Money and Being

It can feel quite unnatural to view money in this way. We are conditioned to perceive income in small, regular amounts rather than one enormous lump sum. We have our regular outgoings - food, accommodation and so on - that need to be paid for, so we think of our income in the same mould - in timely, frequent instalments. But if we look over a much longer period we start to get a sense for how we might use our money differently, more strategically, more interestingly. Faced with a lifetime income and a list of popular spend categories - property, pension, leisure, food, wedding, family, car, holidays, etc - we get to make bigger and more exciting choices. 

We might decide to spend less on the properties we live in throughout our life and have more money for travel and luxury holidays. We might choose to spend less on the cars we drive and retire early. We might decide to have two children, not three. Or three children, not two. These are incredibly chunky decisions and events that we may not really think through or fully pre-determine. We can just sort of fall into them. Meanwhile, we give headspace to the minuscule weekly arithmetic of: ’Can we afford that trip to the cinema?’ and ‘Should I really buy the premium jam or make do with the cheap brand?’   

This long-term lens helps give us perspective. But income and expenditure is not the best starting point. We must first understand why we need money at all, and secondly, what amount of money will fulfil our needs and wants. 

Why we need money

It’s worth here, I feel, a quick rollercoaster ride through the ages to better understand our modern desires for money. 

In the most archaic times, ‘need’ meant food, heat and shelter. Nothing more. You’d use natural resources to get these. Money was not required. You’d create your own fire. You’d make tools to hunt and kill animals for food, you’d forage from wild trees - on land that was, crucially, not owned by anyone and was therefore common to everyone. You’d hack down branches and reeds to build a home. 

As we moved through the stages of civilisation, people became specialists and would share their skills with the community to ensure the entire group was well cared for. The best at making tools would make the tools, the best at hunting would go off and hunt food for the group and so on. Life’s needs remained simple, society functioned well, albeit in a very basic fashion, and there were very few complex daily demands or emotional stresses. 

Collective needs remained exactly that - collective. And those needs were lean and modest. 

The evolution of bartering mixed things up a little bit. The best hunter in the community - let’s call him Bill - would still go out and hunt down a load of food. But, after setting aside enough for his family, Bill would then offer the rest of his slain animals to the community, in exchange for the products and services he required. That might be a sack of coal, flour, firewood, or a new spear.  

The advent of money and recognised currencies followed. This brilliantly solved the clunky problems of bartering but it also signalled a fracture in the collective community spirit. People became more selfishly focused on financial gain over group needs. 

Then came the real jolt to mankind: The Industrial Revolution. Suddenly, people who had tended the land from which they would eat and survive were coaxed into towns and factories to work for an organisation. Employment existed to line the pockets of business-owners. The modern wage economy was born and so began the formation of myriad new class divides, social constructs and cultural patterns. 

Human survival skills were eroded as machines replaced more and more functions in the manufacturing process. Division of labour and economies of scale galvanised the dominance of machine over man. People were employed to plug the gaps in service that the machines couldn’t yet fulfil. So the people operated the machinery, performing ever more menial repetitive tasks for 60 hours and more a week. The capacity for self-sufficiency was severely winded. We now got up every morning, quite mindlessly and robotically, in order to go and earn as much as we could possibly get our hands on. 

As we hurtled into the modern era, weekends were invented and the concept of structured holidays evolved, a motivational respite from the heavy-duty manufacturing eco-system that we were now firmly entrenched in. Competition was growing for, and among, workers. Firms were making big profits and wages were on the up. The personal finance services we are familiar with today - banks, loans, savings accounts - sprung up in their infancy, appealing to the workers’ new wealth and new financial responsibilities. Mortgages and mainstream investments came next. 

From the 1960s, once the world had recovered somewhat from the devastation of World War Two, the trend for industrialisation accelerated, merging fluidly into modern capitalism. We now wanted a lot more than we actually needed. Yes, earning money to put food on the table for the family was still the priority. But it was just step one on the ladder to a house, a car, a holiday in the sun, a radio and TV, and then, when the technology allowed, a colour TV and then a video recorder and then a Sky dish and then Amazon Prime and then…. Well, that brings us pretty much up to date. 

Today, we are further removed from the historic ideas of ‘need’ and ‘want’ than ever before. We are born into a world of excess and impermanence, one where products are built at high volume using cheap labour, all designed to fail, break or become out of date in next to no time. Long gone are the days of our TVs, ovens and washing machines lasting a generation. 

Shareholders push businesses to make as much money as they possibly can and always more from one year to the next. Profits must rise. New cost-cutting measures are perpetually sought out. New products, features and seasonal must-haves are dreamt up and we are cajoled into buying them red hot off the conveyor belt. The immediate high of each fresh acquisition soon dissolves and we’re stuck with another expensive item to maintain, insure, repair and accessorise. 

Humans have a damningly fallible mindset when it comes to money. There’s no ‘enough is enough’ trigger to moderate our behaviour. We struggle to locate the point at which increasing our wealth no longer brings additional happiness to our lives or adds benefit. 

But it’s a struggle worth having. 

The pursuit of happiness

“The law locks up the man or woman, Who steals the goose off the common
But leaves the greater villain loose, Who steals the common from the goose.”
-17th century folk poem

There have been many studies into the links between wealth and happiness. They tend to elicit three common verdicts: 

• More money can give you opportunities, comfort and luxuries. 

• Having more money does not correlate to experiencing more happiness. 

• Depending on how much money you have, your happiness is likely to come from a different source. 

As you increase your wealth, you naturally increase your ability to do more and buy more. As one goes up, so does the other. Coming from a low base, the benefits of getting more money are initially very tangible. But as your wealth continues to grow, the incremental benefit gets less and less. The upwards curve starts to tail off to the right and flatten. Eventually it tails off completely and there’s no point (in terms of personal satisfaction) in having any more money. 

One study concluded that the curve hits the top point, the horizontal plateau, at an average annual salary of US$95,000, after which a person’s happiness begins to decline as their income continues to goes up. 

Research also tells us that wealthier people find more happiness when they focus inwardly on themselves, while poorer people find more happiness when connected to others. So richer people tend to be more isolated, self-centred and competitive, whereas poorer people seek joy and nourishment from relationships.

There are some things that money can’t buy. In his famous hierarchy of needs, psychologist Abraham Maslow starts at the base with survival and security. This includes things like food, property and social stability, all of which money can buy. He moves upwards through the chain to relationships and belonging, which money can assist with but not guarantee. At the top of the pyramid sits self-actualisation and esteem - things like morality, creativity, respect and confidence. Money has very little influence on these superior human qualities. Money can’t give us the pure traits that most richly define us. 

Your Values 

“To be yourself in a world that is constantly trying to make you something else is the greatest accomplishment” - Ralph Waldo Emerson

To reverse-engineer the modern wage economy, so that we’re in full control of how much money we need and not just earning and spending in a senseless void, we can use a simple three-tiered mechanism: 

• Your Values - The things that are most important to you 

• Your Life Story - The life that will bring you the most happiness in line with your Values 

• Your Money Plan - The money you need to experience your Life Story

You can go through these steps on your own, with a partner, or even as a whole family. 

Let’s start with your Values. In this context, we’re not talking about core ethical values, like integrity, humility or courage, but more literally, what you value. 

What do you believe in? What’s most important to you? What do you hold most dear? What could you not live without? What warms your soul and makes you truly, madly, deeply H.A.P.P.Y? Because whatever it is, that is what you ultimately should be spending your time and money on. 

Finding your Values

Take a few moments to list the three things that you believe are your highest Values. The three most important things in your life. Try to keep it to a maximum of three if you can. If you’re finding it hard to choose, don’t worry - just go with the three things that come to mind right now and you can revisit later. 

Your Values might focus on relationships or connections - my faith, my family, my partner, my children, my friends, my dogs. Your Values might be experiential - my career, my business, my hobbies, my adventure holidays, my gym classes, my food, my sex life, my voluntary work, my health. Your Values might be emotive or behavioural - my freedom, control, or independence; my creativity or productivity; respect, or a sense of belonging to a group. Your Values might sit within the physical - my home, my garden, my classic cars, my art collection. 

Your Life Story

Your Life Story is a summary of how you would most like to envisage your future years. It should extend your Values and capture all the big topics you may encounter on life’s highway. The things you’d love to do and the choices you might like to make. It can be created in any way and take any form you want - a handful of sentences, a poem, a chart, a sketch or series of images.

Consider things like where you might live and with whom, career, family, the new experiences you want, the things you want to achieve, the things that enrich your mind, the kind of lifestyle that will keep you fulfilled, when you want to retire, and so on. 

Think of your Life Story in discreet chunks, one decade at a time. It is unusual to look so far in to the future but don’t worry if it feels vague and sketchy - this will be a work in progress that you can come back to. 

Here are two examples of a Life Story. 

Ciara, 27. Her Values are: The environment, family and community. 

‘I want to spend the next few years focusing on my job as a Ranger for the National Trust and having fun with my fiancee, Andrew. I’m just starting out in my career and I have so much still to learn. Money is tight but we want to buy a house so we need to earn more and save more. It’s hard to imagine right now but I guess I’ll want children at some point, maybe two, probably in my late thirties. I love where we live in Lancashire, so I’d like to stay there. It’s a great area for raising a family, near my mum and dad, and very affordable. In later life, I’d love to go travelling. I don’t need a lot of luxuries. Time, family connections and nature are everything to me.’

Tom, 36. His Values are: His business, independence and city living. 

‘For the next five to 10 years I hope to really grow my digital marketing business. I love my city lifestyle and want to continue enjoying time with friends, eating out at the best restaurants, going to gigs and watching the rugby. I’d like to live and work abroad for a few years - maybe New York. By my mid to late forties I hope to have made the business a success so I can start to relax, perhaps take on a few consultancy projects. I think I’ll always come back to London but it’d be great to have a couple of holiday homes, maybe one in Italy. I’d really like to retire quite young, before I’m 55, but I need enough money to make sure that retirement is active and fun.’

Creating a Life Story might seem difficult at first, or even scary. Again, it’s a shift from the weekly and monthly routines we are more familiar with. ‘But how can I predict my entire life? It doesn’t work like that. Anything could happen. I might decide to open a tea shop in my sixties or become a foster parent or start a cat sanctuary. I could get run over by a bus tomorrow…’

Yes, we don’t know exactly what we will want 10 years from now and unforeseen events, major ones, can lead us to new unimagined realms. We can, without any planning or little prior warning, lose jobs, change careers, get married, have kids, get divorced, get married again, have more kids, move to another country, have a life-threatening illness, win the lottery, develop an addiction, inherit money we hadn’t planned for, who knows…? 

But the unknown nature of gazing into the future is precisely what makes worrying about it irrelevant. We can still make guesses, we can speculate and envision, and we can reshape our plans along the way. 

Crafting a Life Story can be incredibly exciting. It allows you to step back from the monotonous daily grind and think BIG. It can be extremely positive, powerful, life-affirming and motivating. 

Wouldn’t you rather dream of the wonderful things you could do with £100,000 than think about what you’re having for dinner tonight? And wouldn’t you rather have the most incredible experiences you could possibly think of, rather than a succession of tiny, short-term gratifications?

These days it’s considered boring to future-plan. Commercialism reminds us constantly that it is far more sexy to be spontaneous, to live life to the full every day and never let a moment pass us by. This is one of retail’s favourite tricks. Don’t get me wrong, I’m all for skydiving, wild swimming and jetting off to Paris for a last-minute weekend getaway. I am a huge advocate for living in the moment. We should absolutely be aware of our surroundings, enjoy the skies and suck up the beauty of the world in all its glory. But I also believe life should be more than survival and more than simply getting through the day. We deserve the big, bold, brilliant things too. 

Living in a debt-driven environment, we lurch from month to month. We’re forever nudging the can down the road a little at a time. We never get to climb the big mountain and sit at the top, marvelling at the view. Remember, the speedy spontaneous hare lost out to the relentless tortoise. 

Let’s take a look at two more Life Stories:

Carol, 40. Her Values are: Her children, her husband, health & fitness. 

‘Everything we do is for our three kids - Amy, Jess and little Johnny. The next 20 years are all about helping them grow into great adults, supporting them through education and giving them a leg-up onto the property ladder. We would like to move to a slightly bigger house with a garden next year, preferably in the nearby village. And I’d love to start my own yoga and fitness business one day. In 20 years, once the kids have all grown up and moved out, we have a far-off dream that we’ll semi-retire to the coast and maybe run a little B&B or a gift shop. I’d love to learn languages and play more golf too.’

David, 55. His Values are: Freedom, music and travel.  

‘I lost my wife a couple of years ago and I feel I need to reconnect with myself. I want to start afresh, somewhere totally new. Maybe in western Scotland. It’s beautiful up there. As a tutor I should be able to find work in most places. A little two-bed house with no mortgage would be ideal - somewhere I can relax with my guitar, my journal and my history books. It would be great to go on long winter breaks in the Mediterranean.’

Create a Life Story

Spend a few moments creating your own Life Story. Remember, it’s not a detailed plan that you religiously stick to at all costs. It’s a broad sweep of the kind of life you’d like to have, one that is true to your Values and one that you believe, at this present time, will bring you the most happiness. 

The question ‘what will make you happy?’ is very broad and has innumerable possible answers. It can be a hard question to answer. So you may want to start by asking ‘what makes you unhappy?’ or ‘what do I not want?’ It’s then much easier to build an answer. 

Your Life Story is actually already there, within you. It’s your most natural instinct. It’s a reflection of who you are, what you treasure most and what you most want in life. You just need to reach deep inside and pull it to the surface. 

Your Money Plan

Creating a Money Plan for your Life Story is the last piece in the jigsaw. Your Money Plan is a high-level projection of the money you need. It consists of your basic expenses and your big life events. 

Your basic expenses  

Calculate the minimum amount of money you would be happy to live on right now. If you were to cut out the luxuries, how little would you need each month just to get by?  

In working this out, press up and press down. Put upward pressure on things that fall outside the obvious monthly bills, things like vet bills, the dentist and home maintenance. These often catch us out and scupper our otherwise-perfect plans. So allow plenty of budget for them. Then put downward pressure on the more common spends, like groceries, nights out and clothes. Most people find they can spend a lot less in these areas without feeling any sacrifice. 

Your life events

Now, take a piece of paper, draw a horizontal timeline and a vertical axis for money. Plot your life events with an estimated amount for each. Start with a 12-month view. These life events are the chunky one-off expenses you can predict and plan for, outside of your basic monthly costs - a summer holiday, a friend’s wedding, a new phone, a bike, a school trip for one of the kids.  

You might end up with something a little like this:

• February: MOT and service - £300

• April: Cornwall trip - £1,000

• May: Phone upgrade - £400

• June: Family weekend - £600

• August: France holiday - £1,500

• October: Sarah’s wedding - £800

• December: Christmas - £800

You can run this kind of timeline over any period. Twelve months is a good starting point, but it gets more interesting the further out you look. Preferably, the rest of your life. Try plotting the big wealth events that will match your entire Life Story.