Over the last few weeks, we’ve been talking about the five elements of wellness:
- Career Well-Being: finding meaning and fulfillment in the time and energy you expend for pay
- Social Well-Being: enjoying strong, positive and supportive relationships
- Financial Well-Being: having balanced, adequate financial resources
- Physical Well-Being: health!
- Community Well-Being: experiencing a sense of engagement with your community
Last time, we talked about career well-being and how people on the cusp of major transition (into a new job, ending full time work, making a career change) sometimes notice that they are out of alignment. They often recognize compromises they’ve made to ensure financial security. These compromises sometimes negatively impact their physical, community and social well-being. In other words, they may or may not be satisfied with their work life…in service of finances.
I suggested that a good first step is to assess your work/life situation, to identify what’s working and what’s not working with things now. To do that, I offered some free online assessments and a list of questions. All of this is to help you really understand your level of satisfaction with your work/life right now. If you’d like to review that entry, here it is.
Depending on what you’ve learned after this work/life look-see, you may be excited about trying something new…or you may be wondering if you can make any change at all. This is where taking a similar “as objective as possible” look at your financial situation can help. That is…what is your level of financial well-being? Here are some ideas to help you do that.
First, if you didn’t complete the Auerbach Well-Being Satisfaction Scale before, do it now or at least rate yourself in the following way:
On a scale of 1 (low) to 7(high), I would rate my financial well-being today at: ___________.
On a scale of 1 (low) to 7 (high), my target level of financial well-being is: ______________.
So, let’s say you rated today at “3” and your target is “6.” The next questions are:
- “What would my target level (in this case, a ‘6’) look like?” This question helps us get objective about our desired state. Here you can define things like:
- How much money you would have in savings
- How much debt you would carry/not carry
- How much retirement income you would have available
With this question, you create a picture of what your desired state of financial well-being looks and feels like, so you know what you are aiming toward. For many people, this is difficult to do, because “enough” is difficult to define…and a sense of security feels nearly unattainable.
There is a great chapter on this topic in The Encore Career Handbook called, “Finding Your Encore Number.” In this chapter, the author, Marci Alboher, suggests managing what’s “enough” for you by defining:
- Three must-haves: things you need and cannot possibly give up
- Three like-to-haves: things you would like to do or have, but that you could do without
- Three can give-ups: things you currently spend money on, but could let go
If you’re struggling with the question of what’s “enough,” I highly recommend her book, or at least this chapter, to help you get some ideas about how to define that. In addition, she offers a lot of good ideas about generating income in different ways – through tax breaks, school loans, grants and scholarships. If you’re planning on a career change especially, many of these may be available to you.
- “In what ways are my habits around money (spending, saving, debt, etc.) in alignment with my values?” If you haven’t done any recent work on defining your core values, this blog offers some suggestions for analyzing and choosing your values, at this point in your life. Once you have those in place, you can then look at how your values and habits align and support each other, or not!
For example…you may discover that your core values are peace and compassion. And, you recognize that you’re carrying an amount of debt that leads to anxiety and self-judgement – so, lack of inner peace and compassion for yourself.
With this information, you can decide what change you might want to make to align your values more closely with your habits.
Here’s an interesting note if you’re debating about the relative value of clearing up debt versus saving more money. Studies show that getting rid of debt has a larger impact on our happiness than saving does. (Not that you shouldn’t do both!) So, if you have to make a choice between the two – and your goal is greater well-being – it’s more important to get rid of debt than to build savings.
- “What is one change I can make to bring myself closer to my target state (in this case, bring that ‘3’ to a ‘4?’”) Here, you define one or two small things you can do to move you toward that desired “6.” Why such a small step, you ask? Well, when we notice something isn’t how we’d like it to be, we often resort to grand plans, in a valiant attempt to remedy the situation. The problem is…we often set ourselves up for disappointment, if not failure! So, instead, we will take this in baby steps! Then, as we have small successes, we can then take on more (and perhaps bigger) changes to bring us closer to our goal.
There is, of course, much more to say about financial well-being, but this should get you started on the road toward defining what your own financial well-being looks like…and how to get there. This information, along with your look at your career well-being, can help you make some new and different choices to find more balance and alignment…and greater well-being.
For more information and insights into financial well-being, here are three books you might want to check out:
Well-Being – The Five Essential Elements
“Money often costs too much.” –Ralph Waldo Emerson