Chris Budd: “Studying the relationship between money and happiness adds an extra layer to financial planning for lifestyle.”

With a view to the term “holistic”, Chris Budd examines what financial planning really means and compares it with approaches used by the medical profession

Holistic is a strange word. It means dealing with or dealing with something and not just a part (according to the Cambridge dictionary).

Let’s look at some other definitions.

On the subject of matching items

Medicine: treating disease or injury.

Financial Planning: The activity of making decisions about how someone should manage their financial arrangements.

I would suggest that these medical and financial planning dictionary definitions already assume that they are holistic.

Treat the cause

If you are looking to treat a disease, you must certainly consider the cause of the disease. If the patient has pain in the arm, it may be because an arrow is sticking out (sorry, I watched Game of Thrones lock).

If you want to manage someone’s financial arrangements, you certainly need to understand what the money will be used for.

There is a strong comparison between medicine and financial planning. Both have focused on treating the symptoms, rather than the cause, to such an extent that whole new areas of study have emerged to address what is not covered.

Studying only technically

It takes many years to qualify as a doctor. You have to learn so much detailed knowledge about how the body works. However, there is currently little or no need to study the effects of lifestyle on health.

To be approved as a financial planner, you have to learn so many things that are actually never used at work. In order to qualify as a financial advisor, complex investment and tax rules are required. And yet, paraplaners and investment committees often take on the complex work.

However, there are minimal requirements for a counselor to learn how to help a person find meaning in their life with their money or build a better relationship with money.

Lifestyle prescription

In medicine, lifestyle prescribing is becoming more popular and recognized. If a person is affected by a particular disease, it is certainly worth looking at that person’s lifestyle to see if this contributed to the disease. That way it can be treated in a really holistic way and it can be prevented from happening again.

This is the work of the Penny Brohn UK Cancer Center. You talk about providing a holistic approach to treating people diagnosed with cancer. This is not an alternative medicine – this is complementary.

Lifestyle planning

In the past decade or more, financial planning for lifestyle has increased. It’s about the place where money plays in someone’s life.

As with lifestyle prescribing, lifestyle financial planning does not need to be preceded by the word “holistic”. that’s already assumed.

Financial wellbeing

Studying the relationship between money and happiness adds an extra layer to financial planning for lifestyle. It takes the academic research that has been available for many years on what makes us happy and the impact money has and applies it to the financial planning process.

In theory, financial planning should already be holistic. It should already focus on the lifestyle and principles of money and happiness.

Given that we’ve got so far removed from such principles and so focused on technical knowledge, the study of financial wellbeing becomes an important part of the toolkit for anyone who wants to take their advice holistically.

Chris Budd chairs the Financial Wellbeing Initiative; The annual conference takes place in May

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