A Zen Approach to Personal Finances

I spent last weekend with a friend of my husbands that we hadn’t seen in several years, Edward.  Interestingly, Edward, who used to be very concerned about money issues, seems to have reached a Zen state where he is aware of his financial obligations, spends sufficient time managing his affairs, but has reached a state of understanding and acceptance regarding his ability to change his financial future.  The main thing that has happened in the intervening  years was a series of illnesses, some quite severe, where his focus was entirely on the health and well-being of his family.  Interestingly, I found that a number of financial steps that Eddie has taken could be considered by other people wanting to stress less about their finances:

--Eddie has outsourced more of the management of his finances including his company– although I do not maintain a financial advisor, in some cases it makes sense to have others helping out.  Importantly, Eddie interviewed multiple advisors before deciding on the one whose philosophy most closely aligned with his, especially regarding risk and return.  Importantly, the advisor is helping Eddie to pay more attention to cash flow issues, rather than just assets.  This is important as Eddie could experience cash flow issues (despite holding sufficient assets) if he does not monitor this well.

–Eddie prioritizes insurance and health needs — when I was in my 20′s, I never thought about health insurance or the costs of a doctor’s appointment or anything like that.  I’ve been fortunate that I’m relatively healthy, but as I get older, I’ve realized that health spending, even for someone very healthy, can have many nasty surprises.  Eddie has raised the level of insurance for his family and spends extra on additional healthcare to prevent future health emergencies.  The older I get, the more I see this is important.  For me, I include the cost of purchasing, healthy foods and taking part in exercise and other healthy activities as part of the whole package.

–Eddie has stopped checking his account balances daily and instead focuses on big shifts — more than anything, this specific move seems to have helped him to be better at making investment decisions rather than micro-managing or day-trading.  I should practice this more.

Shared at Frugal Friday