Maslow, Money & Happiness

We’re diving into Maslow’s famous hierarchy of needs – you know, the pyramid that breaks down what humans need to be happy, starting from food and shelter all the way up to self-actualization. But here’s the twist: we’re throwing money into the mix! Does having more cash help us climb the pyramid, or can it sometimes hold us back? We’ll explore each level and look at real-world examples of how finances play a role in finding happiness. Get ready for an insightful, practical, and fun conversation on how money fits into the bigger picture of living well. Along with some cracking Tightasstommo money saving tips you do not want to miss. . .

Welcomes & Introductions

Haven’t read Chris Budd’s Financial Wellbeing books? Take a look here

Want to have a chat with Tom Morris and the team at Ovation? Contact details here

Whats on Todays Podcast?

The psychological model of Maslow’s Hierarchy of Needs and how it connects with our money and happiness for a link with financial wellbeing.

Tight Ass Tommo

Featuring Chris’s scaffolders dodgy washing up tips and David’s new shopping habits.

Tip of the week – Producer Tommo has a money saving tip for kids lunches in the summer holiday, just in time for back to school!

The Main Event – Malsow, Money and Happiness

Understanding Maslow’s Hierarchy of Needs
Breaking down Maslow’s model and its relevance today.

The Role of Money in Fulfilling Basic Needs
How finances impact Malsow’s survival and safety.

Money and Self-Esteem: Striking the Right Balance
Can wealth boost self-worth, or does it sometimes get in the way?

Maslow on Achieving Self-Actualization: Does Money Help?
Finding fulfillment and purpose—what role does financial security play?

Maslow’s Hierarchy: Is It Still Relevant?
A look at exceptions and updates to the original theory.

How Financial Planners Can Guide Wellbeing
The role of advisors in helping clients balance wealth and life satisfaction.

Universal Income and Basic Needs
A case study on how income support can improve lives and productivity.

Why Focusing on the Essentials First Matters for Happiness
How to decided the right financial and emotional needs for long-term wellbeing.

(cover image created by Dall E)

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Episode Transcribe:

David Lloyd joins Chris Budd for another episode of our financial wellbeing podcast – Malsow, Money and Happiness

>> David Lloyd: Hello, everybody, and welcome to another one in our incredibly long running series of financial wellbeing podcasts. I’ve got a bit of a cold, so I will apologise in advance if I sound a little bit throaty. However, I’m still keen to get going. My name is David Lloyd, by the way. I’m a broadcaster, I’m a writer. I’m kind of retired now. I don’t do so many of these things that I used to do. However, one of the things I do do is get together every so often with a couple of mates and talk about money. And let me introduce those mates to you now. Chris Budd. Who are you?

>> Chris Budd: hello, David. who am I? I am, a, new trustee of St. Peter’s Hospice, which is fun. I’ve got a few things going on, actually, that started to happen, but I’m also the writer of the original financial well being book back in 2015. I wrote that now, which is an awfully long time ago.

Congratulations about the hospice trusteeship, then. Tell us a little bit more about that

>> David Lloyd: Congratulations about the hospice trusteeship, then. Tell us a little bit more about that, if you would.

>> Chris Budd: Well, somebody, got in touch and asked me if I’d be interested. I do various non exec and trustee things and, I do a bit of space. One of my friends, somebody you know as well, David, he just told me a long time ago that, he wanted to spend his working life three days a week in work, one day a week community, and one day a week charity.

And I thought that was a really nice way of apportioning one’s time. So, yeah, I had a space for a trustee role. I haven’t started it, I hadn’t had my first meeting, but, obviously trustee, hospices, are charities and, an awful lot of volunteers and support. So, yeah, it’ll be a very interesting little thing to get involved in.

>> David Lloyd: And I think you are the ideal person, if I may say so, Chris, to be doing that sort of a role. So.

>> Chris Budd: Lovely man you are.

>> David Lloyd: Well, I do my best. I do my best.

Chris: Today’s podcast is looking at Maslow and his hierarchy of needs

Talking of lovely men, we’ve got Tom Morris in the room with us as well.

>> Producer Tommo: I have no new roles, so it’s the same old. I’m, director and chartered financial planner over at Ovation finance in Bristol, who, as you should all know by now, support this podcast. So there you go. not really much more to add than that this time, David, I’m afraid. Yeah, I know.

>> David Lloyd: I choose. I prefer to choose the word reliable.

>> Producer Tommo: Yes, reliable. I like that.

>> David Lloyd: I mean, you know, you and I can be a little bit mercurial sometimes, Chris. you know, I might even say away with the fairies on occasion. Whereas Tom is reliable, solid wise. He is the. He’s the bedrock of everything that we do. And if it wasn’t for people like Tom, this podcast would, quite frankly, be a mess. And, also, of course, producer, Tammy, who’s there in the background as well. Without her, the whole thing would be non existent. Anyway, I’m getting boring now, so let’s move on. what’s on today’s podcast, Chris?

>> Chris Budd: Today, David, we are going to be looking at Maslow’s hierarchy of needs. It’s an old psychological model, I think you call it, for why we do things and in what order we do them. Pretty well known, I think. But I thought we’d have a look at it in the relationship to money and see whether money helps or hinders how we go about satisfying those needs.

>> David Lloyd: Sounds fascinating stuff, Chris.

Tom Morris comes in with a money saving tip every episode

But before we move on to the, main event, we ought to go for the thing that we always do. Actually, you could call this the main event. It’s the tight ass tommo tip. We have our champion of cheapness, Tom Morris here, who, every, episode comes in with a money saving tip telling us how we can save money on some things. Before we do that, Chris, have you got anything to contribute to this particular section this week?

>> Chris Budd: Yeah, I do, actually. We’re having a bit of work done in the house, and I asked that the guys doing the work, if they. What they were like with money, chat with them about money, and they were very, very funny, I have to say. Turns out, Tomo, I think your crown is in danger of being stolen because one of them is the most tight ass burst I’ve ever heard in my life.

I’ve got two tips from him. He got rid of his dishwasher and washes up stuff by hand because he thought that that would be cheaper. I’ve got no idea. He has no evidence whether that’s right or nothing. But he doesn’t fill up a bowl of washing up liquid. Oh, no, no, he does. One cup at a time, and he will fill up one cup with hot water with a little dab of washing up liquid, wash that up, pour that up into the second cup, then pour that into the cereal bowl. So he only uses one cup of water to his entire breakfast, washing up. How about that for tight?

>> David Lloyd: Does he live on his own?

>> Chris Budd: No, he’s married. He also told me with a huge pride, I can’t tell you the swelling of his chest when he told me that he fixed his energy price last month just before the price went up. And as a result he saved himself, one pounds per month.

>> David Lloyd: Good for him. Well, it’s good to know that tight arsenal is in existence throughout the country.

David says he’s recently retired and has been looking at ways to economise

All started by tom. I’ve got one actually this week, kind of slightly more boring and it’s a bit of an obvious one. and a lot of people will go, well, hang on a minute, didn’t you know this? And of course I didn’t know it, but I didn’t do anything about it. So, as I alluded to in the introduction to this podcast, I’ve kind of recently retired, not necessarily out of choice, but just because the programme doctors that I used to write for has been cancelled by the BBC.

And I do do little bits of work here and there. I do a little bit of teaching, but I’m going to be 70 next year and I’ve started to reassess my life and thought, hang on a minute, do I really need to be out there chasing more work? No, I don’t.

I think it’s probably time to just, you know, unwind a little bit. And indeed, Tom is my excellent financial advisor and I have been having conversations around this and how to prepare for the next stage. but one, of the things that my partner and I looked at was, ah, our monthly expenditure and thought, okay, now, I don’t have the big cheques coming in that were coming in before we are financially comfortably off, but we started to look at how we could maybe just economise a little bit.

And I’ve realised that by shopping in a slightly different way, I can save myself hundreds of pounds a month by, not going to Waitrose, which is a starter, which is our local supermarket, where we always used to go, great supermarket, fantastic choice, but it’s not the cheapest. And by not going to the shops every other day, which is what I tended to do, so now I do a weekly shop at Lidl. other cheaper supermarkets are available. And all of the stuff that I would routinely buy at Waitrose, like soap powder and everything and things like that, you would get because you’re doing your weekly shop there, I’ve realised it’s half the price.

And so now by shopping once a week at planning the budget a little bit more, planning our meals a little bit more, because I do most of the cooking, I am saving, I reckon, between four and 500 pounds a month on our food and drink bill, which has been a real, I only been doing it for a month, but it’s been a real eye opener, realising that these low cost supermarkets do sell decent quality stuff that is a hell of a lot cheaper than the more top end ones.

>> Chris Budd: Wow, that is amazing David.

Some basic budgeting tips are really important for young people going to university

That actually fits in with something that I just wanted to touch on, in this section, which isn’t tight ass tommo, but it is in this kind of area which is that students are ah, going to university either back or for the first time at the moment. And I know I know my son won’t listen to this podcast so I can get away with it, but he was given some money by his grandmother when he went off to leave home 1st, 1st time, and he spent it all on Deliveroo in the first two weeks.

So some of the things that we might take for granted, actually stuff like some basic budgeting tips are really, really important. So I’m not sure too many 1819 year olds will be listening to this podcast, but lots of parents of those would. And it is worth just sitting down with your kids and just giving a few basic tips that we might m take for granted of how to save and how to make your money go a little further.

>> David Lloyd: And you’re never too old to learn these news as well. And it’s interesting that yeah, well we could afford to carry on going to Waitrose, but actually if I’m saving that amount of money every month, then I can start to put that money towards holidays and more fun things. So anyway, that’s my little, that’s my, we’ve all had a little tight ass tommo tip, but now let’s go to the main man himself.

Tom has a brilliant tip for parents during the summer holidays

What have you got for us, Tom?

>> Producer Tommo: It’s food related actually, and it’s related to a supermarket, a different one. So we just had the summer holidays and I had does it just the end of the summer holidays and my wife had gone back, it was an inset day at school. She’s a teacher, she’d gone back the day to work. So I had the children on my own for the, for the day and the first bit didn’t save any money because I promised them that we could go and buy some toys at the toy shop, because they’ve been very well behaved for the last week or so, and they’ve been excellent children in the summer and all of that.

So we went out to the toy shop. I thought, oh, I got to save some money somewhere else then, haven’t I? So just opposite the toy shop was Morrison’s. And parents or grandparents or anyone’s got children with them. If you eat in their cafe and you spend five, at least five pounds on their menu, the children eat for free. It was remarkable value. So I had a lovely, lunch, a cup of coffee, and, they ate for free. So all the family less than a tenner. In the end, it cost us.

>> Chris Budd: Wow.

>> Producer Tommo: To eat.

>> Chris Budd: Is there any age limit on children?

>> Producer Tommo: Wow. I don’t know how. It’s the children’s menu. So as long as the person you’re bringing can deal with, you know, one of those or a squeezy yoghurt.

>> David Lloyd: It’s, my son’s 36th birthday coming up. I’m going to take him to Morris.

>> Producer Tommo: There you go. There you go. but also, if you googled, meal deals during the school holidays, it’s amazing how many restaurants actually do, do a lot of cheaper, children’s meals during the, holidays. And it’s great because I think a lot of places recognise the costs of summer holidays.

>> Chris Budd: Fantastic tip for the summer holidays that have just finished tomo. Brilliant.

>> Producer Tommo: All right. That is true.

>> David Lloyd: By the time this goes out, it might be half term, so you never know. Right, okay, fascinating stuff.

Tom: Tell us about Maslow’s hierarchy of needs, Chris

so, let’s move on to the, main part of our podcast, then. Tell us about Maslow’s hierarchy of needs, Chris. as I said, the introduction, I’ve heard of this, but I think we could probably do with a reminder about what it’s all about.

>> Chris Budd: Yeah. Okay, so, look, back in 1954, so this has been around quite a long time, a psychologist called Abraham Maslow suggested that human needs can be placed in a certain order. The idea is that we are motivated to fulfil one type of need, such as food. And until we have fulfilled that type of need, we’ll struggle to go on to the next one. Hence the phrase, the hierarchy of need, the order of needs. And I thought it would be interesting to review the hierarchy and then add money into the mix, and we’ll see whether it can help or whether sometimes it might actually get in the way of moving up that hierarchy.

>> Producer Tommo: This is actually a very real issue. I see with clients. All the time, someone is spending their money satisfying one need before they’ve already satisfied a more basic need, then this may, well be making them unhappy.

>> David Lloyd: Well, now, that’s interesting. Let’s hear about these different needs, and then perhaps we can come back to that. Tom, that’s quite fascinating.

Maslow says people should focus on five basic needs first before achieving anything

So, Chris, I would imagine that we’re going to start off with things that we need for survival, such as food, drink, shelter and so forth.

>> Chris Budd: Yeah, exactly. Maslow called these our, basic or physiological needs. It seems logical that if you don’t have air to breathe or food to eat, then nothing else is really going to matter that much until you get them. Once we have these, then the second thing up the hierarchy that we think about is our safety or security. So that could mean, for example, finding shelter, but it can also refer to having some sort of order, having some sort of control over our lives.

>> David Lloyd: So we’re saying that if you were going to prioritise your actions at the most basic level, then you’re going to make sure that you have food before a roof over your head. Yeah, that makes sense.

>> Chris Budd: Then once you’ve got a food in the roof, then the third comes love and belonging. So we’re talking about friendship, trust, receiving and giving of affection.

>> David Lloyd: Now, you’ve often said, chris, in this podcast, that, the quality of our social relationships is a key foundation of our happiness. And yet Mister Maslow is saying that that’s third in his criteria of needs.

>> Chris Budd: Yeah. So, look, in 1954, he first came up with this, and it’s important, I think, to clarify that Maslow didn’t suggest that this was especially strict hierarchy. It’s not like I, know, video game, where you’ve got to complete one level before you can get to the next. So people will sometimes stay in an abusive relationship because their need for love is stronger than their need for personal security. So it’s about priorities and about where we focus our attention. It’s a model that we can use.

>> Producer Tommo: M I can certainly imagine that somebody who doesn’t have food or shelter, is going to try and get them before they start worrying too much about their social relationships.

>> David Lloyd: Okay? So let’s not get too distracted about the exceptions, but just acknowledge that there are some and that this is about priorities. So we’ve had, food, water, shelter, love and belonging. What’s the fourth tier, Chris?

>> Chris Budd: So, the fourth tier, once we get those through those first three, is self esteem. This could include ideas of self worth, of accomplishment, of having respect and giving respect.

>> David Lloyd: you described the first two basic needs as being physiological. love and self esteem. Feel like they’re more psychological.

>> Chris Budd: Yeah, exactly. And that’s what Maslow called them. So we go from our physiological or basic needs and then to the psychological needs. The final of the five tiers that we then reach after self esteem is what Maslow called self actualization. And in this area, we’ve got things like creativity and achieving one’s full potential.

>> David Lloyd: Well, that sounds ambitious.

>> Chris Budd: Yeah. And look, one would argue that you should never achieve your full potential, because then you find out exactly how limited it might be. So Maslow, he didn’t think that everybody would even reach that stage, particularly not permanently, but you might achieve that level at certain moments, such as a sporting triumph or a particular achievement.

>> Producer Tommo: I love my sport. This gets me thinking. and I wonder. This self actualization level suggests that if somebody wants to achieve something, then they should prepare for it, by making sure that they have food, security, love and self esteem first. Is that common?

>> Chris Budd: M makes absolute sense, I think. if you’re training to be in the Olympics and you’re not looking after your body with food, well, then you’re going to struggle to perform. Listeners might want to go back to the interview with Olympic diver Leon Taylor in episode 99, who talked about how his performance improved once he started caring for himself and took time to relocate. The joy in what he was doing. One of my favourite episodes that we’ve had.

>> David Lloyd: Yeah, I do remember that now you come to mention it.

Maslow’s hierarchy of needs has some flaws, but it’s still useful

But before we look at how money might help us move up this hierarchy of needs, I’ve got a few questions. now, I know you said we mustn’t be too dogmatic about how we applied it, but it does seem that there are some flaws. For example, surely somebody could fall in love whilst being hungry.

>> Chris Budd: And look, if you look online at, Maslow, then you do see a lot of people criticising the model for that sort of thing. And to be fair, Maslow did say that you have to complete one level before the other when he first published it. But that was in 1954 and he continued to refine it over the years, many, many times. And as late as 1987 he said that the hierarchy is not nearly as linear as he may have earlier, implied. But I don’t think that makes it unuseful. I think the principle is still a really, really good one.

So it doesn’t need to follow a strict progression and you can feel various needs at the same time. Like the example you’ve given a creative person might focus mainly on the top tier self actualization to the detriment of not having food. So you think of somebody like van Gogh or maybe, you know, some of the tortured soul. So, But actually those, exceptions tell us more about the human nature and makes the model even more useful and relevant, I think.

>> Producer Tommo: Yeah, yeah, I’d agree. One of the things I do like about this model is that it takes a very positive approach to human behaviour. You know, so often we focus on what goes wrong. For example, all the behavioural biases that we talked about in this podcast so often, and they are really important, of course. But as well as knowing that you know, what not to do, it’s also really helpful to know what we should do.

And I think this hierarchy gets us to think that way. for example, we might think, have I got something in place so that a certain level is in good shape, which will then allow me to think more about the next level up. I find this really helpful for both myself, but also when talking with clients, when they’re thinking about their futures.

David says financial wellbeing is often only focused on these two basic needs

>> David Lloyd: Okay, so let’s put money into the equation then. how do you want to approach this? Is it how money affects each of these five levels, or whether it helps us to feel secure at one level, move on to the next one, or maybe actually prevents us from getting past any particular level?

>> Chris Budd: I think all of the above may well be true. Let’s have a look at some of the theories about the relationship between money and happiness that we’ve looked at over the years. Let’s slot them into Maslow’s model and see if there’s anything we can learn.

>> Producer Tommo: I think the first two, the basic needs, are going to be fairly easy to plan around. Clearly, if we don’t have the basic necessities of life, such as food and shelter, any money we have is going to, is going to be focused on getting that. And if I may just think about when I’m doing retirement planning, in particular with clients, it’s great if we can secure a lot of that basic need.

Some people here might be familiar with the idea of guaranteed pension income thinking like state pension, maybe annuities, or a final salary pension you’ve got through work. It’s really nice if we got some of that in the mix. That means our basic Maslov’s needs are met, so that if anything goes wrong, we’ve got those things absolutely solid in the plan.

>> Chris Budd: Yeah, I do a lot of talks at conferences, and I do, workshops and webinars on wellbeing. And quite often, and I would be talking about importance of meaning and purpose and social relationships. And at some point, somebody very often puts their hand up and says, look, it’s all very well for you to say this stuff, about having.

You’re dealing with people with lots of money. What about people with no money? And this is a very valid question, and this is the answer. Yeah, absolutely. You’ve got to secure those first two first. So, I realise it can be a bit patronising sometimes, how we come across, so there will be times when someone is struggling with a bit more money would simply make their lives easier.

>> Producer Tommo: Can I just jump in here? I just want to make a point that financial wellbeing is often only focused on these two levels.

>> Chris Budd: Yeah, very good point.

>> Producer Tommo: And we’re talking about financial resilience, arguably here. So a lot of the next levels is actually the wider subject of financial well being, not just these first two levels. Although very important, as you mentioned, Chris, when you’re seeing financial well being talked about, are they just focusing on those first two levels? Anyway, sorry, I have a bee in my bonnet.

>> David Lloyd: don’t apologise. I think that’s a very good point and I think I might be able to add to that. I was reading something the other day about an experiment in Kenya, which looked at the impact of money on poor people. Now, I made a note. It was a website called give directly, and 200 villages were given some income that would enable them to cover these first two steps of Maslow’s hierarchy, so that they knew that they had food and shelter secured. Now, rather than making the villages lazy, as some thought it would, the villages actually responded by working more, even becoming more entrepreneurial.

Now, I know there’s been lots of research on this universal income idea, and we’ve discussed this in the podcast, in the past, but it does seem to me that if you literally have nothing, getting enough to achieve those two basic needs can be really tough. But if society ensures that everybody has food and shelter, then surely moving on to the next stage becomes that much easier.

>> Chris Budd: Yeah, it’s a really interesting topic, David, and, one that can rather divide opinion. There are those that say that we shouldn’t provide any support at one extreme, because if you have nothing, then it’s going to make you go out and get something, and it engenders the work ethic in the poor. And then there’s others who believe we should help those who need it give a leg up so they can start being productive for themselves and for society.

>> David Lloyd: Well, I know which side I’m on.

>> Producer Tommo: Seconded.

>> Chris Budd: So what I like about the research you mentioned, David, is that it sidesteps politics and uses psychological models such as Maslow’s to explain why some support for those who need it actually can be a good thing for everyone.

>> David Lloyd: Yeah, this is the whole culture wars thing, isn’t it? About some things are made political when they really shouldn’t be political at all. We’re just looking at basic needs for people. let’s move on to the first, psychological levels, love and belonging.

>> Chris Budd: So we’ve got lots of research to back this one up. let’s take for example, the Harvard longitudinal study on happiness, where you may remember they’ve been following the lives of thousands of people over, I think, probably 80 years now, asking them on a two year basis, I think it is, about their lives, what’s making them happy or unhappy. And if you remember, what they found was that people who reported the greatest levels of well being were those that had the strongest quality of their social relationships.

>> David Lloyd: And did money make a difference?

>> Chris Budd: Not really. Not to that. when young, when first asked, people had predicted that money and fame would be the biggest determinants of their well being. But the wealthiest people didn’t declare themselves any happier than the poorest people. And the famous people were no happier than the rest of us.

>> Producer Tommo: Well, you and me, Chris. David’s actually quite famous.

>> Chris Budd: Oh, yeah, good point, good point.

>> David Lloyd: Actually, I dispute that. I was very nearly almost famous in 1992. but, I think, I mean, what is fame? I don’t know. I don’t know.

>> Chris Budd: And that was. We should just mention what that was, that fame that was made Marion and her merry men the tv show, was it not?

>> David Lloyd: Indeed it was, yes. And, the only. And so for a while, that was a much loved and well watched, tv programme that I was one of the main characters in. And it was great, great time in my life. in fact, one of my claims to fame now, is that I’ve appeared as an answer on pointless, being, contestants were asked to name somebody from Maid Marian and a merry man.

>> Chris Budd: Oh, tell me you’ve got some points.

>> David Lloyd: No, I’m pointless. I was pointless. So on one. So that’s how famous I am. So on one level. So on one level, I’m absolutely chuffed that I’ve appeared as a pointless answer on pointless. However, sadly, the answer showed how unfamous I am.

Rohan and Steve got triple pointless answers in the final

>> Producer Tommo: Well, I might take this opportunity as we’re talking about pointless, to see, to test if one of our friends, Chris, listens to this podcast and, you know, talking about Rohan, who one pointless with a, with another person we know, Steve Nelson, they got the triple pointless answer in the final, so they. Well, Steve did. Rohan was just there for the ride, I think. So, yeah, you’ve had the shout out. You’ve got your trophy Rohan. So this is the test of whether you actually, thank me for the shout out. See if you listen to these podcasts.

>> David Lloyd: Brilliant. Okay.

Chris: Money makes no difference to finding love and belonging, David

Anyway, enough about my fame or lack of it. So, what you’re saying is that money makes no difference to finding love and belonging. So one needs some money to get through the previous two stages. So do we need money to get past this level?

>> Producer Tommo: I think money can make achieving this level easier. I know with clients that I work with, they are able to prioritise helping their loved ones. This could be able to be able to afford a plane ticket, to go travel and see their kids if they’ve moved abroad, for example, or to pay for a wedding which brings families together, or, heck, even going out for a meal with them m on a Sunday, Sunday afternoon and being able to pay for it.

Now, money can make a difference here, but what’s important in this section, I think, is prioritising. I’ve seen plenty of elderly people sitting on more money than they need and who are afraid to give some to the kids or grandkids, perhaps to help them buy their first home. A bit of a chat and some financial planning can make a big difference to those people.

And a phrase I really enjoy is this, money is going to go to them eventually. If they’re hoarding it, do you want to be given with a warm hand or a cold hand? So if you’re this person, bear that in mind.

>> Chris Budd: Brutal. That’s great.

>> David Lloyd: Yeah, it’s a very good analogy there. But presumably this is only with people who haven’t had financial advice before, because any financial advisor such as yourself, Tom, and you’ve done it with me many times. And, indeed you too, Chris, would have this conversation with a client who was like that, wouldn’t they?

>> Producer Tommo: actually, not necessarily, unfortunately. I actually refer to the last episode with Doctor Tom and he talked about well being maximizers and performance maximizers. if I just explain you’re familiar with cash flow forecasting, David, because, we do it for you and the conversations that we have to build that forecast. But for those listeners who aren’t familiar with this phrase, this is where we use some software and our knowledge about areas such as tax and investments to forecast whether your assets and your financial plan is sufficient for the life you want to lead.

Important there, the life you want to lead takes a lot of delving in and conversation, you know, this includes whether giving some money away will cause a financial problem or not. Not all financial advisors use cash flow or even have those curious conversations, arguably. You know, in fact, many don’t use cash flow. They just advise their clients about their money, not their lives. That performance maximizer. So I’m not then. I don’t want to denigrate our profession because there’s amazing people in it. But if you are looking for these answers, make sure you’re working one. Who’s going to be curious about the life you want to lead. And using cash flow.

>> Chris Budd: I hear some financial planners say they don’t use cash flow because their clients are already wealthy. They, say their clients don’t need it, which I really disagree with. Because if you have a cash flow which shows that you’ve got enough, and, maybe even there’s an amount of money you won’t ever need, then you can use that extra money to benefit others, either as Tomo described, by helping your loved ones, or it could be through philanthropy, for example.

>> Producer Tommo: Yeah, I always get that. That’s a real mouthful, that word, Chris.

>> Chris Budd: Philanthropy. That makes it even worse.

>> David Lloyd: And we haven’t discussed plenty of for a long time. Chris, could we look at that again?

>> Chris Budd: I made on it like a carbonate. Leave it with me.

David: Youth is up to 40. Old is 65 and over

>> David Lloyd: now, Chris, we’ve talked about this before. That’s a meaningless phrase. I know. It’s one of your favourite ones. It’s talking about pointless things. It’s entirely pointless. Please don’t ever say that again.

>> Chris Budd: But I’m down with the youth, David.

>> Producer Tommo: Oh, dear God. Is this where I now step in?

>> Chris Budd: David, if you’re claiming to be youth still. I mean.

>> Producer Tommo: Well, that’s true speaking, he is. Yeah. I’m still the right side of 40, Chris. For a few years. Yeah.

>> Chris Budd: I actually looked that up the other day. Youth is up to 40. Middle, age old. David, you’re not gonna like this is 40 to 65. Old is 65 and over.

>> David Lloyd: Pardon? Right, let’s move on.

Can money help us find internal self worth? I think the answer is yes

Level four, self worth, a subject we’ve covered often.

>> Chris Budd: We have. And we know from various sources that there are two types of self worth, internal and external.

>> David Lloyd: And can you remind us what those sources are?

>> Producer Tommo: They are a lot. is the answer. But, here is a few. The book of joy, I know Chris’s favourite by the Dalai Lama and Archbishop Desmond Tutu. This is very buddhist type concept, but. But really, really helpful. We’ve, also mentioned intrinsic and extrinsic motivations many times, which is a similar principle that was covered in the interview with Tim Kasser in episode 46. And also the one on self determination theory in episode 77. So there’s some resources to get your teeth stuck into.

>> Chris Budd: So let’s apply them. Can money help us find internal self worth? I think the answer is yes, but it does take real thought and planning. So, for example, we might, want to look at how we allocate our time rather than our money. I mentioned earlier on about the friend who sold his business and then decided to spend his working week. One day charity, one day community, three day business. So that is related to. And he can only do that because he sold his business and had financial security, but he then used that to allocate his time.

>> Producer Tommo: I love that idea. I really like it. Allocation of time is something we often discuss with clients at ovation. you do, however, need to have some money to have that flexibility.

>> Chris Budd: Yeah, so money can certainly help. but I’ve also met plenty of wealthy people who have enough money, but who then focus on continuing to accumulate more wealth rather than reallocating their time.

>> Producer Tommo: Which reminds me of the comment from, if you remember, Sonia Leah Burmerski. when we looked at set point theory, how can we change our long term level of well being? But it requires intentional activity to do that.

>> David Lloyd: So money can help achieve self worth, but only if we work at it. And as you say, though, it must also get in the way a lot of the time.

>> Chris Budd: Yeah, and that’s the external self worth. So, this is why we need to work at it. If somebody’s self worth is based on their net worth of, then there’s no end point. we end up in a cycle of having to constantly accrue more wealth in order to impress other people and thereby get our sense of external self worth. If our happiness is always on the other side of somebody else’s approval or admiration, then we can never really achieve happiness.

>> David Lloyd: So I could see how it would be very easy to get trapped in level four if we just see money as an objective.

>> Chris Budd: Yeah, absolutely. It’s back to that question of whether M more money will make m us more happy. And the answer is yes. If you’re somebody who needs more money to be happy, and if you are that person, your life will be focused on accumulating more money or more stuff in order to keep feeding that need.

>> David Lloyd: Okay, well, then let’s now move on. Look at level five, this self actualisation. Now, I’m not honestly sure I totally know what this means.

>> Chris Budd: It is a bit nebulous. fulfilling your potential is one phrase that Maslow used in whatever arena that might be. So, for a creative person, David, like you, for example, it will be spending out your time being creative. You’ve had a long and we think we’ve agreed, I’m going to use the word successful. I’m going to go out there successful career as an actor and writer. So I’d say you’re a very good example of this.

>> David Lloyd: Yep. I’ll take successful, famous, I’m less sure about. I certainly, you know, within the within the context of the industry in which I work, I have been quite successful and I’m very grateful for the success that I’ve had. I’m also now though, as I move into a different phase of my life, having to reassess, what makes me tick, because that creativity, I’m not using it in the same way that I used to.

And I’m about to start writing another novel actually, because I’ve realised that without having that there, with somebody saying to me, you’ve got to go and write this thing now, which is what I’ve always had. When you’ve written that thing, we’ll give you some money.

Which is always a great motivation for me. I need to find an internal motivation for me to sit down and continue to be creative in a way that’s always made me feel good about myself. So I just having to reassess how I approach that.

>> Producer Tommo: Yeah, yeah. you’re spot on. I mean, this could be a big issue for people moving from one phase of their life to another. An obvious example, and you’ve given it, is retirement, but it also could also be career change or career break for, example, starting a family. It’s easy to get dragged into focusing on the money at this stage, for example, whether you have enough for retirement. But actually we need to think about what we’re going to be doing in retirement. But it’s also important to consider this self actualization point as well.

Again, taking retirement as an example, you go from being someone with work colleagues and a meaningful job to being someone who is classed as retired. Having a period of adjustment can help, such as reducing hours a bit of a phase into it, or leaving a job to do a, part time consultancy for a while. It could be helping a charity or mentoring some way of phasing your way into retirement.

Preparing yourself for retirement, in this way means considering what you’ll spend your time doing for well being and only then creating that cash flow forecast. And I mentioned that financial plan to see if it’s achievable. But we really have to think about how we spending our time if we’re going to transition to doing something else.

Having meaning and purpose in life is key to well being

>> Chris Budd: Another word Maslow used to try and get clarity on the self actualization is he’s talked about people feeling fulfilled again. We talked a lot in this podcast over the years about having meaning and purpose in life is one of the key sources to well being and these intrinsic motivations that we’ve mentioned. and this is not necessarily something that needs money, getting involved in the community, for example. So that’s helping at a local sports club, school governor, you know, David, I know you’re a parish councillor, these sorts of things don’t need money. it could be feeling fulfilled creatively, which I found from writing novels, which you can do in your spare time.

David, you and I are setting up a youth cricket section of our local club. A, friend of ours, David mine, is a surgeon and he makes amazing pots in his spare time. So there’s lots of things that you can do that doesn’t need money that will make you feel fulfilled. So I think possibly this is the one area that money is more likely to be a distraction rather than being something that will help you achieve it.

>> Producer Tommo: Yeah, there’s lots of ways getting well being once you’ve got to this level, but it firstly takes at least some attention to the previous levels and not too much focused on accumulating money for its own sake. So it’s a real balancing act going on here, in my experience. It also helps, rather I would say this, to have a third party, such as as your financial planner challenging you in order to get this balance right, and create, we talk about it creating a clear path to identifiable objectives, one of the key five pillars of financial well being.

>> David Lloyd: And there we have it. I think that wraps it up quite nicely, actually. I found it a really fascinating conversation today, actually talking about the various, aspects of this and trying to pull it all together. We’ve all got different life experiences that we’ve been able to bring to our understanding of this, and I’m sure people at home will be able to do the same as well. We do hope you’ve enjoyed that as much as we have and, that you’ll join us again at some point in the indeterminate future for another one of our financial well being podcasts.

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