Interview with Jane Monica-Jones
How to achieve financial wellbeing?
Financial wellbeing is a term you hear a lot, but its true meaning isn’t necessarily obvious. Does a six-figure salary guarantee financial wellbeing? Not if you’re broke at the end of every month. What about a seven-figure salary? Not if you can’t afford to quit your job.
Great Southern Bank
You see, financial wellbeing isn’t about how much you earn, or even how much you’ve got in the bank. It’s about being in full control of your money, so you can meet your day-to-day commitments, make plans for the future, and be prepared for any unexpected curveballs life might throw at you.
The difference between ‘knowing’ and ‘doing’
So that’s what financial wellbeing means, but how do you achieve it? We spoke to Jane Monica-Jones, one of Australia’s leading financial therapists, for some advice. She prefers to think of financial wellbeing as a combination of financial literacy (‘knowing’) and financial capability (‘doing’).
As Jane points out, “We often believe to achieve financial wellbeing we just need to know how to budget or the best interest rate for our savings. But like many things, knowing and doing can be very different. Just because we know how to do something doesn’t mean we’ll necessarily do it. Just think about eating right or doing exercise.”
In other words, human beings are often their own worst enemy. To use Jane’s example of diet and exercise, you might know that skipping the gym will set back your training goals but… it’s just this once… and I’m really tired… and all my mates are going to the pub, so why can’t I?
Beware the chimp brain
That voice in your head, the one that thinks only in the short term, that makes excuses, that overrides your better judgment, is sometimes known in psychiatry as the ‘chimp brain’. And it can be one destructive little monkey if you’re not on your guard.
When it comes to money, the chimp brain attacks our financial capability. As Jane says, “Financial capability is awareness of our unconscious habits, controlling our impulses, and even delaying our gratification. It’s about planning goals and how we follow through and keep to them in our financial decision making.”
So, while you might know that regularly putting away spare cash in a high-interest savings account is the best way to achieve your dream of buying a home, your chimp brain will do its best to persuade you that an (admittedly amazing) pair of shoes you don’t need is more important.
Smart ways to success
If this sounds all too familiar, do not despair! The good news is that your chimp brain isn’t very bright. Once you understand how it works, you can easily outwit it. Or as Jane puts it, “We need to look at improving the attitudes, behaviours, beliefs, and even triggers that may get in the way of achieving our long-term goals.”
Think about what triggers your chimp brain. Do you find that the more you’ve got saved, the more you’re tempted to treat yourself? Great Southern Bank has a clever little feature called The Vault which hides your savings from yourself (or rather, your chimp brain), so you need never again give into the temptation of reckless spending.
Or perhaps the problem is that you find it difficult to save in the first place? In that case, you could try activating The Boost on your Great Southern Bank transaction account. Simply choose an amount between $0.01 and $5 to automatically transfer to your savings every time you make a Visa Debit card purchase.
Just think how effortless this could make saving for a home deposit. Every time you buy a cup of coffee, your savings would be getting a little boost. And old mate chimp brain need never know!
A simple equation
Jane likes to summarise things in mathematical terms. “It’s a simple equation”, she says. “Financial wellbeing equals financial literacy plus financial capability. It’s about combining what we do and what we know for the financial future that we want.”
Ms Monica-Jones was not paid for her advice.