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Personal finance


n my view, life planning with no sense of financial reality, or financial advice with no link to your personal dreams and aspirations are both equally meaningless. Proper financial planning makes the connection and attempts to answer one fundamental question: ‘how much is enough?’ The more technical aspects of


HOW TO SPEND IT? I


investment strategy (e.g. pension law or taxation) are of course the ‘bread and butter’ of my job. But effective wealth management is only one side of the equation. What about the other, equally important, aspect of financial planning: how you spend your money once you have it? If you don’t devote at least some time


to thinking about your spending habits, how can you be sure that you’re not wasting a huge amount of money on things that don’t really improve your life?


Beyond a fairly modest threshold, studies repeatedly show that increased income and material


wealth have no measurable effect on your happiness.


So, how could you go about adjusting


your spending to maximize your contentment with life, regardless of your level of income? A new book ‘Happy Money: The New Science of Smarter Spending’ contains some useful guidance.


by Ian Thomas CFPCM Director, Pilot FINANCIAL PLANNING.


Beyond a fairly modest threshold, studies


repeatedly show that increased income and material wealth have no measurable effect on your happiness. Not only that, but taking out a bigger mortgage, commuting further to secure a higher-paid job or working longer hours in order to fund a ‘dream lifestyle’ can even reduce your happiness, health and general well-being.


The authors propose five key principles which could help you get the highest happiness ‘bang for your buck’:


1. Buy experiences – spending money on alluring material goods provides an initial buzz, which soon dissipates. in contrast, experiential purchases tend to increase in value as time passes. We look back fondly on past family holidays or a reunion dinner with friends and gain pleasure from recounting stories of our road trip across the United States.


2. Make it a treat – from chocolate to expensive cars, once a luxury becomes too commonplace – part of our everyday lives – we cease to derive as much pleasure from it. By self-rationing our indulgences, we may actually increase our enjoyment, as well as spending our hard-earned money more efficiently.


leading the way in financial planning & wealth management


For more information contact Ian Thomas 01803 771 096


ian@pilotfinancialplanning.co.uk


Pilot Financial Planning is authorised & regulated by the Financial Conduct Authority. www.pilotfinancialplanning.co.uk


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