Financial wellness is all about considering the future, and exorcising the demon that makes achieving long-term financial goals difficult. (Image: Shutterstock)
When I got out of college more than 50 years ago, I had college loan debt equal to about one year's salary. I figured out how to pay it off, though I deferred paying it off for a couple of years so I could afford to buy a sports car. Did I need some financial wellness counseling back then? It might've helped, because my Italian sports car ended up needing multiple clutches and lots of other repairs—mostly because I drove it like a maniac!
At the end of July, I participated in a BenefitsPRO webinar on financial wellness. The title for my presentation was "Financial wellness is for everyone." (It's available on the BenefitsPRO.com archives if anyone wants to check it out.) Although this is also about financial wellness, we'll consider it from a different perspective.
Marty Traynor is an Omaha-based consultant in the benefits field.
This column's title is a bit of wisdom shared with me more than 30 years ago by Pac Briglia, who was one of the country's leading brokerage general agents. He was teaching me two lessons, one obvious and one important. The obvious lesson is that, as we look to the future, our imagination allows us to make all our problems go away. We don't want to think about things getting worse, so we tend to look at the bright side of what will come. I was headed that way during our discussion, describing all the great products and services the company I worked for was planning to develop. When he said "the future is an easy place to do business," I took it as a compliment.
Then I realized the important lesson. It became clear he was calling out the difficulty of making all those wonderful things happen within the bounds of reality. My rosy glasses gradually disappeared. It's easy to imagine success in the future, but very difficult to achieve.
Financial wellness is all about considering the future, and exorcising the demon that makes achieving long-term financial goals difficult. The demon is familiar. I want something today, and someone will give me the money to buy it. I will worry about paying it off tomorrow.
Behavioral writer Nir Eyal recently posted some great ideas related to this idea. Eyal published a workbook based on the behavioral concept of hyperbolic discounting, where people choose smaller, immediate rewards while deferring larger, later rewards. We reward ourselves today while ignoring the future cost.
Ironically, this is almost the opposite of imagining all the great things that could possibly be done in the future. It's easy to think how great the future can be, but when it comes to action, we tend to think in the now.
Financial wellness encompasses a lot of disciplines, and there are excuses for ignoring what we should do. Here's a brief list to illustrate:
- Budgeting (boring)
- Saving (difficult) versus spending (fun)
- Acting now (work) versus delaying (easy)
Excuses are used every day to prolong bad money habits and defer good financial planning.
As benefit professionals, we need to study all aspects of financial wellness disciplines. There are many available products, educational sources and financial planning services. We have the opportunity to consider them in light of the greatest needs of the employer's associates, and recommend an appropriate package to the employer. The future is an easy place to do business—but the present is the best time to help our customers shape it.
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