Here’s why ‘joy’ is key to successful financial planning, according to experts

Finance


High Inflation, Low Housing Supply, Recession Warning: When people think of financial planning, they usually don’t think of joy, especially in today’s economy.

“I think joy has to be rooted in financial planning,” Mitlin Financial founder Lawrence Sprung told Yahoo Finance Live (video above). “And there should be a reason for what you are doing.”

When planning your income and expenses, he says, you shouldn’t just focus on money. They need to understand what they want to build wealth for and what they will do with that money. Sprung also criticized financial advice that focuses on picking up items that make people happy in their daily lives.

“People are like, ‘Oh, maybe I shouldn’t go out for that coffee, I’ll save that few dollars every day for the next 20 years and I’ll have another $25,000 in my retirement savings.’ I’ll tell you,’ he said. “That’s great, but we also have to think about the joy we get from that money and what we’re doing today. And if that’s important to you, that cup of coffee is As long as you plan, you’ll be fine.’ For that, do it, use it, and drink it. ”

Sprung admitted that people often feel overwhelmed by the idea of ​​financial planning because they have no strategy and juggle multiple jobs, children and other financial responsibilities.

The first step, he said, is to create a stress-free budget. Start by collecting your income and expenses. From there it will be easier to find what you need to cut.

“Often there is fat out there that can usually be trimmed: old subscriptions, infrequently used subscriptions, services that can be downgraded,” says Sprung. “But understand what the budget process looks like and then compare where you are now with your future goals.”

Sprung added that it’s also important to tie the financial budgeting process to exciting future plans and enjoyable experiences, such as buying a house, a vacation home, a new car, or sending a child to college.

”[A]Even if you put that money away for those goals, you don’t feel the pain of throwing it away because you associate that joyful experience with what that money is and what that goal or purpose is.” he said. Injecting joy into the process makes the job even easier. becomes more profitable. It will lead you to the path you want to plan. And in the end, it can bring you closer and closer to achieving the goals you want to achieve. ”

Jared Mitovich is a writer for Yahoo Finance. follow him on twitter @jmitovich

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