When you think about cultural behaviours in the UK, queuing politely or even moaning about the weather might come to mind.
So, it can seem somewhat alien, or even challenging, to consider how other cultures might approach life, especially when they have words for behaviours that don’t quite translate into English.
Some of these words often reflect the deeply held values influencing how people from other countries manage their priorities and time. Surprisingly, a few of them might even offer some helpful ways to think about your own finances.
With this in mind, continue reading to discover three of these cultural behaviours that can teach you a thing or two about financial planning.
1. “Sisu” and staying resilient
The people of Finland often rely on “sisu” when life presents them with obstacles that are seemingly impossible to overcome.
This powerful word – which has no direct translation in English – is derived from “sisus”, which means “guts” or “intestines” in Finnish. As a concept, its meaning describes the Finnish people’s perseverance, courage, and mental fortitude.
It isn’t simply about finding willpower in the heat of the moment, but rather a continued determination that pushes you forward, especially when life gets particularly tough.
In financial terms, developing sisu could mean planning for the good times and the inevitable setbacks.
You could put this mindset into practice by clearly defining your goals and what you’re working towards.
Taking this time to identify your financial goals – whether that includes paying off your mortgage, helping children onto the property ladder, or even securing a comfortable retirement – you can give yourself something tangible to aim for.
Once you have identified this, you can take steps to protect it. Building your financial resilience often starts with establishing an emergency fund.
It might be worth saving between three and six months’ worth of essential household expenses in an easy access savings account.
This can provide some peace of mind knowing that you may not have to rely on funds earmarked for other purposes to cover unexpected costs, which can derail your progress towards your long-term goals.
It’s important to remember that sisu is about building this structured resilience and the mental fortitude to keep moving forward.
2. “Lagom” and finding balance
In Sweden, the concept of “lagom” – when you enjoy pleasures in moderation so you can share the excesses with others – is prevalent. It’s believed that this is derived from the Viking phrase “laget om”, the need to ensure everyone equally enjoys themselves.
Interestingly, the origins of lagom lie in the Viking tradition of passing around a horn of mead with a group, while everyone only took their fair share.
Today, however, it tends to represent a cultural commitment to moderation and balance. You can easily apply this principle to how you manage your money, too.
Indeed, one area you might want to seek balance is with your investments. If you put your money into higher-risk assets, you may have the potential for more competitive returns. Yet, doing so also tends to carry a higher chance of losing money.
Conversely, being too cautious might feel safe, but could limit your ability to achieve your long-term goals and potentially leave your wealth vulnerable to inflation.
Finding the right balance is essential when you invest, and this will look different for everyone depending on your circumstances, goals, and tolerance for risk.
Lagom might also apply to dividing your money between saving and investing.
Cash savings might help you achieve short- and long-term goals, such as holidays or home renovations. However, for long-term aspirations, such as retirement, investing might offer a better chance of achieving necessary growth.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
3. “Ikigai” and identifying your dream retirement lifestyle
The Japanese idea of “ikigai” focuses on discovering meaning within your life. Often interpreted as a “reason for being”, the concept revolves around combining the things you love, what you’re good at, and what the world really needs.
The idea is that fulfilment comes when you start to align these elements. When it comes to financial planning, this could mean thinking about your dream retirement.
A helpful first step is to picture what you’d like your life to look like after you leave the workforce. For instance, you may dream of travelling the world, renovating your home, or trying new hobbies.
Even if you simply want to spend more time with your loved ones, defining your future on paper could make it easier to identify how much you need to support your dream lifestyle.
Granted, the Pensions and Lifetime Savings Association gives a rough target, stating that a couple might require a yearly retirement income of:
- £21,600 for a “minimum” retirement
- £43,900 for a “moderate” retirement
- £60,600 for a “comfortable” retirement.
Still, these are only benchmark figures that might not reflect your own circumstances. Your retirement lifestyle, spending patterns, and health are all unique to you, which means your income needs will likely be as well.
It could be beneficial to create a detailed budget that includes your current spending, and then compare this projected budget against your existing sources of pension wealth.
Then, if you identify any shortfalls, you could consider increasing your pension contributions now to ensure you don’t affect your standard of living later in life.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available.
The tax implications of pension withdrawals will be based on your individual circumstances.
Get in touch
We could help you channel several cultural behaviours and ensure you can manage your wealth clearly and confidently.
If you’d like to find out more about the support we offer, please email us at info@investmentsense.co.uk or call 0115 933 8433.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article.
