Financial Peace of Mind Is Not What You Think It Is

Financial Peace of Mind Is Not What You Think It Is

Financial Peace of Mind, © Matthew Cole - Fotolia.comFor those who would rather listen than read:

Audio Financial Peace of Mind

Financial  peace of mind.  My clarion call.

Do you know what it means?  Most people don’t.  It’s not about having a fortune in little bricks of gold.  Or lots of extra zeroes on investment account statements that allow you to float above the concerns of everyday life.

What is  Financial Peace of Mind?

My shortest definition is “knowing you will be okay for the rest of your life,” especially as you get into your 40s and 50s and start feeling your life force changing.  It means you’re not worried about having a roof over your head and food on the table in a place that feels safe and secure.

It means your lifestyle is affordable.  You have activities that can generate income if you need to supplement going forward.  You have a financial cushion of some sort, big or small.  You have rid yourself of major money-suckers like debt and spending habits that are not coherent with the life you want to lead … long term.

Young ones who start early on this path are fortunate, but their sense of urgency will be far less.  Those of us who start late may have to hustle a bit more to get all the pieces in place.  And we may have to let go of more things:  things that prove irrelevant.

The Story of a Late-Starter

I started late.  I have written about hitting the financial wall at 53.  Before that, what I did for a living made a difference in other people’s lives while being challenging and fulfilling to me.  I was living my greatest self and felt respected.  I was loved by someone I loved.  I was proud of what I knew and what I could do.  Sounds pretty good, right?

Wrong.  My life was a house of cards, ready to crumble:  If I ever got sick and could no longer “perform,” I’d lose the house over my head and would worry about food on the table.  And I knew I couldn’t keep up the pace forever.  One day it could crumble—and it did.

Losing my business and my perfect house gave me the opportunity to reinvent myself … healthily.  As I sat in a friend’s upstairs bedroom, surrounded by two cats, a huge cat tree and tons of cardboard boxes, I asked myself, “What is the one thing I most wished for when I was under so much external pressure and internal stress?”

The answer was “peace of mind.”  And the more I dug, the closer I got to knowing I had to start with “financial peace of mind.”  To move up through Maslow’s Hierarchy of Needs, I needed to have survival and security covered.

Maslow’s Hierarchy of Needs

The psychologist Abraham Maslow identified a scale of human needs that drive our behaviors.  To move up the hierarchy, you have to master or fulfill the need below it.  The definition of these needs can vary with culture, age and other factors, but here is a simple version of the hierarchy, usually read from bottom to top:

  • Transcendence (helping others)
  • Self actualization
  • Self esteem
  • Love and belonging
  • Security
  • Survival

You can determine where you are on the hierarchy by what is driving your choices in life.  If they are driven by fear, you are stuck in survival or security.

That is what makes Financial Peace of Mind so critical.  It is the magic door that opens—once biological survival and psychological security are mastered—so you can fulfill higher and higher needs authentically.  Without it, you may dabble at the other needs, but they will never feel completely solid.

How you fulfill those first two needs is entirely personal, with no right or wrong definition.  For Jane, it could be a simple life in a community that will always have her back … so she knows she will always be okay.

For Jill, it could be a luxurious home with security systems, and enough money in her accounts to know she can weather any economic craziness … so she knows she will always be okay.

Or anything in between.  What I know is that if either survival or security is on shaky ground, seeming to master any of those further up will feel tentative at best.

What Financial  Peace of Mind Looks Like

The result of Financial Peace of Mind is feeling grounded.  It’s feeling you are doing exactly what you want, when you want to.  Sharing the wealth of your knowledge.  Changing the lives of some demographic that’s special to you.  Or being available enough to enjoy your babies and grandbabies and to hopefully transmit some of the life lessons you learned the hard way, so they don’t have to.  Whatever it is, it’s all good.

No, it’s not working to exhaustion so you know you can turn off the “work” switch when you hit a magic number … be it 60 or 65.  And then moving into irrelevance where you worry only about whether Medicare will cover all your body’s boo-boos.  Or watching that retirement fund number with all the zeroes decline month after month.  (This last one actually turns life into a race between the years and the money left in the account.  Ouch.)

So what drives your choices?

How well have you insulated yourself from having to worry about having food on your table and a roof over your head … forever?

How well have you created a life where your particular need for safety is being met?

Lastly, how much thought have you given to opening those doors of Financial Peace of Mind that allow you to flourish … for the rest of your life?

Let us know in the Comments section below if you agree with this definition of Financial Peace of Mind.  And if not, why not?

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Bio: Sharon O’Day fixes financial lives. She is a tell-it-like-it-is money expert with a successful career in global finance, plus an MBA from the Wharton School. Today she specializes in getting entrepreneurial women over 50 back on their game so they can have more money, less stress and more joy. With her “Over Fifty and Financially Free” strategies, they take actions that lead to their ultimate goal: financial peace of mind.

  • robindavidman

    Sharon, you bring up some good points. I always enjoy your posts. You raise awareness and you leave me with things to think about.

  • Susan Schiller

    I’m on the rebuilding side, as you know, Sharon… after the crash at age 50-ish. It always seems to me that I’ve made so little progress, but as I read your article and ask myself the questions you pose, I realize that I have come a long way. A few years ago I would have thought being debt-free and having a savings would be impossible, but today it’s a reality and I know that if I just keep taking baby steps that one day I can have a stronger answer for these same questions. Slowly, as I read your website every week, I’m beginning to see the dawn after a long dark age. 🙂

    You know, what I love best about your story is that it has a new beginning at age 53. There is so much hope just in seeing that number… your story is very inspiring and gives me HOPE! 🙂

    • One of the reasons I keep mentioning my age when I hit the proverbial wall, Sue, is so other women understand that it’s certainly not to late to turn things around. And no matter how late it gets, anything you set aside is more than what you’d have in the future if you decided it was too late to make a difference, so why bother? It is NEVER too late!

  • marviadavidson

    Well, I’m working on getting all my life back in order and that includes my financial life. Thank you for this post. I always learn something new. I enjoy the story telling you weave into financial matters. It makes it easier to understand!

    • Congratulations on your job, Marvia! I know you went through a tough spell, but I honor your ability to stay positive and to use the time to learn and grow. Now, upward and onward …! 😉

  • I love your using Maslov’s pyramid with financial peace of mind, I had never thought of it this way before! Way to go, Sharon!

    • Barbara, I hadn’t thought of it either until I heard a comment on Sunday morning on a personal development type program. Suddenly, my brain went “tilt” and I realized that the Financial Peace of Mind I had been promoting for so long actually related directly to the first two steps of Maslow’s! Who said we ever stop learning? 😉

  • Wingate Wyndham Sulphur

    I agree with your definition and appreciate your posts so much! Each time I read a new one and am inspired to put steps into place to “insulate” my family. Unfortunately, it takes several times of making good points to actually get to the action part. For that, I am grateful for your posts and knowledge.

    • Heather, we all move into action at different speeds and for different reasons. But, as some who have been reading my articles for awhile will tell you, they all start making the right moves eventually! Or they stop reading because I become an irritant. As for me, I had no choice but to take action: I had no home, no business and very little money. Amazing what a little adrenaline will do! 😉

  • Always great points and great posts Sharon. Thanks for always making us think

  • I agree with you that financial freedom looks different for everyone. My idea of financial freedom is having no debt, including no mortgage, and being able to travel whenever I please. I’m not at that point yet, but I’m working towards it.

    • Keri, I wish I had had such clarity at your age; it took me decades to figure that out. Fortunately it wasn’t too late for me to still reach exactly that point, but it would have been far easier had I started sooner! Congratulations!

  • Tina Ashburn

    Financial Freedom used to keep me awake at night, but not any more. I learned there is more to it than dollars and cents. Now I work on One Day at a Time.

    • You’re right, Tina, it IS achieved one day at a time. (As long as you have clarity about what you are pursuing, and what stepping stones will get you there.) It’s not helpful to let it keep you up at night; you need energy to keep moving forward towards financial security while still taking joy in each day.

  • Kung Phoo

    I look into my future and i see financial freedom! Thanks for the post!

  • Martha Giffen

    What a good picture you paint! I like being debt-free, but to me, financial peace has come with the knowledge that I know how to make money. Running low? I know what to do. That has made all the difference.

    • That ability is embedded in “You have activities that can generate income if you need to supplement going forward,” Martha. Once you have that in place, which you do, anything else is just getting the other pieces in alignment, however YOU define that. 😉

  • I totally agree with your definition of peace of mind Sharon, and I do think that’s very personal! It is a pleasure to read your posts because they make us think and re-think
    our decisions on life! It was also a good exercise to review the Maslow’s Hierarchy of Needs! Thank you!

    • By it being personal, Meire, it makes it a more intimate piece of our dream, as opposed to striving for what someone else says we should want. Our goals, not someone else’s. Besides, I can’t feel peace for you, and you can’t feel peace for me. 😉

  • Padrica

    I’m loving what financial peace of mind looks like! Great post!

    • I’m loving what it feels like, Padrica! Worth every bit of effort …

  • Sue Glashower

    I agree with your definition of financial peace! We are debt free and it is such a great feeling. Next step is to continue saving for the future and helping our children through college. Love your financial advice!

    • How wonderful to hear how far along you are on your journey towards financial peace of mind, Sue. It’s a bit of a dance, as external life factors at times sway us one way or another. But if you’re clear on what the path is, it’s just a fancy step or two until you’re back on track. Congratulations to you and your family!

  • Terri Lind Davis

    I have acquired some degree of security in owning the roof over my head but still find myself worrying about the future as my retirement funds are low and my income has taken a dive the past five years. However, I am moving forward in creating some supplemental income and have learned to live with less. It actually has been very freeing to discover I can live with so much less but have hopes for earning more only that I may help others more.

    • Terri, what I learned by losing most everything is that I could simplify my life dramatically in order to get back on my feet, but that didn’t have to define me. Or my potential. As you’re living with less now (as a result of the impact of the past five years), instead of thinking it as limiting, think instead of the extra energy and peace afforded by that smaller monthly “nut” … so you can ramp up that supplemental income and make up for lost time.

  • I’ve lived on both sides of financial peace of mind – the place where you can do whatever you want, when you want, if you want, and the side where there is only faith to get you through the day. What I’ve learned is that both experiences are humbling in their own way. They help you define who you are, what you value, and what makes you feel happy and fulfilled. Financial peace of mind eliminates money worries, which is indeed a blessing. Having financial peace of mind and being happy and fulfilled, now that’s my goal 🙂 Loved your post Sharon – thanks!

    • The clarity you have around the concept of financial peace of mind will be invaluable as you strive towards that goal, Dawn. It will keep you from distractions … which are probably what trip up most people who lack your clarity. Best of luck!

      • Thank you Sharon. I really appreciate your feedback. It’s not always easy finding the balance, but I’m sure it’s worth the effort!

  • Kore

    wow I absolutely love your blog. Great job.

    • Thanks, Kore! Hope you’ll come back by for future articles … 😉

  • I thought I was in one phase of the hierarchy of needs and actually found myself reassessing those…at a moments notice. I’m not sure one can ever really be sure of having their affairs totally in order for that peace. Do I strive for it? Absolutely. But, I found that undue circumstances can befall us all and things change over night. At least I was and am on the path to becoming debt free and living without credit cards.

    • Carla, “debt free and living without credit cards” puts you miles ahead of most people. As for the other part, I know traction can be lost and things can happen. But as focused and persistent as you are, the safety buffer WILL build to give you that breathing space you’re looking for …

  • Meryl Beck

    Peace of mind is so important, especially around finances. Thanks for the post, Sharon!

    • You’re so very welcome, Meryl, good to see you here!