Finance

DOES MONEY MAKE US HAPPY?

Andrew Fort B.A. (Econ.) CFPcm Chartered MCSI APFS, Certified and Chartered Financial Planner, Fort Financial Planning

Financial wellbeing is the study and application of how money can be used to increase our happiness and fulfilment.

There are five parts to financial wellbeing: •A clear path to identifiable objectives •Control of daily finances •Ability to cope with financial shocks •Having financial options •Clarity and security for those we leave behind

A great deal of research has been done on the subject, revealing two universal truths.

Firstly, money itself does not make us happy, it is how we use it that matters. For example, Professor Tim Kasser of Knox College has produced research that shows the value of accumulating wealth for its own sake is in direct contradiction with happiness.

Secondly, and best highlighted by the Harvard study on happiness, the largest contributor to our wellbeing is the quality of our social relationships.

Therefore, in many ways financial wellbeing is about how we use our money to support the other areas of wellbeing.

Know Thyself The first of those parts, a clear path to identifiable objectives, is financial planning.

One way of summing up financial planning, therefore, would be: work out what you want from life, then spend your money on that.

This aspect is often much more difficult than it at first appears. Most of us have been too busy with ‘life’ to really consider what we want. For some it is simply more of the same, a reassurance that their lives can continue without having to worry about money. For others it is about considering and identifying what is important for them, discovering their purpose. This might be identifying what their life will look like when work is no longer taking up most of their time. It might be a life of travelling or a life dedicated to helping others. The most fulfilling part is, perhaps, discovering how to live the life that you want to live; the life that will make you happy.

Financial planning then becomes essential to identify what steps need to be taken to enable you to live this life. It helps you to become financially well organised, to identify threats to this future and to remove those threats where possible. It helps you to identify how much you need to invest for the future; it helps you to identify how much risk you are comfortable with and how much risk you need to take.

Be aware that not all financial planners will take the time to help you to identify what you really want, they may only want to sell you a pension. Make sure you engage with a real financial planner who puts your financial wellbeing first (and not theirs!).

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PHONE LINE, BROADBAND AND INTERNET

James Flynn, Milborne Port Computers

Ithink that we’ve been here before, but there is no harm in an update to what is one of the biggest technology complaints. In the beginning there was dial-up (buzzing modem noise) with speeds up to 0.05mb (megabits) per second, and I think that this technology is now officially retired. Then there was broadband (DSL) with speeds up to 1mb and this was quickly upgraded to up to 8mb and, in more recent years, up to 20mb. Both of these were delivered to your house over the copper wires of your telephone line from the local telephone exchange, but the speed degrades over a maximum distance of 6km, so the unfortunate ones living down a farm track got a pretty bad deal.

Now we have fibre, or more correctly, we have fibre to the cabinet (FTTC) where super-fast speeds are delivered by fibre-optic cable to the little green boxes that have sprung up everywhere. Then the service is connected to your house over the good old copper wires. But unfortunately the speed degrades over a shorter distance of only 2.5km hence the need for loads of the green boxes. FTTC offers a huge speed hike of up to 40mb so it’s well worth it if its available in your area, and you can get up to 200mb if you pay the extra.

If you live in a big city then you can have separate phone and ultra-fast broadband (FTTP) service delivered to your house (like Virgin Fibre). As we live in the rural West Country, we can’t so I won’t say any more about it! Another option out here in the sticks is mobile 4G internet, but that’s for another article.

You can decide who provides this service (BT, TalkTalk, Sky etc), you pay them line rental and call charges. We also get our broadband down the same pair of copper wires and the service is split (filtered) where it comes into your property.

The best deals are usually to be had when you bundle everything together under one roof when you pay line rental, broadband and calls to the same provider. This is usually for a 12 or 18 month contract. At the end of your contract if you do nothing then you’ll move on to their standard tariff, just like gas and electricity prices, so it’s best to shop around. If, like me, you are a bit of a ‘rate tart’, then at the end of every contract period I take full advantage of the best introductory offer going at the time and change providers. Even if you’re not going to change providers for whatever reason, call them and ask for a better deal! All of my recent clients who were still on old ADSL (slow) broadband who called to upgrade to FTTC (superfast) broadband, found that their new package was in fact cheaper than the old, and included a new router as well… no-brainer!

As always, if you need help with this or anything else, you know where to come.