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Manisha Thakor has worked in financial services for over 30-years with a focus on women’s economic empowerment. A nationally recognized thought leader around the issues of financial literacy and education, Manisha has been featured in national media such as The Wall Street Journal, The New York Times, Barron’s, CNN, and CNBC. She has written two personal finance books for women in their 20s and 30s. Manisha earned her MBA from Harvard Business School, her BA from Wellesley College and holds the CFA and CFP designations.
In this episode, Manisha shares insights from her latest book MoneyZen: The Secret to Finding Your “Enough.”
We talk about redefining success, breaking free from the “Cult of Never Enough,” and practical steps to embrace a life enough. If you want to align your financial decisions with your deepest values for a more fulfilling life, this episode is for you.
Here are my notes from our conversation.
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Understanding Money Zen (0:51)
Manisha defines MoneyZen as a state of mind characterized by calm, confidence, and clarity regarding one’s relationship with money and the role money plays in their life.
This perspective is not just about accumulating wealth or managing finances efficiently; it’s deeply intertwined with personal well-being and how individuals perceive and interact with money on a psychological level.
Thakor’s concept moves beyond the technical aspects of financial planning and wealth management to address the emotional and psychological facets of financial well-being. MoneyZen encourages individuals to reflect on their motivations, fears, and aspirations surrounding money, aiming to foster a healthier and more fulfilling relationship with it.
This approach recognizes that financial peace and contentment do not necessarily stem from reaching a certain net worth or income level but from knowing how to balance one’s needs, desires, and resources in a way that supports overall life satisfaction and personal growth.
MoneyZen is about finding that equilibrium where money serves as a supportive element in one’s life, rather than a source of stress or an indicator of success.
How People End Up in the Cult of Never Enough (03:21)
In this part of the conversation, Manisha delves into the underlying factors that fuel the pervasive sense of dissatisfaction many people experience, despite living in an era of unprecedented wealth and opportunity.
She identifies several critical drivers that perpetuate this cycle of discontent, urging listeners to recognize and address these issues to find a more fulfilling and balanced approach to life and finances. Those core drivers include:
- Small T Traumas: Early life experiences shape behavior and beliefs around money. Manisha shares her own experience of childhood bullying and its impact on her relationship with work and achievement.
- Societal Influences: Society equates identity with career success, leading to overemphasis on work and material achievements.
- Money Worries vs. Money Problems: Distinguishes between practical financial challenges and deeper emotional concerns rooted in cultural norms and unrealistic expectations.
- Behavioral Science: Our brains are wired to prioritize survival, leading to compulsive behaviors around money and status.
Science of Hustle and Work-Life Balance (16:20)
I asked Manisha to explain why we’re driven to perpetually seek more, often compromising our happiness.
She explains that this drive stems from evolutionary psychology, where our ancestors’ survival hinged on constantly seeking resources. Today, this manifests as a relentless pursuit of success and wealth, fueled by our brain’s dopamine reward system. Dopamine releases during goal pursuit or achievement, encouraging behaviors that once ensured survival but now often lead to materialism and social status-seeking.
Social comparison and the desire for elevated status in modern society further intensify this pursuit. The hedonic treadmill explains our inability to find lasting happiness from achievements or possessions, as our expectations adjust upward with each success. Cognitive biases, such as overconfidence, exacerbate this cycle, leading to decisions that favor immediate gains over long-term well-being.
Understanding these underlying mechanisms is crucial to breaking free from the constant hustle, suggesting a need for a more balanced approach to ambition and material possessions. By recognizing these innate drives, we can seek fulfillment in ways that prioritize personal well-being over societal success markers.
How to Implement Joy-Based Spending (21:30)
We close our conversation by redefining our relationship with money to enhance our life satisfaction and overall well-being.
Joy-Based Spending is rooted in the philosophy that our financial resources should be directed towards experiences, goods, and services that bring us genuine joy, rather than those dictated by external pressures or fleeting desires. This approach requires a deep understanding of one’s values, interests, and what truly contributes to one’s happiness.
Here are the steps to implement Joy-Based Spending:
- Identify Your Values: Begin by reflecting on what matters most to you. Is it family, health, creativity, adventure, or perhaps learning? Understanding your core values is the foundation of Joy-Based Spending, as it allows you to align your spending with what genuinely enriches your life.|
- Conduct a Spending Review: Look at your past expenses and categorize them into those that brought you lasting happiness and those that did not. This exercise helps in identifying patterns of spending that do not contribute to your joy.
- Set Joy-Based Spending Goals: Based on your values and the insights from your spending review, set goals for future spending. This could mean allocating more budget to travel if exploration brings you joy, or investing in courses for personal development if learning is your key to happiness.
- Create a Joy Budget: Design a budget that prioritizes spending on activities and items that align with your values and bring you joy. Ensure this budget also accounts for savings and essential expenses, maintaining a balance between present enjoyment and future security.
- Mindful Spending in Action: Before making a purchase, ask yourself if this expense aligns with your values and will bring you lasting happiness. This mindfulness practice helps in reducing impulsive buys and ensures your money is spent in ways that contribute to your overall well-being.
- Embrace Minimalism Where Possible: Part of joy-based spending is recognizing that more stuff doesn’t necessarily mean more happiness. Embracing minimalism in areas of your life that are less significant to your joy can free up resources for more meaningful expenditures.
- Regular Reflection and Adjustment: Your values and sources of joy may evolve over time. Regularly reflecting on your spending and adjusting your budget and goals accordingly is key to maintaining alignment between your finances and your happiness.
Research in positive psychology suggests that experiences often bring more lasting happiness than material goods.
Joy-Based Spending leverages this insight by encouraging investment in experiences that foster connections, personal growth, and memories.
Additionally, this approach aligns with the concept of intrinsic motivation, where actions are taken based on internal rewards (personal joy and fulfillment) rather than extrinsic rewards (social status, material wealth).
Resources:
The Long Term Investor is edited by the team at The Podcast Consultant
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