The news reports we hear of peoples’ stories are real. They shock us. They surprise us. They cause us to be sympathetic but do they ever move us to make changes in our own lives? Maybe. Maybe not.
The latest news is the unexpected demise of Sears Canada. No one saw this coming. A reputable Canadian company with a solid financial track becomes a victim of retail bankruptcy. Ron Husk’s story paints a grim reality that you can never be prepared enough for this kind of situation. At age 72, Ron is returning to work part-time at Home Depot. It's the last thing he expected in his retirement years. Retired employees like Mr. Husk had their life insurance, health and dental benefits cancelled in September. Soon, Sears' retirees are expecting their pension to be reduced by 20 per cent. The point is these kinds of situations can happen to anyone. Financial mishaps occur in different ways, sending our financial situations spiraling out of control.
You have witnessed your share of stories like I have. I have seen a man lose his home and everything he owned because of a house fire. I heard from a young husband and father of two who was fighting pancreatic cancer by travelling to Austria for medical treatment. I have seen a woman struggle with pain as a result of a vehicle accident which broke multiple bones and caused severe brain injury. These incidents are traumatic. We are naïve if we believe nothing can happen to us. This dismal reality causes us to be aware of our priorities.
Where am I going with this?
Most people have never heard of Abraham Harold Maslow or his creation of the Hierarchy of Needs. His study reveals that we have a five-tier model of basic needs. Once our basic survival needs are met then our desire is to move up the pyramid to the next level.
Many articles and blog posts have connected Maslow’s Hierarchy of Needs to our financial needs at each of these levels. One quick Google search will link you to many explanations about applying this theory to managing your finances accordingly.
For me, the one thing that stands out is how we have a tendency to mix up our priorities. Literally, this breaks my heart. I see a picture of a two-year old daughter going for her first manicure and pedicure. I see a two-year old son getting a remote-operated toy monster truck for a Christmas gift. I see people trading vehicles less than a year old “just because”. Spending money on your children and yourself goes beyond meeting the first two needs: physiological and safety/security. They are fulfilling the need for love (spoiling your children) and esteem (displaying what you drive as important).
I don’t like using the term “wasting money” per se. However, the truth is you may not have built a strong solid foundation of security before you jumped ahead to impressing your children with gifts. If they were old enough to choose, they may have chosen security over gifts of love. They would have preferred knowing that if you lost your job or had to deal with a serious illness, they would feel loved knowing they had a home and you.
Setting boundaries on our spending habits is one way to love our families. Other ways are ensuring we have put in place the security of insurance, contributing regularly to an emergency savings account, and paying down our debt to free up cash to save for our retirement years.
You might not fully appreciate hearing from a financial advisor “what is important in life”. However, you may appreciate hearing from someone young with her whole life in front of her who didn’t have the chance to grow old and wrinkled. A heart-breaking news story comes from a letter written by Holly Butcher. Holly passed away at the age of 27 from cancer. Before she died, she shared her thoughts about the true meaning in life. Click here to read Holly’s story.
Here’s the challenge. I believe you can write your own story. You can learn from others as well as Abraham Maslow about your basic needs. Life teaches us lessons. What have you appreciated learning from others and your own experiences? You may share your news.