Money does make you happy
Optima and Vlerick Business School research Belgians’ financial happiness
Money does make you happy. That is what a study carried out by Vlerick Business School, commissioned by the financial services provider Optima, has discovered. The higher our income, the happier we are. More than a third (38%) of Belgians consider themselves financially happy. Nevertheless, the average Belgian doesn’t make much of an effort to achieve this financial happiness. Two thirds of Belgians spend barely four hours per month on the management of their finances. A good financial plan can however help to achieve more happiness.
The higher our income, the happier we are
The more we earn, the more financially happy, but also generally happy, we are. That is the most significant conclusion from the ‘Financial Happiness Barometer’, the research carried out by Vlerick Business School in February amongst more than 1,000 Belgians. Financial services provider Optima, which finances the ‘Financial Planning Practice’ Chair at Vlerick, commissioned the study to gain a better understanding of the way in which Belgians manage their finances.
The so-called baby boomers, the older generation between 65 and 75, and the best educated, are the happiest financially these days. They do expect this to go downhill in the future. What is striking in this research is that once we are financially happy, we do not become happier because we earn more.
Almost a third (32%) feels unhappy about their financial situation. “We see that these people have the feeling that they have no control over their financial situation and have no confidence with respect to money matters”, says Professor Marion Debruyne from Vlerick Business School.
We do not spend much time on financial management
The average Belgian does not in general spend much time on financial management. Two out of three Belgians spend barely 4 hours a month on their finances and one out of four spends even less than one hour per month. Yet Vlerick’s Financial Happiness Barometer shows that those who have their financial situation under control feel happier.
“People with clear objectives and a strict financial plan are quite a lot happier” says Jo Viane, manager at the Optima Group. “We invite our clients to have a good think about what they want to achieve in their lives”.
One out of three (30%) has the impression that they have a financial plan with which they can achieve their objectives. Older people with high incomes especially ensure that they have sharply defined financial targets. They have the feeling moreover that they are good at planning their financial future. As a result most of them think that they have taken the correct measures for their pension.
Only the financially happy like to take risks
Those who are happy to spend money are also financially happier. And the happier they are, the more likely they are to invest in higher-risk savings formulas.
The average Belgian believes that investing in shares is the riskiest strategy, and a savings account is the least risky. They also consider property to be safe. Those who do not enjoy taking financial risks are unhappier in financial terms. Young people, in particular, are more likely to play it safe. They even consider property to be relatively risky. Two out of three Belgians generally stay away from shares, bonds and funds.
Belgians are rather unsure about their financial future. Less than a quarter (23%) are confident that they will be able to maintain their standard of living in the future. And a quarter (24%) are worried that they might lose their job.
High income brackets are more likely to ask for advice
This survey uncovered the fact that financially happy people are more likely to ask for advice than unhappy people. In general, Belgians are more likely to trust comparative websites for this than banks, brokers, and asset managers.
Older people with high incomes make less use of these comparative websites and are more likely to go to asset managers, notaries, accountants and financial planners. Young people with high incomes rely mainly on friends and family for advice.
Financial happiness makes you proud and confident
Financially happy people are more interested, proud, determined and enthusiastic about their financial situation. People with a low income are more likely to experience feelings such as fear, hostility, restlessness and nervousness. Those with financial worries get stressed, don’t sleep well, and have mental and physical complaints. Family and social relationships are also affected.
“Financial happiness creates peace and ensures less stress. Those who do not have their financial situation under control are insecure and restless”, says Jo Viane from Optima Group.
Nevertheless, it is also striking that in general only 11% of people are really interested in their own financial situation. 39% admit to being only a little or not at all interested.
Optima is a financial services provider that endeavours to achieve maximum fulfilment of its clients’ financial goals. Peace of mind in the short and long-term is central to this. Optima works on an integrated plan covering income, assets, pension and inheritance. Since 1991 this approach has continually been refined. As an authorized banker and broker, Optima continues to help clients after the study stage with the actual fulfilment of the plan. A 360º approach in the broadest sense. Optima has its head office in Ghent. It also has branches in Brussels, Waterloo and Madrid.