How much of your monthly income do you spend on living?

Beyond the essential living costs like housing, food, energy, clothes and transport, there is also likely be the ‘extras’ that make life both comfortable and enjoyable, like socialising, hobbies, designer clothes and holidays.

Where some people get into a problem financially is that they spend too much on the lifestyle ‘extras’ so they never manage to build much in the way of a short-term cash reserve or long-term wealth.

Throughout most of my adult life I’ve always strived to improve or maintain my life. Whether it’s maintaining good physical and mental health; cultivating my intellect and knowledge; building income and wealth; or developing personal and business relationships, I’ve always tried to be the best version of me.

A key part of my approach has been to set and write down a number of goals using the well-known SMART mnemonic acronym:

One of the central themes of my new book – Money Moments: Simple steps to financial well-being – is that we can all be better at managing our money if we really believe we can.

But it’s not just personal finance that this applies to, it applies to anything in life.  The term “turn your mind to” is often used to make the point that with determination, focus, effort and discipline we can master, or at least improve, any skill that we wish to.

Learning to cope with disappointments, setbacks, challenges and failures is an essential life skill to develop.

Few people have meaningful achievements, lasting success and life satisfaction without a fair degree of mistakes and mess ups.

My eldest daughter had set her heart on going to Durham University to read Classics and knew that they would probably require her to achieve three A grade A Levels.

I got speaking to a man called Albert in the changing room of my local gym the other day. I mentioned to him that I enjoy keeping fit and healthy, but as I’ve got older, I get a few aches and pains. He replied that although he has had to modify his fitness routine given his age, he still felt as fit as a fiddle.

In this live interview on Sky News in May 2017, I discuss the role that money plays in making us happy.

Believing that you are capable of doing something has been shown to be a major determinant of success.  Albert Bandura is a psychologist who introduced the term “self-efficacy” to describe the psychological phenomenon that enhances goal achievement. According to Bandura, a self-efficacy belief is:

“The belief in one’s capabilities to organize and execute the courses of action required to manage prospective situations.”[i]

In other words, if you believe you can do something you are much more likely to achieve it and if you don’t believe you can achieve it you are more likely to fail.  This means that as well as setting life goals that are important and meaningful to you, you also need to believe that they are achievable.

Over the course of my 25-year career as a financial adviser I was fortunate to have interviewed several hundred people and hear their life stories.  My impression was that only a small proportion of these people were successful in the sense that they were truly happy, fulfilled and financially secure.  

Some were wealthy but had poor health due to lifestyle. Others had many achievements to their name but were unhappy.

Over the 25 years that I was in practice as a financial advise, I conducted discovery interviews with several hundred people, where they told me their personal story. I have also had the privilege to hear the personal stories of a similar number of professionals from the fields of financial planning, investment management, law and accounting. On top of that I have read literally hundreds of biographies of political, business, scientific and charity leaders.