The PERMA model originates in the world of positive psychology, but it has much to offer about how we manage our finances and the decisions we make around our money.

PERMA stands for:

    Positive emotions
    Engagement
    Relationships
    Meaning
    Accomplishment

The idea being that if your life and work embrace all 5 of these areas, then you’re more likely to enjoy happiness, well being, and resilience: as opposed to pursuing shallow, transactional goals that are always quickly replaced by “What’s next?”

“Research has shown significant positive associations between each of the PERMA components and physical health, vitality, job satisfaction, life satisfaction, and commitment within organizations” (Kern, Waters, Alder, & White, 2014). (more)

PERMA is a useful framework to keep in mind in defining our values and goals, which should ultimately be the driving force behind any decisions about our money. With a clear picture of what we value, we can determine specific goals to work toward and then make decisions about finances that help bring lasting satisfaction. The PERMA model is especially relevant for people in, or transitioning to, retirement. Many people fulfill some or all of the 5 elements through their jobs. As the adage goes, you shouldn’t “retire from something, but retire to something”. Retirees or Pre-Retirees will benefit from crafting a day-to-day lifestyle that incorporates all 5 categories of the PERMA model and creates substitutes for each of the 5 categories where the current source might be lost by leaving a career.