I’ve written previously how all of our emotional reactions to the financial news of the day can lead to potentially damaging decisions regarding your longer term savings goals.  However I also believe that ignoring or suppressing your emotions can have a damaging impact on you achieving the level of financial security designed to help you achieve the life you want.

I’d also suggest that changing your emotional state by taking a number of clear actions can lead to better longer term financial outcomes, provide your with the financial security many of us crave and make us happier people.Psychologist Mihály Csíkszentmihályi is well known for his work on the study of happiness and creativity.  In many of his books he talks about the ‘state of flow’.  He talks about how the ‘state of flow’ is achieved when we are both sufficiently challenged and have the required skills to be able to meet this challenge.

In this state individuals are more productive, happier and focussed.  But whilst you are reading this you may be asking yourself a question.  “How can I apply the concept of ‘flow’ to help me in my journey towards financial security?”  and “How can I ensure that I’m in the right emotional state to both make good long term financial decisions?”

As I’ve already mentioned the key to achieving the ‘state of flow’ is to be both sufficiently challenged and have the required skills, knowledge (and access to this knowledge) to achieve what’s required.  This firmly applies to the longer term financial challenges you face at whatever stage of life you’re at….

Firstly let’s talk about ‘the challenge’.  The key to achieving ‘financial flow’ is to ensure that you are setting yourself goals which provide you with a sufficient challenge.

It may feel natural to set your goals you know are achievable.  However I’d suggest that if you know that a goal, financial or otherwise, is achievable….it’s likely it isn’t challenging enough to ensure your emotional engagement.  Therefore it’s important that when setting your financial goals you ensure that, wherever you decide to set this level, it sufficiently challenges you to help you find your ‘financial flow’.

Let’s now talk about the skill factor.  The second part of the psychological puzzle you need to help you achieve your ‘financial flow’…

The ‘skill’ of managing money well is about learning more about the habits, behaviours and actions you need to take to build sufficient wealth to achieve financial security for life.

The key skill in achieving ‘financial flow’ is to ensure you understand the actions you need to take to achieve your future financial security.  The skills and knowledge you need to do this can be sourced independently and there is some fantastic resources available which help you do this.

Alternatively you can work in partnership with a professional who can work with you to both improve your ‘financial flow’ skills and help with the more technical aspects of building wealth like, for instance, where and how to invest.

Therefore the most efficient method of achieving your future financial security is to both set challenging financial goals and build sufficient knowledge about the required habits and behaviours to ensure that you are able to live the life of your dreams for the rest of your life.

As ever I’m interested in hearing your thoughts.  Have you found your ‘financial flow’?  What techniques do you use to ensure that you have both the skills and challenges to make your life as meaningful as possible?  Do you agree or disagree with this Blog post?

I look forward to hearing from you.