This guest blog was written by Chris Budd, who wrote the original Financial Wellbeing Book as well as The Four Cornerstones of Financial Wellbeing. He founded the Institute for Financial Wellbeing and has written more than 100 episodes of the Financial Wellbeing Podcast.

We all care what people think of us. This is only natural. It could be specific people, such as wanting to make your family proud. Or it could be general, such as wanting to wear nice clothes that people we don’t know will admire.

Everybody appreciates a “well done”, and most of us enjoy an admiring glance.

Sometimes, however, we get our priorities wrong. There is a well-known quote from the book Fight Club by Chuck Palahniuk that goes: “We buy things we don’t need, with money we don’t have, to impress people we don’t like.”

One of the secrets to a life of financial wellbeing – of having a relationship with money which leads to wellbeing – is to understand which people’s opinions are guiding our actions, and whether impressing them is going to lead to wellbeing.

How to make difficult decisions

Here’s a tip for how to make a difficult decision. Suppose you have a tricky decision to make, one you’ve been mulling over for a while, but you just can’t decide what to do. It’s a real toughie.

Try this method to come up with an answer to your problem: think about someone who would know what to do – then do what they would do.

This might sound a little bit frivolous, but do try it. Because the chances are you will pick somebody whose opinions and values you respect.

If this is someone you know, you might also imagine how they would react if you made a decision which they did not approve of. How would this make you feel?

It is fair to say that living a life where you take into account the opinions of people that you respect, and whose values you share, is likely to be a life with wellbeing.

The only person that matters

When it comes to money, and in particular financial planning, there is one person who is probably more important than anybody else. And yet it is the one person that we typically think of last when we make those all-important financial planning decisions.

The person we should think of first, but tend to think of least, is you in the future.

Research tells us that our future self is like a stranger to us. We prefer our gratification now, not delayed. When it comes to financial planning, our focus tends to be on how we can enjoy our money now, rather than planning for enjoyment by our future self.

Let’s go back to the exercise above when making a difficult financial decision. What if the person you thought of to make the decision for you was yourself in, say, 10 years? What will your future self think of the decision that you are about to make? Will you look back and say that it aligns with your values? Was it for the benefit, or at least not to the detriment, of yourself in the future?

Sending gifts into the future is one of the best ways of spending money. In this way, rather than spending money to impress people now, we can use it to impress the only person that really matters: future you.

Please note: This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.