CONTRIBUTIONS Asebedo | Seay

From Functioning to Flourishing: Applying Positive Psychology to Financial Planning by Sarah D. Asebedo, CFP®; and Martin C. Seay, Ph.D., CFP®

Sarah D. Asebedo, CFP®, is an assistant professor of Executive Summary practice in financial planning at Virginia Tech and is a doctoral candidate at Kansas State University. • This paper introduces positive their well-being to thrive, prosper, With 11 years of practitioner experience, Asebedo’s psychology, illustrates how it and flourish in life. goal is to connect research and practice with a focus overlaps with financial planning, • Financial planning and positive on psychological attributes and household financial and provides specific scientifi- psychology align through the behaviors. cally based tools and resources notion of positive financial that financial planners can use to planning. Martin C. Seay, Ph.D., CFP®, is an assistant professor integrate positive psychology into • Two client case studies illustrate at Kansas State University. His work has been their practice. that positive psychology can published in the Journal of Financial Planning, • Financial planning has naturally be integrated within financial Journal of Financial Counseling and Planning, and evolved from helping clients planning in three basic ways: (1) as Journal of Consumer Affairs. He is the vice president function financially to helping a perspective and orientation to clients improve their well-being financial planning; (2) as a source of communications for the Academy of Financial and quality of life, as evidenced in of scientifically based information Services and a co-host for FPA’s Theory in Practice life planning, financial coaching, to bring to financial planning con- Knowledge Circle. and financial counseling. Positive versations; and (3) as a positive psychology has had a similar intervention to help clients move The common definition of flour- evolution over the past decade to through financial and life changes ish—to thrive, prosper, be in a period of explore how people can optimize to maximize their well-being. the highest productivity or influence— reflects a basic human ambition: to live a full and prosperous life. on the topic of human flourishing and within psychology has historically Given the vital role money plays in can provide valuable tools and resources emphasized the treatment of mental life, financial planning has naturally for financial planners to help clients illness, with less scientific effort focused evolved from helping clients function thrive and prosper. on developing human strengths. Positive financially to helping clients effectively This paper introduces positive psy- psychology emerged in 1998 as a field align their money with their life’s chology, illustrates how it overlaps with focused on correcting this imbalance aspirations. This shift from functioning financial planning, and provides specific (Peterson and Park 2003). to flourishing is evident through the tools and resources financial planners Positive psychology seeks to establish emergence of life planning, financial can use to integrate positive psychology scientific evidence focused on optimiz- coaching, and financial counseling. into their practice. ing well-being so that people can move Psychology has experienced a similar beyond functioning to thrive, prosper, evolution of thought within the past Introduction to Positive Psychology and flourish in life (Peterson and Park decade as positive psychology has Psychology can be broadly defined as the 2003; Seligman 2012). According to emerged to explore what makes life study of the mind and behavior (Ander- the Positive Psychology Center at the worth living. Positive psychology is on son 2015). Peterson and Park (2003) University of Pennsylvania (www.positive the cutting edge of research and practice indicated that research and practice psychology.org), positive psychology is

50 Journal of Financial Planning | November 2015 FPAJournal.org Asebedo | Seay CONTRIBUTIONS

“the scientific study of the strengths Figure 1: From Traditional Psychology to Positive Psychology that enable individuals and communi- ties to thrive. The field is founded on the belief that people want to lead mean- Traditional Psychology Positive Psychology

De cits Neutral Neutral Strengths ingful and fulfilling lives, to cultivate what is best within themselves, and to enhance their experiences of love, work, mental illness mental functioning ourish in life and play.” (for example, (for example, (for example, depression) absence of or improve quality As depicted by Figure 1, positive reduced mental of life, optimize psychology serves as a complement to illness; in other well-being) traditional psychology with a focus on words, less depressed) building strengths. This continuum can easily be applied to understanding the evolution within financial planning. As illustrated in Figure 2, traditional Figure 2: From Traditional Financial Planning to Positive Financial financial planning has primarily focused Planning on meeting financial needs so that clients can function in life and meet Traditional Positive Financial Planning Financial Planning their future goals (for example, debt Needs-focused Neutral Neutral Strength-focused pay down, adequate insurance, suf- ficient savings for goals, etc.). Financial nancial needs nancial ourish in life stability and security are typically seen (debt, bad credit, functioning (eectively use as signs of financial health and indicate lack of savings, (for example, money as a tool success in financial planning—a no emergency nancial health to optimize fund, under and security, well-being) growing balance sheet, steady income, insured) savings plan, adequate financial ratios, a solid credit improved credit, etc.) score, consistent savings, etc. It is at this neutral point that the traditional financial planning process indicates monitoring is needed to ensure financial (2012) suggested life planning is a based approaches are needed to health continues. growth model with a goal to move “the expand the body of knowledge used Positive financial planning moves client’s well-being from functional to in financial planning. In this spirit, beyond financial functioning and health optimal” (p. 55), clearly overlapping positive psychology provides a variety of to ensure a person’s money is maximized with the goal of positive psychology. scientifically tested tools and resources as a tool to optimize well-being, such This overlap has previously been that can be applied to foster client that a flourishing life is possible. Posi- observed. Weber (2012) proposed that well-being. Well-being is defined and tive financial planning (from the view basic positive psychology skills may assessed through the lens of well-being of positive psychology) is focused on become essential for financial planners theory. Well-being theory states that an how money is related to topics such as to acquire given the prevalence of individual flourishes in life when they purpose in life, meaning, achievement, behavioral finance and life planning. experience the following five key ele- supportive relationships, happiness, joy, Thus, financial planners who aim to ments (see Figure 3): Positive emotion, gratitude, use of talents/strengths, and extend their services beyond traditional Engagement, Relationships, Meaning, optimism, for example. financial planning can benefit from the and Accomplishment—abbreviated as Positive psychology has gained wealth of scientifically based tools and PERMA (Seligman 2012). prominence, both directly and in spirit, resources from positive psychology. Positive emotions reflect an indi- within the financial planning, financial vidual’s subjective emotional evaluation coaching, and financial counseling From Psychology to Planning: of the past (for example, life satisfac- fields over the last decade. This is Tools and Resources tion), present (for example, pleasure, often evidenced through the concept Buie and Yeske (2011) noted that happiness, comfort, and joy), and future of life planning. For example, Hogan scientifically grounded and evidence- (for example, optimism).

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well-being. For example, assuming fixed Figure 3: Well-Being Theory (PERMA) expenses represent basic needs, a cash flow statement could organize discretion- ary expenses according to the PERMA elements to determine how spending is Relationships supporting and optimizing well-being. Table 1 illustrates common goals and related spending categories organized Meaning Engagement according to the PERMA elements, which may naturally overlap (for example, a hobby may provide a sense of engagement, positive emotion, and accomplishment).

Positive Emotion Accomplishment Flourish Measuring Client Well-Being An understanding of PERMA is only useful if it can be applied easily in prac-

tice. A variety of resources are available Adapted from Seligman (2012) for measuring and evaluating well- being. The University of Pennsylvania’s Table 1: Financially Related PERMA Categories Authentic Happiness website provides a series of user-friendly questionnaires Positive Emotion Travel, sporting events, concerts, dining out, clothing, jewelry, spa, to evaluate an individual’s well-being theater, etc. Engagement Hobbies and activities (for example, reading, playing a musical based upon psychometrically validated instrument, gardening, exercise, etc.) scales (see www.authentichappiness.sas. Relationships Gifts to others, experiences with others (for example, travel, events, etc.) upenn.edu/testcenter). Meaning Charitable and political contributions, religious and special interest As an example, meaning in life, group support, etc. representative of the “M” element of Accomplishments Education endeavors, sports, hobbies, professional development, etc. PERMA, is measured based upon the following 10 questions with responses Engagement, also referred to as flow live a fuller and happier life. for each question ranging from 1 (abso- (Csikszentmihalyi 1997), is a psycho- lutely untrue) to 7 (absolutely true) (see logical state of complete immersion Viewing Client Well-Being through PERMA www.positivepsychology.org/resources/ and absorption into a particular task or With an understanding of the PERMA questionnaires-researchers): activity that uses a person’s strengths elements, financial planners will be 1. I understand my life’s meaning. and talents and results in the loss of better equipped to help clients align their 2. I am looking for something that self-consciousness and sense of time. financial resources and behavior in ways makes my life feel meaningful. Relationships encompass the to increase well-being. This can material- 3. I am always looking to find my experience of healthy, supportive, and ize in two basic ways. First, as part of the life’s purpose. fulfilling relationships in one’s life. goal-setting process, financial planners 4. My life has a clear sense of purpose. Meaning refers to feelings of purpose can explore how clients are currently 5. I have a good sense of what makes in life and contributing or belonging to experiencing the PERMA elements my life meaningful. something greater than oneself. and how they wish to experience these 6. I have discovered a satisfying life The pursuit of mastery, success, win- elements in the future. Second, when purpose. ning, and achievement all encompass facilitating goal achievement through 7. I am always searching for some- the notion of accomplishment, the cash flow planning, financial planners thing that makes my life feel fifth and final element of well-being. can use a PERMA framework to ensure significant. Through supporting and developing their recommendations do not deprive 8. I am seeking a purpose or mission these five characteristics, well-being clients of the products, services, and for my life. theory suggests that an individual will activities that promote happiness and 9. My life has no clear purpose.

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10. I am searching for meaning happiness. The purpose of this exercise associated with a major event (“Today I in my life. is to change your client’s focus from received a promotion at work because I With question 9 responses reversed problems to successes so that a negative am talented and work hard”). Overall, (1 becomes a 7), higher average scores outlook no longer dominates thought this exercise will encourage clients to would indicate a greater sense of pur- and creates anxiety. Bad events should focus on what went well financially pose and meaning in life. In practice, not be ignored; however, dwelling on in their lives and why, providing for a if a client produces a lower score, them can detract from forward progress much happier and open-minded client then a financial planner could help and life enjoyment. experience. the client determine how to reallocate The instructions for this exercise are Signature strengths exercise. The their financial resources or reshape simple; at the end of each day for one purpose of this exercise is for clients their goals to foster more meaning week, have your client write down three to discover their signature character in life (for example, charitable giving things that went well and why they went strengths by taking the Values in Action strategy or more time away from work well. It is important to encourage your (VIA) Signature Strengths survey to volunteer or be with family, etc.). A client to spend sufficient time thinking by the VIA Institute on Character client’s evaluation of their scores might about why these things went well as (www.viacharacter.org). This survey be enlightening to them personally by the explanatory style (see developing is designed to help people uncover highlighting which positive psychologi- optimism below) deployed for both good and apply their unique character cal attributes are low or missing. This and bad events can significantly impact strengths in order to increase their will provide internal reflection and future action. overall well-being. It encompasses 24 awareness, which is often the first step character strengths organized within before change occurs. six broad virtue categories: wisdom, Equipped with these well-being courage, humanity, justice, temperance, measurements, financial planners can and transcendence. The VIA Signature gain an understanding of the positive Positive psychology Strengths survey is set apart from psychological attributes currently skills“ may become the widely known StrengthsFinder present in clients’ lives. Although assessment by Gallup, as it provides for essential for financial these scales are not intended to be a robust, scientifically validated, and diagnostic, they can be used to gain planners to acquire. broadly applicable tool that can be used insight into the client’s way of thinking. ” within many different contexts (Neim- Thus, these tools will create valuable iec 2013). The primary idea behind this relationship-development conversa- exercise is to understand key strengths tions, as well as provide information and purposefully increase the creative that can be used to frame the goal- This exercise could be particularly use of them. setting and cash flow allocation process useful in financial planning when Given the results of this test, have to promote well-being. clients experience major financial clients allocate a specific block of time and life events, such as retirement. to use one of their top five strengths in a Promoting Client Well-Being with Positive The transition to retirement can be new way. For example, if one of their top Psychological Exercises an emotional minefield and it may be signature strengths is kindness, they could The following three exercises are used beneficial for a client to document find a good deed to do for a family mem- in positive psychology practice and three good things a day about their new ber, friend, or stranger in the next week. have been shown to increase happiness retirement life. This exercise may also Understanding clients’ signature strengths and reduce depressive symptoms over be beneficial for clients struggling to can help financial planners develop a plan long periods of time (Seligman, Steen, gain control over their finances, trying to allocate sufficient financial resources Park, and Peterson, 2005). More details to move past negative financial events, toward using those strengths. This exercise regarding these exercises can be found or attempting financial behavior change. may help clients entering retirement to in the book, Flourish (Seligman 2012). These financial events or decisions do envision a plan for how they can continue What-went-well exercise. This not have to be significant (“I stayed using their strengths when traditional exercise promotes a variety of positive within my budget today because I felt work is no longer an outlet. Moreover, a psychological attributes such as grati- in control and realized I didn’t need to client in their working years may realize tude, optimism, accomplishment, and purchase a new watch”), but can also be they are not using their strengths in their

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cal perspective may play a role in this Table 2: Explanatory Style Di erences for “Bad” Events observed disconnect. For example, a client experiences a negative return in his or her investment portfolio Because optimists are more likely Optimist Pessimist to follow through on advice, financial Permanence “I don’t understand last year’s “I can’t understand investments.” investment market decline.” (permanent) planners might benefit from focus- (temporary) ing on this emotion when providing Pervasiveness “Stocks had poor performance “Investments are too risky.” long-term planning recommendations. last year.” (speci c) (universal) Personalization “Investment markets decline “I made poor investment First, a financial planner can have a sometimes.” (external) decisions.” (internal) client complete an optimism measure- ment questionnaire to understand the current job and may wish to explore a sacrifice for the family, or a friend who status of the client’s current optimistic career change. helped during tough times. disposition. A client may benefit from The gratitude visit. Gratitude is a It is not uncommon for financial optimism-building exercises if the positive emotion within the PERMA planners to work with multiple client demonstrates a lower score or framework that promotes both per- generations at one time. Parents’ produces a higher score yet says yes to sonal and social benefits. Gratitude is perceived gratitude from adult children any of the following questions (Selig- typically derived from recognizing the for financial support has been shown man 2011, p. 208): impactful contributions others make to to have a positive effect on the parents’ • Do I get discouraged easily? our lives. The gratitude visit provides psychological well-being (Byers, Levy, • Do I get depressed more than I personal and social benefits through Allore, Bruce, and Kasl 2008). There- want to? expressing gratitude to another person fore, this exercise could be a powerful • Do I fail more than I think I in a purposeful and thoughtful way tool in cultivating positive money should? (Seligman 2012). relationships within families when Once the client’s current optimism The first step is to have your client working with multiple generations. level is understood, the following three reflect and imagine a person who tools and resources can be used to positively contributed to their life who Developing Optimism promote and cultivate an optimistic they could meet with in person. Next, Optimism, an element of the positive perspective (Seligman 2011). have the client sit down and write a emotion construct of PERMA, has Understand your clients’ explana- thoughtful, clear, brief (about 300- received significant attention within tory style. It is important to understand word) letter to that person. This letter positive psychology. Optimism has been a client’s explanatory style, as optimism should clearly describe the person’s shown to be a powerful emotion that is and pessimism are primarily character- contribution, how it was impactful beneficial in many ways, not the least ized by how people habitually explain at the time, and what it means today. of which is promoting better physical good and bad events. Given an event, an With the letter in hand, have the client health. Optimism may be related to individual’s explanatory style is the way reach out to that person to arrange a better physical health for three primary in which they attribute causes to the visit, but keep the letter a surprise. reasons (Seligman 2012): (1) optimists event and is defined by three dimen- During the meeting, the client can believe actions matter and follow sions: permanence, pervasiveness, and read the letter to the person and spend through on advice; (2) optimists tend personalization. time talking about the event and their to have more social support; and (3) The Attributional Style Questionnaire relationship. optimists may have biological mecha- (ASQ) is commonly used to measure an Financial planners are in a unique nisms promoting better health, such as a individual’s explanatory style (Peterson position to help clients identify grati- more aggressive immune system. Thus, and Steen 2002). A user-friendly scale tude visit opportunities as the client’s cultivating optimism is recognized as a is also available through the University story unfolds over time, particularly worthy pursuit and can be accomplished of Pennsylvania’s Authentic Happiness as it relates to the financial realm. For over time (Seligman 2011). website (www.authentichappiness.sas. example, the gratitude visit could be for Financial planners may struggle to upenn.edu). someone who helped them get their first understand the gap between advice and Permanence is about time and the job or a promotion, a parent or relative action. Although topic-specific research attribution of temporary or permanent who provided financial support, a career is needed, the general body of optimism causes for an event. mentor, a spouse who made a financial research suggests a client’s psychologi- Pervasiveness is about space and

54 Journal of Financial Planning | November 2015 FPAJournal.org Asebedo | Seay CONTRIBUTIONS the association of specific or universal man 2011, p. 216). the last two months I’ve followed causes to an event. In a financial planning context, through with my saving plan and have Personalization is about the attribu- the ABCs can provide a framework to not overspent. I was stressed at work tion of the cause to oneself (internal) or help people discover specific financial today and the purchases helped me feel other environmental or circumstantial events (overspending) that give rise better at the time.” factors (external). For example, suppose to interpretive beliefs (“I am poor Energize: “I feel motivated to try new a client experiences a negative return at managing money”) resulting in methods to stick to my budget. Perhaps in their investment portfolio. Table 2 emotional consequences (despair). By I should explore why I felt so stressed at represents the explanatory style differ- recording actual events, beliefs, and work and try to address that. I will have ences between optimists and pessimists consequences as they relate to financial to spend less next month so I can pay off for this bad event. behavior, a financial planner can help my credit card bill from this month due The responses to good events are a client uncover the internal messages to my shopping trip.” the exact opposite from bad events, that may be thwarting (pessimism) or Optimism is a powerful, positive as an optimist would interpret a good helping (optimism) their efforts. Using psychological attribute; it helps people event to be based on permanent, the previous overspending example, bounce back from adverse situations, universal, and internal causes; a pes- a pessimistic ABC pattern may look thereby giving way to energizing simist would attribute the good event something like this: thoughts and actions. Financial planners to temporary, specific, and external Activating event: “I stopped by the can have a significant impact on the reasons. Within the financial planning mall on my way home from work and disputation process because they natu- context, pessimistic clients may be completely blew my budget this month.” rally bring an objective vantage point to more resistant to advice, as nega- Belief: “I just can’t manage my a client’s situation. Given the emotions tive financial events are likely to be money. I’m weak and will never be able and behavioral aspects intertwined interpreted as a personal deficiency, to to save enough for my retirement.” with money that often inhibit action, resonate longer, and to have broader Consequence: “I feel like giving up.” it is beneficial for financial planners to implications than what is necessary. Dispute your beliefs (disputation) understand how they can promote an The ABCs. The Activating events, and energize. Adding D and E to optimistic perspective for their clients. Beliefs, and Consequences (ABC) the ABC model, Ellis (1991) suggests schema is well established within Disputing negative thought patterns to Positive Financial Planning In Action: Two psychology. The basic premise behind arrive at an effective new philosophy, Case Studies the ABCs is that a person’s positive or which results in an Energizing solution Positive psychology can be integrated negative thoughts affect their inter- (Seligman 2011). into financial planning in three pretation of an event, thereby forming Beliefs are often a version of reality fundamental ways: (1) as a perspective beliefs that impact their emotional and disputation involves changing and orientation to financial planning; response and behavior (Ellis 1991). oneself to develop a more realistic and (2) as a source of scientifically based Therefore, a more constructive objective view of a situation. To dispute information to bring to financial outcome can be achieved by changing beliefs it is necessary to focus on four planning conversations; and (3) as a the way people think. areas (Seligman 2011): (1) provide positive intervention to help clients To discover a person’s ABC sequence, evidence that the belief is factually move through financial and life changes Seligman (2011) recommends that indi- incorrect; (2) suggest alternatives as to to maximize their well-being. This is viduals record five ABC patterns over why the event occurred; (3) consider similar to an integrative framework the course of a one-week period to gain implications if the belief is in fact true; that has been proposed for positive insight into their habitual way of think- and (4) consider if the belief is useful or psychology and life coaching (Joseph ing. The interpretive beliefs formed as a destructive. 2015). Given this backdrop, consider result of the event represent a person’s Following the overspending ABC the following two case studies to explore explanatory style (permanence, perva- pattern from above, “D” and “E” could how positive financial planning can be siveness, and personalization). The link take the following form: implemented in practice. between beliefs and consequences are Disputation: “Yes, today I blew my important as “pessimistic explanations budget, but it’s not accurate that I can’t Case Study 1: Jason set off passivity and dejection, whereas manage my money. That is a destruc- Jason, age 65 and single, retired four optimistic explanations energize” (Selig- tive belief and I need to let it go. For months ago from his corporate execu-

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the results. Jason discovered through Table 3: Case Study 1: Jason’s Allocation of Time and Money, the questionnaires that although he was According to PERMA happy at times, his overall well-being Today Future time and money time and money was less than optimal, because his PERMA elements were over-weighted Positive Emotion • Traveling (overall two months • Allocate $5,000 of the regular travel per year, $15k to $20k annually) budget to creating experiences with toward positive emotions. When exam- • Golf (four times weekly, $10k children ining his cash flow and allocation of annually) • Reduce time and money allocated time (see Table 3), Jason observed that to golf by half the majority of his time and money were Engagement • No time or money spent here • Fishing (twice weekly, $2,000 spent on things that facilitated positive annually) emotions, with engagement, relation- • Reading (daily, $1,200 annually) ships, and accomplishment substantially • Use leadership skills in the community neglected. Although time and money Relationships • Phone calls with children (once • Organize travel experiences with were being spent on meaning, Jason monthly, $0) children (regular visits every three noticed that he was psychologically months, $5,000 annually) lacking in that area. • Continue phone calls but try video The forward-looking component of conferencing ($0) the PERMA time and money worksheet Meaning • Volunteering (one hour • Continue volunteering and helped Jason envision changes he weekly, $0) monetary giving plan • Charitable giving ($3k annually) • Lead and organize charitable events could make in his life to build out the ( ve to 10 hours weekly, $0) PERMA areas further (see Table 3). Accomplishment • No time or money spent here • Learn a new language (daily, $500) The signature strength exercise was useful to Jason, as he had begun to tive position. He feels financially secure Megan: “The retirement transition incorporate two of his top five strengths and is not concerned about money. He can be hard and you are not alone in into his life as a result (leadership and has two children he hasn’t seen much your experience. I would like you to try love of learning, according to Table 3), due to his busy work schedule over a couple of things before our next meet- which enhanced his sense of meaning, the past several years. Jason recently ing. There are some tools and resources accomplishment, and engagement. met with his financial planner, Megan, from positive psychology that can help The what-went-well exercise helped and was visibly distressed. Megan was us understand and explore what makes him to feel generally happier and surprised and curious, as Jason is in fan- life worth living. Does that sound like reaffirmed that he highly valued interac- tastic financial shape with a comfortable something you would be interested in?” tions with his children and that it would retirement income. Megan, concerned, Jason: “Yes, let’s give it a shot.” be mutually beneficial to foster those decided to explore further. Megan gave Jason the following home- relationships. By the end of the meeting, Megan: “Jason, something seems work to complete over the next month: Megan and Jason had developed a plan different about you and I’m sensing 1. Complete the VIA Signature to realign his budget to support his stress. During our last meeting you were Strengths and PERMA flourishing newly found goals and dreams. This did so excited to retire and had many plans. questionnaires. mean less golfing, but a fuller and more Can you tell me more about what has 2. Complete the signature strengths meaningful life that he could share with changed over the last four months?” and what-went-well exercises. his children and the community was Jason: “I’m not happy and I can’t put 3. Observe and write down how you now in reach. Jason left that meeting my finger on it. I’ve traveled, golfed are spending both your time and smiling and with a bounce in his step more, and done volunteer work and am money according to the PERMA that wasn’t there the last time. starting to feel bored and empty.” framework today and what it As illustrated by Jason’s story, the Megan: “I see, so your new retire- could look like in the future if you exercises and tools from positive psy- ment life isn’t exactly what you thought were to experience each of these chology provided Megan with a sound, it would be?” elements to the fullest. coherent, and integrated framework Jason: “That’s right. I need to make After completing the above exercises from which to explore Jason’s situation. some changes but am a bit lost as to what one month later, Megan met with Jason Throughout the process, Megan gained to do. I didn’t expect to feel this way.” and helped him interpret and process valuable insight that enabled her to

56 Journal of Financial Planning | November 2015 FPAJournal.org Asebedo | Seay CONTRIBUTIONS develop an action plan to align Jason’s progress whatsoever with our finances. ment plans. We’ve stuck to our saving money with his life. While this situation We have a huge mortgage and I don’t and spending goals ever since.” is an example of a positive intervention, think we’ve saved enough for the kids’ Julian: “That’s great! When I these tools and resources can also be education. Every time we talk about reviewed your financial documents, I used proactively when onboarding these things we end up arguing. We was impressed by how much you have new clients and prior to major life don’t work together well when it comes accomplished already for retirement transitions. Jason would have benefited to money.” and education. Tom, earlier you said greatly from exploring these topics prior Julian: “Alright, it sounds like debt that you and Adriana don’t work well to his retirement or even earlier during pay down, education funding, and together when it comes to money and his working years. improving your relationship with that you haven’t made any progress Adriana around money are at the top of with your finances. Do you think these Case Study 2: Tom and Adriana your list. Is that right?” statements may not be entirely true?” With three busy kids and two full-time Tom: “ Yes.” Tom: “Well, actually you’re right— jobs, Tom and Adriana barely have Julian: “Adriana, what do you think?” they aren’t completely true. There are time to discuss their personal finances. Adriana: “Yes, the mortgage and certain areas in which we do work well When they do talk about money, they education funding are important, and together, like saving for retirement typically end up in an argument that and starting our education savings. ends with no resolution or action. Tom After Adriana’s parents started giving and Adriana are stuck. In desperate us money every year, we purchased a need of help, they begin working with a larger house with a larger mortgage and financial planner named Julian. Positive psychology decided to fund all of our children’s edu- Julian proactively incorporates can“ be integrated into cation. Prior to this we were only going positive psychology into his practice to fund their education at 50 percent. and has new clients complete positive financial planning in I’m so stressed at work I don’t know how psychology questionnaires as part of his three fundamental much longer I can keep going; however, onboarding process. Julian’s standard with the larger expenses and savings ways. forms for gathering Tom and Adriana’s ” needs, I feel like I have to.” financial data and goals did not indicate Julian: “Well, we can certainly anything unusual. They had typical goals crunch some numbers to see how the for a young couple in their early 40s, increased expenses and savings fit including education funding for their we do argue mostly about those items. into the long-term plan. I also want to children and a planned retirement in We didn’t always fight like this. The better understand your work situation. their mid-60s. Based on the positive arguments became much more frequent I noticed you scored rather low on the psychology questionnaires, however, after my parents started giving us money work-life satisfaction questionnaire so Julian noticed that Tom scored low in two years ago.” I’m not surprised to hear your comment optimism, happiness, and work-life Julian: “Okay, so I’m hearing that the about work-related stress. Adriana, it satisfaction. Adriana on the other hand, mortgage and education funding goals seems like things changed after your had high scores in all areas except for are really important to you both. Also, it parents started giving you and Tom gifts. happiness. Their first meeting with sounds like there was a time when there What are your thoughts on that?” Julian went like this: were less money arguments between Adriana: “My parents really want to Julian: “Tom and Adriana, thank you the two of you. Tom, can you think of help us and the gifts make a big differ- for completing all of the initial question- a time when you and Adriana worked ence, but I do think we have increased naires and data-gathering forms. I know well together around the household our lifestyle because of them. Tom and I it is a lot of work but it helps me to finances?” have fought a lot more lately and I think better understand your situation. Before Tom: “Well, a couple of years ago we it is because of the increased pressure he we dig in, I would love to hear in your had some great conversations around feels to support our expenses and goals, own words what each of you think are education funding and started saving in which the gifts actually cover. Also, I’m the top financial priorities in your lives 529 plans for the kids. We also agreed very thankful for the gifts but I’m not at this time.” to cut back on our spending so that we sure how to express my appreciation to Tom: “Well, we aren’t making any could save the maximum in our retire- my parents.”

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Julian: “Thank you both for sharing position to help clients uncover and Csikszentmihalyi, Mihaly. 1997. Finding Flow: The your views—this has been a very helpful attain their best possible life and can Psychology of Engagement with Everyday Life. first meeting. I have some ideas that I learn valuable information from positive New York, NY: Basic Books. think will help you continue with your psychology on the topic of human Ellis, Albert. 1991. “The Revised ABCs of progress and relieve some of the money flourishing. While positive psychology Rational-Emotive Therapy (RET).” Journal of arguments you are having. Are you ready provides a framework for understanding Rational-Emotive and Cognitive-Behavior Therapy to try some new ideas?” client well-being, it is important for 9 (3): 139–172. Tom and Adriana: “Yes!” a financial planner to understand the Hogan, Paula H. 2012. “Financial Planning: A Julian proceeded to review the bounds of their expertise. Thus, a finan- Look from the Outside In.” Journal of Financial questionnaire results with Tom and cial planner may wish to partner with a Planning 25 (6): 54–60. Adriana to deepen the conversation. mental health professional depending Joseph, Stephen, ed. 2015. Positive Psychology in Julian explained the gratitude visit to upon the client situation. Practice: Promoting Human Flourishing in Work, Adriana and suggested she try it with Additional tools and resources in Health, Education, and Everyday Life, 2nd ed. her parents. Adriana found the gratitude positive psychology can also be found in Hoboken, NJ: Wiley. visit to be emotionally rewarding. The the book, Positive Psychology in Practice: Neimiec, Ryan, M. 2013. “VIA Survey or visit also opened a new line of com- Promoting Human Flourishing in Work, StrengthsFinder?” Psychology Today blog, munication with her parents as she Health, Education, and Everyday Life, posted December 17. discovered they had begun to contribute 2nd Edition. Continued research and Peterson, C., and Tracy A. Steen. 2002. “Opti- to their own education accounts for the practitioner experiences that provide mistic Explanatory Style.” In. C.R. Snyder, SJ. grandkids. evidence for the effectiveness of positive Lopez (Eds.), Handbook of Positive Psychology. Julian worked with Tom to explore psychology within financial planning New York, NY: Oxford University Press. his key strengths with the VIA Signature are needed as positive financial planning Peterson, Christopher, and Nansook Park. 2003. Strengths test. Tom was able to find new continues to gain prevalence. “Positive Psychology as the Evenhanded Posi- ways to use his key strengths at work tive Psychologist Views It.” Psychological Inquiry and found his stress level had greatly 14 (2): 143–147. diminished as a result. With money and Seligman, Martin E. 2011. Learned Optimism: How During the first meeting, Julian “ to Change Your Mind and Your Life. New York, skillfully disputed Tom’s belief that he well-being united NY: Random House Digital, Inc. and Adriana were not making progress through positive Seligman, Martin E. 2012. Flourish: A Visionary on goals and could not work together New Understanding of Happiness and Well-Being. psychology and financial around money. Julian also focused New York, NY: Simon and Schuster. adverse situations on the specific planning, clients can Seligman, Martin, E., Tracy A. Steen, Nansook problems, keeping Tom from personal- flourish. Park, Christopher Peterson. 2005. “Positive izing and generalizing the negative ” Psychology Progress: Empirical Validation of events beyond what was necessary. By Interventions.” American Psychologist 60 (5): integrating positive psychology into his References 410–421. practice, Julian was able to find practical Anderson. 2015. “This Is Psychology: What Is Weber, Keith. 2012. “Planning Parallels with Posi- solutions that improved his clients’ Psychology?” Video and transcript from the tive Psychology.” Bank Investment Consultant overall sense of financial and emotional American Psychological Association. Retrieved 20 (1): 21. well-being. from www.apa.org/research/action/this-is- psychology/introduction.aspx. Citation Conclusion Buie, Elissa, and Dave Yeske. 2011. “Evidence-Based Asebedo, Sarah, and Martin Seay. 2015. “From Financial planning and positive psychol- Financial Planning: To Learn ... Like a CFP.” Functioning to Flourishing: Applying Positive ogy align through the notion of positive Journal of Financial Planning 24 (11): 38–43. Psychology to Financial Planning.” Journal of financial planning, as seen in life plan- Byers, Amy L., Becca R. Levy, Heather G. Allore, Financial Planning 28 (11): 50–58. ning, financial coaching, and financial Martha L. Bruce, and Stanislav V. Kasl. 2008. counseling. With money and well-being “When Parents Matter to their Adult Children: united through positive psychology and Filial Reliance Associated with Parents’ Depres- To purchase professional reprints financial planning, clients can flourish. sive Symptoms.” The Journals of Gerontology 63B of this Journal article, contact Wright’s Reprints at (877) 652-5295. Financial planners are in a unique (1): 33–40.

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