Fiscal capacity is the ability to
understand and decide about financial transactions. Fiscal capacity changes
over the course of our lives. Financial
independence depends more upon outside factors and early life choices like
saving money, scrimping and a bit of luck.
Financial wellness is
attainable by anyone at any age and in any situation.
For example, think about when you got an allowance or earned
some spending money as a child. What did
you do with it? I remember a big stuffed
panda bear. I designed and sold my own
Christmas Cards and earned a princely sum of …….wait for it….. $10. I thought I was RICH! I saved some, gave some at church and used
the rest for that soft, cuddly panda bear I had been wishing for. The panda
bear was a reminder to me for years of what it felt like to be independently
wealthy.
At 10 we learn to save for what we want, relying on parents
or others to take care of our financial needs.
At 25 we learn to live within a
budget and often rely on elders to help us secure our first job.
At 35 we become a homeowner and investor, relying on realtors
and other professionals to provide advice and assistance. We learn to handle a
number of financial choices through education and experience. At times our education comes out of our
mistakes. At younger ages, we have time
to recover. As we age, financial
mistakes can severely impact our standard of living.
Fiscal capacity
is built over time from learning how to handle money. It is knowing how to make good decisions and
how to take action to insure our financial wellbeing.
This includes such areas as keeping important papers organized; paying
our bills timely; having a clear understanding of income and expenses; being
able to understand financial statements and make decisions about investments or
evaluate the performance of an investment advisor; being able to understand the
risks and benefits of possible deals or financial transactions; being able to
prepare for and file required taxes regularly. Protecting and preserving assets
and wealth for our own enjoyment and for those whom we wish to bless. Fiscal capacity can also erode over time.
To retain our financial health and well-being as we age, it
is vital that we regularly take an honest look at our abilities. Elders can become prey to elder financial
abuse when their fiscal capacity declines and they do not have a trustworthy
circle of care. The National Center on Elder Abuse, US. Dept. of Health and Human
Services cites the following as to who are elder abusers;
“In the only national study that attempted to define the scope of elder
abuse, the vast majority of abusers were family members (approximately 90%),
most often adult children, spouses, partners, and others. Family members who
abuse drugs or alcohol, who have a mental/emotional illness, and who feel
burdened by their caregiving responsibilities abuse at higher rates than those
who do not.”
As we age, it can help to reduce our stress to rely upon
people who are trained and licensed to handle certain aspects of our financial
needs. Building a core group of
professionals and friends who can be part of our circle of care will make it easier
for us to focus on what we value and
cherish during our remaining days on earth.
If financial wellness is not age or circumstance specific,
what does it look like? A person who is
financially well has basic living needs met through shared community property;
their own earnings or savings; inheritance; gifts, or pubic benefits. They are generous yet know what is needed for their sustanence. They do
not steal, gamble or borrow more than they are capable of paying back.
Financial wellbeing includes a lower stress level about money
because we can trust that those basic needs will continue to be met in the foreseeable
future.
We learn what we can do for ourselves;
We handle
what we know about; and,
We find
trustworthy people to provide help where needed.
Also, just like a well-run business, we can incorporate checks and balances in our financial system to guard against abuse. When we have financial wellness, our life is not focused on worry about money but rather enjoying the fruits of our labors and finding ways to share our values where we can do so.
You can learn more
about Loren Acuña and The ACE Fiduciary Group at
No comments:
Post a Comment