good’) Gekko as our patron saint. I think it was Oscar Wilde who said that it is better to have a permanent income than to be fascinating. Personally I’m more convinced by something Bob Dylan allegedly once sang: ‘What’s money? A man is a success if he gets up in the morning and goes to bed at night and in between does what he wants to do.’

The reality is that managing our financial affairs is not an activity that is totally divorced from all other aspects of our lives. I’d suggest that it is one of up to three perspectives that we need to consider, the other two being our personal goals/ambitions/needs and, if applicable, our family goals, ambitions and needs.

In the business world, there is a widely used model called the Balanced Scorecard which encourages an organisation to look at a whole host of factors as a means of assessing its overall well-being.

Perhaps the same principle should apply to individuals. Maybe we need to recognize that true success and happiness depends on ordering our personal, family and financial lives into some kind of balance. Perhaps we shouldn’t be chasing that promotion if it’s going to mean spending more time away. Perhaps our partner wants to work and we need to change our working patterns and lifestyles to allow that to happen. Perhaps we need to consider selling up the family home and downsizing if that gets us all closer to the lives we want to live. There’s a world of difference between getting the income we could and getting the income we need.

So would your life be better balanced if you were to…

• Change the way you divide income-generating and caring roles within your family?
• Spend more time with your family and/or friends?
• Spend more time on leisure activities, hobbies or personal relationships?
• Divide your time between a number of different income-generating activities?
• Devote more time to the local community, church or voluntary activities?
• Become involved in environmental and/or political matters?
• Increase the variety of activities you undertake?
• Undertake part- or full-time education to improve your chances in the job market or in launching a new career?

For more information visit: http://www.infideas.com/self-development/personal-finance/