Resolutions and the Meaning of Money

Do you have a healthy relationship with money? It may seem an odd question, but cutting-edge financial advisors are fascinated by the link between money and happiness and well-being.

 A 2009 study by Jeffrey Dew, PhD, Utah State University, quantified the link between money-related tensions amongst couples and the risk of divorce. Beyond sexual relationships, money fights were the most common harbingers of a breakup. Couples who disagreed about finance once a week were over 30% more likely to get divorced than those who argued over money a few times a month. (NY Times, 12/9/09)

 Money and wealth are not the same. Money is physical or electronic currency that may be spent immediately for goods and services. Liquid money is a component of wealth, but “wealth” includes assets that are not liquid and not immediately convertible to spendable cash. An example is a person who is “land, house, or business interest rich” but cash poor. We hear about personal and business assets being liquidated at fire sale prices to meet a cash squeeze or to pay estate taxes or other pressing obligations.

 Our relationship with money may be healthy or unhealthy. How we regard our finances is a function of thoughts, beliefs, and emotions formed since childhood. Often we deal with money in the same way we deal with relationships. If we are careless in our relationships and our personal behavior, our finances will reflect the same lack of care. How often do we read of the rising Hollywood or athletic star destroyed by drugs and alcohol? Whether born of insecurity, narcissism, or some other need, money may be fuel that fires destruction. Conversely, there are those who are loving, caring, and giving, some with wealth and some with little, who are happy and well-adjusted, leading meaning-filled spiritually rewarding lives.

 People do not pursue money for its own sake. Money represents other things. It may be power, a means of control, satisfaction of competitive urges (“He who dies with the most toys, wins”). The most basic role of money is security. You want to know that you can meet your everyday needs and those of the people you love and care for.

 A certain level of available money, along with no debt or manageable debt, allows one to sleep at night. Your first task in personal planning is building a healthy financial cushion, managing debt sensibly, with insurance safeguards in place relative to property, liability, health, disability, and death.

 Money is freedom. Having insufficient money to meet needs and satisfy obligations is a major source of tension in families, in business relationships, and in one’s own head. Having ample money and liquidity offers choices and removes constraints. Financial freedom may bode good or ill. We can make good choices, or bad choices. Chronic overspending, false friends and bad influences, immoral behavior, and a life of dissipation is a slide into ruin greased by money.

 If our relationship with life is one of balance, our money behaviors will reflect similar satisfactions. One of the most important questions a financial advisor can ask is: “What is the money for?”

 The answer should not consist of things, as in, “I want to buy a car.” Frame money in terms of relationships—what it means relative to those you love and care for, your spiritual orientation, your sense of meaning and satisfaction, your obligations to others, what makes you comfortable and uncomfortable, your legacy.

 What challenges do you see in the next ten years? How does money relate to the alternatives needed to meet each positive or negative challenge? Is money a resource that can power alternatives, or a constraint? How does money relate to what you wish to experience, the outcome desired?

 How do you define money? How much is enough?  Money does not define you. Your life should run your money; your money should not run your life. Again, what is the money for? Make a healthy relationship with money your #1 resolution for 2014!

 Lewis Walker is President of Walker Capital Management LLC. and Walker Capital Advisory Services, Inc., a Registered Investment Advisor (R.I.A.) Securities and certain advisory services offered through The Strategic Financial Alliance, Inc. (SFA).  Lewis Walker is a registered representative of SFA which is otherwise unaffiliated with the Walker Capital Companies. ▪ 3930 East Jones Bridge Road ▪ Suite 150 ▪ Peachtree Corners, GA 30092  ▪ 770-441-2603 ▪ lewisw@theinvestmentcoach.com

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