For those who would rather listen than read:
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.