Finding joy and purpose
For intermediaries only
Finding joy is about the moments here and now that make us happy, whilst finding our purpose is about identifying things that we feel give our lives meaning.
From Instagram to game shows, we’re often surrounded by images that suggest money equals happiness. When in fact, happy people live their lives doing two types of activities (in a roughly equal share) – things that make them feel happy and things that make them feel useful.
To better understand how joy and purpose play a part in achieving better financial wellbeing, our Centre for Behavioural Research conducted extensive research asking 10,466 UK residents a series of questions. The study was nationally representative in terms of location, age and gender, giving us a panoramic view of the UK’s financial health, the drivers, and roadblocks of financial wellbeing.
What does financial wellbeing mean?
Financial wellbeing is how people feel about the control they have over their financial future and their relationship with money. It's about focusing on the things that make their life enjoyable and meaningful – both now and in retirement.
How to define joy and purpose
- Joyful activities – things you enjoy or that relax you. Like playing a sport you love or going out for a meal.
- Purposeful activities – things that make you feel competent and useful or engaged. Like working in a job caring for people or putting DIY skills to use or helping your local community.
Human happiness power
The instant hits of happiness we feel when undertaking activities we enjoy, is better when balanced with activities that make us feel useful – a longer-term happiness. If that scale is off kilter, it can impact how we feel about our life goals and how motivated we are to achieve them.
What we found was that it wasn’t always a lack of knowledge but habits and ways of thinking that can prevent people from doing what they should. And that’s where joy and purpose comes in.
Our analysis found a mental focus on what makes us feel happy and useful plus a plan to achieve that now and in the future, was a much stronger indicator for financial wellbeing than overall wealth.
And part of finding joy and purpose – or defining them – is to help your clients to fully understand how they think about money and their financial resilience.
We found only 4 in 10 people (38%) have even considered what gives them joy or purpose in life
The people most likely to have thought about this (42%) are those likely to be approaching retirement, aged 55-64, and just 36% of 45–54-year-olds have given it ‘a lot’ or ‘quite a lot’ of thought.
We’d have expected these figures to be higher and shows there’s an opportunity for you to bridge this gap and increase this percentage by focusing on what motivates your clients to save, what they’re saving for and why.
What’s stopping people?
We found that those on high incomes are more likely to have thought about what makes their lives enjoyable than those on low incomes. However, in all income groups – only a minority have thoughts about what gives them joy and purpose.
So why aren’t people thinking about their joy and purpose? Well, because it’s difficult. It needs time and focus on the right things.
The right conversation focuses on recent life experiences, rather than life evaluations. For example, a client says that owning an expensive car makes them happy. And that may be the case if the feeling of driving that car satisfies them (the experience). But it may be that they believe that car improves their social status and just owning it will make them happy (the evaluation).
To work out what makes us happy, we must pay attention to moments of feeling satisfied, relaxed and happy (joy), and the moments of feeling useful, competent and worthwhile (purpose).
This will lead you to your clients’ intrinsic motivations that should inform their financial plan.
Find out how happy your clients want to be
Understanding the intrinsic motivations behind your client’s financial decisions is important for identifying their joy and purpose and creating a plan to strike balance in their life. At your next meeting, ask them about:
- Three times they felt really happy. What were their reasons?
- Three times they felt useful. What did they achieve?
- The last seven days, and anything they spent more than three hours doing. What was it and how happy and/or useful did they feel?
You can capture their scores on our editable PDF table - How happy do you want to be? and consider asking them to complete this every so often to highlight planning opportunities.
Tools to support you
Our in-depth digital flipbook explores our research even further and provides clients with recommendations to help them think and act positively about their future – going deeper than budgeting tools and savings rules and shows how financial wellbeing is possible for everyone.
We’ve also created our summary of our insight into the nation’s financial wellbeing – just for advisers and employers.
Plus our financial wellbeing tool can help your clients identify areas of their financial wellbeing you can work on together.
Find out more about financial wellbeing at aegon.co.uk/financialwellbeing