Our emotional relationship with money is complex and confounding. According to experts, it’s driven by a complicated set of beliefs, attitudes, and behaviours, many of which were shaped early in our lives. These emotions can be so powerful, that they interfere with our financial decision making and lead us to poorer outcomes. One of the best ways to avoid these personal negative influences and get on top of your finances, is to partner with a financial adviser – and with new technology that partnership is becoming more accessible than ever.
Our attitudes to money are often driven by beliefs shaped in our childhood. These attitudes and our associated behaviours with money have a profound impact on our financial – and overall – wellbeing.
When psychologist Adrian Furnham studied the emotions people had associated with money over the prior twelve months, the top four in ranked order were anxiety, depression, anger and helplessness. In fact, eight of the top ten ranked emotions were all negative and the emotions were more strongly felt in women than in men[1].
Financial wellbeing, as defined by a person’s ability to meet financial commitments, having resources to enjoy life and having an ability to cope with financial shocks, is driven largely by behavioural and psychological factors and not your financial knowledge. Collectively these factors explain around 60 percent of changes in financial wellbeing, whereas financial knowledge explained only 9 percent of changes[2].
To put it bluntly, negative money attitudes are harmful. They can lead to decision making that undermines our happiness and places obstacles in the way of us achieving our career, relationship and lifestyle goals.
So, if you’re feeling stressed about your own money habits, savings or investments what can you do to turn it around?
The benefits of financial advice aren’t just financial
Not surprisingly, research shows those receiving financial advice tend to do better financially. Research out of Australia also showed those who receive ongoing financial advice experienced 13 percent greater levels of overall happiness, a 21 percent increase in peace of mind, and were 19 percent less likely to have arguments with loved ones[3]. So, partnering with a good financial adviser can deliver more than just financial returns.
Technology is changing the picture
You may be thinking, that’s all well and good, but I don’t have enough money to speak with a financial adviser. Traditionally getting good financial advice has been out of reach for many people. But that’s starting to change. It’s not about how much money you have, it’s about making the most of what you do have. Through smarter technology, investment companies are now offering more accessible solutions.
For example, at Milford we offer financial advice to our KiwiSaver members through our KiwiSaver Advisers. You can also access financial advice on the Milford KiwiSaver Plan via select independent financial advisers across the country. We also offer advice to anyone investing over $500,000 via our Private Wealth service. These services allow you to partner with an experienced adviser who will get to know you and your situation and help guide your investment strategy. In addition, we have custom-built online tools that give you expert financial advice in relation to Milford’s KiwiSaver Plan and select Milford Investment Funds. This smart digital advice is available right at your fingertips, no matter how big or small your balance is. And it’s offered at no extra cost.
Putting it all together
When you’re living a busy life, it’s hard to find the time for everything. Our relationship with money is complex and comes with a range of emotional baggage. Partnering with an adviser can help. It can help relieve that anxiety, giving you confidence and peace of mind that you’re on the right path – freeing you up to spend your time on the things that really matter.
