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We're all familiar with the traditional measures of financial success: earning a solid income, saving on a regular basis, accumulating a sizable nest egg and growing your net worth. But excelling in these matters doesn't necessarily lead to the sense of satisfaction that financial security should bring.

For example, many retirees who have more than enough tucked away for a secure retirement suffer from what I call "spendaphobia," or a deep-seated fear of running out of money that prevents them from enjoying the savings they worked so hard to accumulate.

Achieving true financial health isn't just a matter of saving money and building wealth. There's also an emotional component that involves feeling positively about your finances and your ability to determine your financial future.

And in order to attain true financial health, "what you really want is to have both economic stability and emotional well-being," says Sarah Newcomb, a Morningstar behavioral economist and author of a new Morningstar study titled When More Is Less: Rethinking Financial Health.

To be clear, Newcomb is talking about emotional well-being only as it relates to money and finances — specifically, whether you have positive associations and an overall sense that you can exert control over your financial future, or more negative feelings that create a sense of helplessness or pessimism about your ability to improve your financial prospects.

Drawing on results from a recent survey of 500 adults that served as the basis of her study, Newcomb has identified two mental exercises that people can use to increase their chances of improving their overall financial health.

1. Think long-term — and be specific.
People who think further into the future tend to make better financial decisions than those with a short-term financial time horizon. For example, among the people Morningstar surveyed for its report, Newcomb found that those who thought ahead even just a few years about their financial situation had about four times as much money saved as those whose time horizon was just weeks or months.

This relationship — the longer one's perspective on time, the better one handles virtually all money matters — held regardless of income, education, age, or gender.

Our brains, unfortunately, are hard-wired for immediate gratification, which makes us prone to short-term thinking. Still, there are ways to train ourselves to take a longer view.

One method Newcomb suggests is to get yourself to visualize where you would like to be financially at specific points in the future, say, five, 10, or even 20 years down the road. You can then assess whether your current financial habits are likely to get you there and, if not, consider what you need to change. The goal is to reinforce the notion that there's a direct correlation between the financial decisions you make (or fail to make) now and where you are likely to end up in the years ahead.

As you're going through this visualization process Newcomb also recommends that you be as specific as possible. Instead of thinking in vague terms and phrases like "I'd like to save more for retirement," or "I want to enjoy myself once I retire," try to add some detail: "I want to boost my savings rate by at least a percentage point a year so I'm saving 15% of salary within five years" or "I want to learn to speak Italian and spend a month living in Tuscany during my first year of retirement."

The clearer you can be about your goals and the retirement lifestyle you envision for the future, the more effort you'll likely expend to make it a reality.

2. Accentuate the positive.
People who have a sense that they are able to exert some control over their financial lives tend to make wiser money decisions and feel better about their financial situation overall.

Indeed, Newcomb found that the people she surveyed who agreed with the statement "I create my own financial destiny" tended to have much more positive feelings about their finances than those who felt they have very little power when it came to financial matters. In many cases even people with lower incomes who believed they hold some sway over their finances had a greater feeling of pride and satisfaction in their financial lives than those who earned more but who lacked a feeling of control.

One way to cultivate a greater sense that your decisions can significantly improve your financial prospects is to avoid thoughts that may undermine your confidence and emphasize those that foster a feeling of empowerment. So instead of dwelling on past mistakes — failing to get an earlier jump on saving, buying into a hot fund just before it hit the wall, whatever — celebrate the things you did right: signing up for your 401(k), performing a retirement check-up, refinancing your mortgage to take advantage of lower interest rates.

"The point isn't to stroke your ego, but to give yourself an internal boost by looking at your successes and remembering the times you've been financially responsible," says Newcomb.

Of course, any sense of self-assuredness must also be grounded in reality if it's to be constructive. Believing that you're the master of your financial universe isn't very meaningful or useful if the belief isn't backed by a solid financial foundation or at least progress toward one.

It's also important to remember that, however competent or committed you may be, your sphere of influence is limited. You can't control the ebb and flow of the economy or the ups and downs of the financial markets.

Which makes it all the more important that you direct your efforts to the areas where you do hold some sway, such as how much you choose to save, how you balance risk vs reward when creating a portfolio, and how much you pay in fees on the investments that make up that portfolio.

Bottom line: If you want to be truly financially healthy, you need to focus both on the numbers side of your finances and the emotional aspects. After all, what good is feeling confident about your financial prospects if your self-assurance is unrealistic?

And what's the point of working hard throughout your career to attain financial security if you're not able to take pleasure in it?

Walter Updegrave is the editor of If you have a question on retirement or investing that you would like Walter to answer online, send it to him at You can tweet Walter at @RealDealRetire.

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