One of the most powerful personal finance tools you have at your disposal isn’t a spending or investment app. Or, a spreadsheet. It isn’t your income statement or balance sheet, either. It’s a question.
Preferably one that begins with the word – “What?”
I have long known this. It’s one of the reasons you hear me tout the importance of insight over information; it’s why I say let the “activity” of inquiry guide the actions you take.
But last week’s Financial Intimacy Hour provided even more proof! My guest, Heidi Johnson, and I had a vibrant conversation about the ways in which curiosity can improve your career, life and money decisions. (click here to grab the replay.)
When I asked Heidi what one thing would she recommend for living more curiously in 2015, she responded: “…ask ‘What Else?'”
I plan to. You might want to give it a try, as well.
This time of the year gets crazy. And not just because it’s the holiday season. But because it is also when the usual year-end review and new year goal-setting kicks in. In between the holiday gatherings and gift shopping, you’re most likely reflecting on this year’s goals and dreams, and claiming how you want 2015 to be different (better, perhaps?).
And if you are like many of my clients before we start to work together, ALL of this is happening in your head!!
The “busyness” of the season prevents you from slowing down long enough to get out on paper where you are versus where you thought you’d be, along with where you still want to be.
I know you are smart, but you need to get out of your head! Especially if experiencing more success (however you define that) is one of your aims.
Make 2015 the Year of “What Else?”
Asking, “What else?” can help.
Specifically, it can stop you from only:
- doing your year-end assessment, mentally
- declaring your goals and dreams, vocally
- affirming what you want to change, vocally
The benefits of asking “what else?” are many:
It sets you up to review the past and plan for your future – without judgment.
It gives you an opportunity to dig deeper to ensure you go beyond the surface (aka the obvious).
And when those urges to lay out a how-to plan surface, it will help you table that temptation until a more appropriate time when such a step will actually have some value.
Imagine if your every desire for 2015 came true – what would accomplishing your goals look like; how would it feel to achieve your dreams; what habits and choices do you envision needing to make?
Asking “What else?” will help you navigate and negotiate the space between your current reality and the one you desire to create. It will ensure you are both strategic and tactical – at just the right times and in the right way.
For me, one of the ways I am using the “What else?” question is to help me uncover the questions I didn’t ask (looking back) or haven’t yet (looking forward).
So as you begin to wind down 2014 and welcome 2015, take ten minutes each day to ask “What else?” Ask it when looking at the various dimensions of your money (earn, save, invest, and spend) and dimensions of your life (family&friends, professional, finances, values/spiritual), and how these all intersect.
As I told a journalist who interviewed me recently, sometimes the action you need to take is to ask a question.
Questions help you get out of your head. They help you shift from over-emphasizing knowing-how to understanding “knowing why.” Remember, your emotions drive your money decisions. Finally, questions – especially “what” inspired ones – truly are your most powerful tool for getting money to do what you want it to do for you. So…ask ‘em and do it often!
Perhaps you can relate: You experience something traumatic. It’s followed by a strong desire to change something you can control – to offset the change you couldn’t. If you’ve ever experienced this, then you’ll understand my deep desire for a little home makeover.
With the help of a dear friend, when I welcomed guests into my home to continue the Thanksgiving tradition of my mother’s and mine, my home had a new look – courtesy of a few additional pieces of furniture and accoutrements and some furniture rearranging. With small tweaks, my home was transformed. Toni helped me reconfigure (and re-envision) my space. In the process, she did for me concerning my home what I do for my clients concerning their finances: find the unfamiliar in the familiar.
And I was like a giddy child on Christmas Eve.
A perfect feeling given that the holiday season is now upon us and officially in high-gear.
For you and for me, the childlike wonder of the season doesn’t just have to be confined to this time of year. It can be a constant state of mind…a standard way of approaching decisions about your career, life and money.
However, that requires that you intentionally practice curiosity to:
- Answer a pressing or recurring question
- Resolve a conflict you’re experiencing
- Address a nagging contradiction of expectations and/or beliefs
- Ease your discomfort
- Close the gap between what you do know and what you don’t know
- Discover the gap between what you’re seeing and noticing
But, how often do you do that? Can you count the number of times lately when you preceded a decision or action with a statement that began with, “I wonder if…or I wonder what would…”
This sort of inquiry is why most of us use smartphones.
This sort of inquiry is why you can stream music, movies and TV shows in your home and on the go.
This sort of inquiry is why there are financial apps that can help you monitor your spending and manage your wealth in ways unforeseen just five years ago.
Curiosity alters your reality.
If I may be so bold, I’m going to venture to say you’re not being curious enough – you’re not engaging with life with childlike wonder.
It’s not that you don’t have an inquiring mind. After all, you were born with it. After all, it’s likely what is behind many of your accomplishments. But, I suspect, you’re not exercising the power of curiosity as often as you could.
The way I see it, here’s the underlying problem: for far too many adults, the obligations of adulthood can make what is innate (curiosity) become a dulled emotion. You’re constantly moving from task to task and decision to decision that you rarely pause long enough to take notice of what you’re seeing.
As a result, you become satisfied with surface questions, answers, outcomes and justifications.
As a result, you tend to value what you do know more than the surprises of what you don’t know.
As a result, your expectations and assumptions don’t evolve.
And this happens all because going deeper seems too involved – it requires too much time and effort.
Finding the New in the Same
I have been in my apartment for twenty-two years. So, I am quite familiar with my space. And, quite honestly, I was in a visual rut. Metaphorically, I was not applying the same talent, skills and intellectual vigor when it comes to my work as a financial behaviorist to my living environment. Yet, angling the couch in a different way; switching a painting from my bedroom to the living room; adding a few floor and table-top lamps; and taking more advantage of my 10′ ceilings, to name a few, makes the same look new.
“Curiosity is making the choice to look deeper into everyday things and seeing their true significance.”
The end of the year and the holiday season are perfect times to seek and discover the unfamiliar in the familiar.
It’ll help you engage with family, friends and colleagues differently – with more openness – during gatherings.
It’ll help you take stock of the year that is coming to a close with a little more compassion.
It’ll help you look at what’s happening with your money with fresh new eyes.
It’ll help you plan and prepare for a new year with a bit more energy and excitement.
If you knew there were questions (or themes) and small tweaks that could help you practice curiosity with more intention, would you be interested in learning about them? What if the same will also help you to make better decisions concerning your career, life and money? If yes (!), then join Heidi Johnson and me for the final Financial Intimacy Hour of 2014!
On Wednesday, 10 December at 8pm EST, we’re having a conversation about the role of curiosity and its impact on your career, choices and financial success. Click here to learn more and to register.
Here’s an excerpt of an email I received yesterday.
I would like to wish you a very Happy Thanksgiving. I know this year’s Holiday Season will be very different than any other, but from what I know of you, I have a feeling that your focus will be on all the things you are thankful for, as you reminisce on times past, cherish wonderful and joyful memories, and eagerly anticipate exciting days ahead.”
To say that I was feeling verklempt after reading those words is an under-statement.
Tomorrow is definitely going to be a weirdly beautiful day for me. It’s Thanksgiving in the U.S. – bar none, my favorite holiday. Friday (11/28) also happens to be my birthday. So, for me this holiday always doubles as a birthday soiree, too.
Although I’ve hosted Thanksgiving for some 20+ years, this will be my first time frying a turkey for the occasion. It’ll also be my first holiday without my co-host – my beloved mother, Fontilla A. Timmons. (The photo to the right is from Thanksgiving 2013.)
No doubt, this holiday will be different than any other. But I’m so happy to continue a tradition of my mother’s and mine – one we started long ago. I am excited to welcome friends into my home and to make sure their bellies and souls are well-fed.
As I’ve been prepping for tomorrow’s dinner party, the holiday rituals of my mother’s and mine are clearer to me now than ever before. Likewise, my awareness of the power of presence (showing up is critical) and the healing power of connections and intimacy is heightened.
Rituals. Presence. Connections. Intimacy. These elements aren’t just present in my relationship with my mother or the one I have with the guests with whom I’m sharing my home and holiday. They exists in all relationships – including the one you and I have. And, I’m reminded that is been awhile since I’ve told you I appreciate you.
So before I go back into the kitchen, I just want to make sure you know…
It’s truly a privilege to be a part of your world and to have you be a part of mine. Thank you!
May you create some beautiful firsts this holiday. And as for those bitter-sweet firsts, I wish you strength and peace.
Wishing you and yours the Happiest Thanksgiving!
At least once or twice a day, I peruse finance.yahoo.com to quickly peruse the latest in financial news – especially to see what’s trending in personal finance. This particular post, “How this celebrity couple bounced back from bankruptcy,” caught my attention not because of the title (some celebrity or another is always declaring bankruptcy it seems), but because of the couple in question: The actor and comedian, Flex Alexander, and his wife, the R&B singer, Shanice.
Perhaps if I had cable, I would have known about their reality-tv series on the Oprah Winfrey Network. Their show, “Flex and Shanice,” debuted this month and chronicles their financial comeback. But I don’t have cable. So the Yahoo post was the first I heard about their story of going from earning approximately $1.3 million a year – for about five years – to losing their home to foreclosure.
The article and a video interview I found promoting their show revealed one of the things I talk about in my book, “Financial Intimacy” – the issue of proximity and perspective. It is a combination that can be so insidious when it comes to your relationship with money and how you manage it.
Often, you’re too close to see what’s coming your way and about to hit you like a ton of bricks.
Your financial reality is changing right before your eyes – in a not so good way. But by the time you notice what’s unfolding, you’ve lost the chance to get ahead of the situation to react proactively.
I really appreciated the thoughtful and measured way Flex and Shanice came to the conclusion to do a (financial) reality show. And, I love their goal of sharing the lessons learned from their journey of financial hardship to financial recovery as a way to help others.
Unlike some celebrities whom you feel just tell their “dirt” because they’ve bought into the idea that any publicity is better than none, I didn’t get that sense from Flex and Shanice. From the 11-minute video clip, I loved “seeing” how they had/have each other’s back — you can tell they were/are in this thing together.
I am known for saying money is an under-utilized communication tool. It’s also a very humbling tool, too.
As “Hollywood” couples go, they didn’t live over-the-top. But everything is relative, right? What Flex made in a month when his show was on the air, some people (barely) make in a year. He talked about money flowing and making $25,000 a week. However, they didn’t adjust their lifestyle when the rhythm of their financial inflow slowed. Shanice talked about being a child star and how others always took care of everything – first her mother/manager, and then Flex. So, she was slightly in the dark about how dire their financial situation was.
With just these two snippets they’re already teaching, by example, one of the behaviors money demands of us: pay attention!
As I continued watching their video, I couldn’t help but think of Shira Boss’ book, “Green With Envy.” A great book about the financial lives we lead and the stories we tell ourselves about ourselves. As well as the stories we tell ourselves about what’s going on in other people’s lives. (Hint: it’s not always what it looks like!)
This came to mind when Flex mentioned feeling embarrassed, ashamed, and guilty – reasons that also made him a little weary of going public in such a public way. Granted, you may not have had to declare bankruptcy, but have you made a financial blunder that makes you shrink just a little bit when you think about it? I know I have.
I’d be curious to know how intentional the producer’s were in deciding to debut the show right before the holiday season. If it wasn’t intentional, it was a brilliant accident! Because this is the time of year when a lot of muck comes up for people, in general, and about money, in particular. And if you’re feeling bad or disenchanted, this time of year certainly doesn’t help.
A show about making mistakes, forgiveness, partnership, teamwork, dedication (to each other and the goal of getting your financial house in order), humor, redemption, starting over, faith, reinvention and having a plan of action, certainly gets my vote.
Congratulations to Flex and Shanice for saying, in essence, to hell with money shame! I’m cheering for them, excited about what they’re teaching their audience via their bounce-back, grateful that what’s personal is also almost always universal…and am hoping I can catch episodes online!
In preparation for the upcoming Thanksgiving holiday, I purchased an indoor electric turkey fryer! (Quite excited!) I purchased it this weekend from Amazon and got a great deal because of their “Countdown to BlackFriday” sale.
Several times throughout the checkout process, I was “invited” to become an Amazon Prime Member. For a split second, I considered it. But after a quick mental audit of how often I order from Amazon, I couldn’t rationalize the $99 annual fee.
The fee made me think of what one client recently said to me:
“I want money to stop slipping through my hands…”
It’s a sentiment I hear often; it is what can so easily happen in our subscription-services economy; and it is precisely what spending $99 on Amazon Prime would have felt like for me.
And it was exactly how I was feeling as I mentally reviewed certain other on-going subscription based fees I incur – whether they are charged annually or monthly.
Perhaps the charge is nominal so you rationalize it by saying, “oh, it’s only $5.99 a month…”
Or maybe you say, “well, if I use the service once or twice, then the annual subscription has paid for itself…”
Or worse yet, maybe you don’t even realize you’re paying for a product/service each month. This happened to a friend of mine; she finished her doctoral thesis six years ago yet she recently realized she was still paying for subscriptions related to her research work that is now complete. To the tune of 320 Euro a year or $400 a year…for six years!!! You do the math.
Subscription services – the “new” new way to consume and buy
Subscription services aka the subscription economy isn’t new. Magazines have been doing it for decades. But today, this model is popping up in all sorts of industries. Including personal finance! Case in point: LearnVest, or a little closer to home…the Financial Intimacy Lounge – a not so subtle plug -:).
In fact, John Warrilow, author of the forthcoming book, “The Automatic Customer: Creating a Subscription Business in Any Industry,” said at Inc. Magazine’s GrowCo conference: “…[subscription businesses] provide the greatest value to both the [business] and the customer.”
[business] and the customer.”
When I think of value, I think of it as expressed in terms of uniqueness, convenience, variety, simplicity, flexibility, affordability and, well, a changing value system with regards to how consumers behave in almost every aspect of life.
I also think of value as expressed in terms of a continuing relationship.
And just like all on-going relationships, when you get lazy about ‘em and don’t pay attention to what is and what isn’t working, well, you know… Someone is really happy and the other one ends up quite unsatisfied.
Don’t be unsatisfied
As we near the end of the year (can you believe it?), now is actually a good time to ask yourself if you are stuck in a recurring payment trap with some of the subscription service/s you use. In other words, is what you are buying and consuming via your subscription giving you the value you want. Or, is it the cause of money slipping through your hands, too?
Maybe the monthly or annual amount isn’t “a lot” in the grand scheme of things. But the financial detox exercise I’m about to propose is less about dollars and cents in the absolute sense. Instead, it’s about being “conscious and intentional” about what you’re choosing to do with your money and whether those funds could be (re)directed to something else that has more value to and for you – whether you measure that based on pleasure or utility.
So here goes:
- Grab your banking and credit card statements for the last three months. If you receive statements electronically, please print them out. (You can always recycle the paper.)
- Review those statements and highlight your recurring expenses. Choose one color for monthly expenses and another for annual ones.
- On a separate sheet of paper (or in a spreadsheet), list the recurring expenses and rank them according to three categories: pleasure; utility; waste of money.
When I did this piece of the exercise, I chose to keep Netflix – even though I don’t use it often. It’s nominal and I like the “option” of having it. Yet, I chose not to renew my ZipCar membership. I’ve rented a lot of cars in the last two years – not one of them was a ZipCar!
- In this same spreadsheet, sum up each category…you just might be shocked at what you discover. In addition to evaluating the total financial outlay, look to see if your automatic withdrawals are spread throughout the month. This will help manage your cashflow and ensure you’re not lopsided leaning more toward the beginning or end the month.
- Make an assessment of each line item.
Anything you deem to be a waste of money, get rid of immediately. Or, downgrade your plan (if that’s an option). Before I sat down to pen this, I did that with a business expense. I’m not quite ready to get rid of the service completely, but I’m also not using all the features of the pro plan, and I’ve decided to stop spending money based on the “maybe, one-day I will thinking.”
- If possible and appropriate, migrate the monthly or annual withdrawals for your recurring expenses to one banking or credit card account for easy tracking.
The beauty of subscription services is that they are really all about YOU. It’s about access the way you want, how you want it, and when you want it. Fundamentally, it’s about choice – your choice. And, with choice comes control.
You are in control.
Don’t abdicate that control by paying recurring fees for products/services you no longer find pleasure in or that have outlived their utility. Because, sadly, some businesses are counting on you to trivialize a “small” dollar amount. Or, for you to be so busy living your life that you completely forget about what you committed to.
If you find money slipping through your hands, at least don’t let it be with regards to subscription services.
p.s. I’m so excited to be a guest speaker in Bari Tessler Linden’s The Art of Money Symposium on enTheos.com – joining some other cool peeps like Barbara Stanny, Mindy Crary and many others. Check us out here: https://www.entheos.com/The-Art-of-Money
Yes, it’s rather bold of me to presume you have an issue when it comes to retirement savings (and planning). But check out these stats:
- According to the Bureau of Labor Statistics, just 53% of American workers participate in any type of retirement plan at work.
- A recent TIAA-CREF survey found that 57% of workers did not increase their plan contribution after their last raise. (Millennials were the exception.)
- The Federal Reserve’s Report on Economic Well-Being of U.S. Households in 2013 reports that nearly half of all Americans haven’t planned for retirement and that 31% have no retirement savings or pension.
Given these numbers, I feel pretty confident in my ascertion. Especially when you also tack on the finding from the financial research firm, Hearts and Wallets, that Americans rate retirement planning as the most difficult of financial tasks to do.
You’re probably not getting as much as you could from your retirement account.
A Little History
Today, in general, and at this time of year, in particular, there’s so much talk about 401ks and retirement planning that it is easy to forget that this part of the financial services industry is young – as in approximately 30 years old.
For a variety of business and regulatory reasons, companies started migrating from defined-benefit plans to defined contribution plans in the 1970s. The former guaranteed you a certain income in retirement, but how your money was invested in the pension plan was wholly controlled by your employer. With the latter, you control everything – from how much of your current income you contribute to how you invest/allocate your contribution. That also means, the amount of income you’ll receive in retirement from your 401k rests entirely on your shoulders.
And more often that not, that responsibility comes with very little personalized guidance. Hence, the sobering stats above.
But I believe there are other reasons for these jaw-dropping percentages:
- Retirement planning doesn’t feel urgent
If you have 20, 30, 40 years until you plan to retire, it can seem like you have all the time in the world because 65 (or 70) seem so far away. So, you get that retirement savings and planning are necessary. But it just doesn’t feel urgent.
- Economic realities are not factored in…on a personal level
You very well may be one of the people whom hasn’t seen a raise in five years (or more!). Yet, your cost of living certainly hasn’t stayed stagnant. So, your challenge is being able to *see* how the heck you can save against the backdrop of flat wages and rising expenses.
- Forecasting the future is overwhelming
“How can I know how much income I’ll need when I retire?” “How can I know how long I’ll need that income to last?” “Will my retirement expenses really go down?” “What about healthcare costs?” The premise of retirement planning is based on a variety of uncontrollable unknowables. And if making decisions amidst so much ambuguity seems futile, the alternative of sticking your head in the sand actually seems more feasible
There’s An Alternative
Think about how you currently manage your retirement account?
What would be different if you considered it necessary and urgent?
If you’re in the 47%, what would be different if you started with just 1% of your income?
If you’re in the 43%, what would happen if you made the commitment to save your next raise by assigning some or all of it to your retirement account?
What would happen if you were shown a clear cut process for investing in your retirement account?
Can you now imagine retirement savings (and planning) being easier? Can you now imagine having more confidence about your decision-making?
I can…and it is what I want for you.
There’s still time to join us for the investment training series, “What the Hell Should I Do With My 401k?”
The next live class is Monday, 3 November at 8pm ET.
p.s. when you register, you’ll automatically get the replay link for the session held on Monday, 27 October.
p.p.s. this series is applicable if you have a 403b, IRA, Roth-IRA, SIMPLE-401k or SEP, too.
On the day that I write this, the stock market is up (as measured by the S&P500 and Dow Jones Industrial Average). The S&P is on track for a fifth straight session of gains. Yesterday, the Dow closed up, over 200 points and it is currently up another 35 points.
That wasn’t the case about two weeks ago.
All the major indices were down and many pundits were forecasting a pending market correction.
As a result, Kate* got spooked and did what I describe as the unthinkable. Fearful of losing money in her 401k, she sold ALL her mutual fund holdings and parked her proceeds in a money market fund (i.e., cash).
She made a classic 401k investing mistake, one I’ve seen many people make going as far back as the market crash of 1987 and more recently in 2008. The market goes down, some people panic, and the way they react is to sell. They have temporary amnesia and forget that going up and down is what the market does – it’s how it naturally behaves.
Jess took one of my courses and followed my 401k investing instructions almost to a “T.” She made sure she diversified her portfolio, she just went a wee-bit overboard. When she and I started working together 1:1 and I presented my analysis of her portfolio, she was surprised to discover that most of the twenty mutual funds she owned were investing in the exact same companies.
She made another classic mistake when it comes to 401k investing: confusing having many with being properly diversified.
Angela, now in her fifth year at her current employer, hadn’t been paying much attention to the 401ks she left at previous employers. A combination of disinterest and not really knowing what to do, coupled with the fact that her investments were performing pretty well, she just left them where they were – always with the intent of, “I’ll get to it eventually.”
Leaving 401ks with former employers is another classic 401k investing mistake that people make.
I’ll admit: of the three above noted mistakes, Kate’s is the one that most horrifies me.
Selling when the market is down is often considered a way of controlling loses. It’s an action that eases people’s fears the most. Yet, it’s also the one that tends to be the costliest, in the short and long term – especially in a 401k plan.
Because she sold when she did, she did the opposite of one of the primary rules of investing: buy low/sell high. And her initial action to sell and subsequent action of not immediately getting back in the market implies she’s trying to time the market; she’s waiting for an all-clear signal. Truth is, no one can time the market and if a financial professional tells you they can, run in the opposite direction as fast as you can!
All three of the 401k investing mistakes I’ve showcased are examples of you not winning when it comes to investing.
Having more mutual funds than you need results in you being over-exposed to the risk you were attempting to mitigate.
When you leave 401ks with old employers, you usually give up control because you typically can’t make any changes as to how that money is invested.
These three mistakes are reflections of emotions driving money decisions – whether those emotions are fear, over-confidence, or apathy. And when that happens being rational goes out the window and you unwittingly bet against yourself – even though, on the surface, it may look like what you’ve done is in your best interest.
Winning at investing isn’t about what happens during trading hours, it’s the culmination of choices made before, during, and after trading hours. It’s the result of a disciplined approach – one that is personal and rational.
On Monday, 27 October, I’m kicking off a four-part investment training tele-class series, What the Hell Should I Do With My 401k? The goal: to ensure you don’t bet against yourself and make irrational investing decisions that end up costing you big money.
The first session, “To Win at Investing, Don’t Let Your Emotions Get the Best of You,” is also being offered as a free, stand-alone tele-class.
It’s open enrollment season, which is the perfect time to take a look at your 401k retirement account.
If you don’t know how to select mutual funds or put together a portfolio of funds;
If you don’t know how much to contribute to your retirement account and the funds you select;
If you didn’t get around to enrolling; or
If you’ve been treating your retirement account like you’re a day-trader, I hope you’ll join us for this investment training series.
We start Monday, 27 October. Here’s the link, again, to learn more.
p.s. *all the names are pseudonyms.
p.p.s. if you have an IRA, SIMPLE-401k or SEP, this series is applicable for you, too.
I read somewhere that if you could achieve your financial goals by simply putting your money away in the bank you wouldn’t need a plan.
That’s silly to me. That’s like saying as long as you have gas in a car you don’t need directions to drive to a place you’ve never been to before.
Yet, this way of thinking represents a common mindset when it comes to managing money and preparing a financial plan. And, in my opinion, it is why so many people don’t get as much as they could from their money.
Today is the last day of Financial Planning Week – the 13th Annual one no less! Granted, this factoid may not make your heart stir and go pitter-patter. But, I thought today would be as good a time as any to share what I believe financial planning is really all about. I suspect if more people adopted this perspective, more people would get excited about preparing and editing a financial plan. Imagine that!
Besides b.o.r.i.n.g., what usually comes to mind when you hear or read the words “financial planning?”
In no particular order, I bet you think about some if not all of what’s listed below:
- Your lifestyle
- Your career and current & future earnings
- Children and their education
- Parents and their well-being
- Your own well-being
You may even wonder if and at what point the help of a financial professional makes sense.
I also bet for each of the above bullet-points (and others I may have overlooked), your focus has been on the numbers – the numbers you know and the numbers you forecast. It all comes back to the numbers because the presence or absence of money is what typically drives your decisions.
Financial Planning: The Movie?
But what if instead of looking at financial planning as an exercise in making the numbers work, you thought of financial planning as the telling of a story through a collection of vignettes? Vignettes that when woven together resemble a long-format television series, with many seasons, about your life – the one you have and the one you want.
Not only are you the star of the series, but you also play the role of producer, writer and director. And you become a quadruple threat for the small screen the likes of George Clooney for the big screen. Much more exciting, right?!
You may be rolling your eyes right about now. But hear me out…
There are a number of benefits to viewing financial planning through the lens of making a critically-acclaimed and successful series. To start, you begin to recognize that even if everyone follows the exact same steps (think of all the long- format shows on HBO), the results won’t be precisely the same.
Thus, the reason I say financial planning isn’t supposed to mean the same thing to everyone.
By thinking “story” over the numbers, you’re invited to connect the dots that represent the pieces of your life in a more profound way. The result: You have to bridge the gap between your vision for the future and your present-day reality and consider the tools, resources, and people that will help you close the gap between here and there. That includes:
- Using money as a tool, but not the only tool!
- Remembering that emotions are not black-n-white. And neither are numbers. True, the numbers may be negative or positive, but the “story” behind the numbers is rarely as black-n-white as you might think (or wish).
- Viewing financial planning as less about planning for retirement and more about planning out your entire lifestyle cycle (the on you have, the one you want, and the one that will help you bridge the gap).
- Embracing ambiguity and the practice of scenario planning via story-boarding.
- Using scenario planning to help you identify the likely obstacles you’ll encounter and manage the ones you’ll actually face.
- Learning to objectively observe your patterns, habits, and anomalies.
- Learning to objectively see the relationship you have with money, and how and where you need to work on it.
- Remembering you never do it alone.
There’s a term in the film industry called the “cutting room floor.” It pertains to what’s been omitted from the final footage. The way I connect this to financial planning is how the results you see reflects a lot of the intangible choices and decisions you’ve made but others can’t “see.”
If you’re like most people I know and clients (before they became clients), you’re really much more interested in being with family and friends; focusing on your career; and enjoying your leisure time and a lot less interested in managing your money and creating a financial plan. As a result, you either don’t have a plan or you have a one that was haphazardly put together and may not be current.
However, when you don’t have a plan (or a current one), you don’t know what you need to do consistently and you don’t know when and where you need to evolve in order to achieve your financial goals.
So, in honor of financial planning week, I ask: do you have a viable and or current financial plan? If not, what are you waiting for? And, how might thinking of it as a tool for making a critically-acclaimed and successful long-running series about your life help you get started?
I received an email asking if I do one-off consultations, to which I immediately replied, “Yes!”. When I followed-up with her a few weeks later, here’s an abstract of what she said in return:
“I decided against financial counseling at the moment just because I don’t think I’d listen to any advice and rather think I’d really only want to hear ‘you’re doing great!'”
Ha! I love her transparency and honesty, and I told her so.
Her degree of self-awareness is priceless. It took guts for her to disclose what she wrote. And I really appreciate it because, in truth, she likely (and bravely) expressed what many people feel but rarely admit to anyone but themselves.
And, I don’t blame her.
So much of what is touted as financial advice today (or information as advice) puts people on a guilt/shame trip. Even if you’re doing great, you still feel like you’re not doing enough. Even if the proffered suggestions are for your benefit, you just don’t want to hear you need to tweak anything.
Can you relate? I know I sure can.
You and I have an intriguing relationship with feedback. On one had, we want and we know we need it. Yet, as this member of our online community exemplifies we prefer a certain kind of feedback. We want to hear the Tony-the-Tiger version of “you’re doing great!” To hear anything otherwise is akin to hearing you’re wrong.
Don’t Disturb This Groove
Indeed, the need to be right may be holding her back. But I credit this reader with listening to herself and making changes at a pace that feels comfortable. And I have every confidence that she’ll know when she’s ready to hear my perspective and will reach out, again, when the time is right for her.
That said, here’s something I know for sure:
While the pop/R&B song from the late 80s would have you believe otherwise, you need to disturb some aspect of your groove for progress to happen.
The sentiment expressed in her response is another example that illustrates just how connected emotions are to your actions and behavior…and how they can also be connected to your net worth. For you and me, her revelation provides both priceless and relevant lessons and reminders that reach far beyond money, though:
- Some changes in your life only happen when you’re ready.
- Other changes happen regardless of your readiness, but your acceptance of those changes only happen when you’re ready.
- Feedback works best when you are open and your curiosity about what you don’t know exceeds your comfort zone with what you do know.
- The possibilities of the unknown must excite you more than your current set of circumstances.
- The discovery process of moving from the unknown to the known must affirm + inflate your ego and sense of self-worth more than what you’re currently experiencing.
- The conflict between wanting to be right and wanting to avoid being wrong must be low on the spectrum of low to high.
The sentiment behind – “I’d really only want to hear, ‘you’re doing great!'” – brings to mind the very unscientific survey I conducted last year. I randomly asked total strangers on the streets of Brooklyn what came to mind for them when they thought of love and money. One of the respondents said, “We don’t talk about it…I don’t want to talk about it because then I’d feel like I have to do something.”
How fascinating that both the reader and survey respondent made the assumption that what will be discovered will somehow be less than desirable.
How fascinating that in both instances what’s implied is the notion that your freedom, independence, and ability to choose will somehow be diminished.
The need to be right; the need to feel accepted; the desire to feel affirmed are all natural and understandable. After all, emotions are the undercurrent of your actions and behavior. You filter every decision, including those concerning money, through the lens of your emotions.
The challenge, always, is to make sure your emotions are working for you…not against you delaying or blocking you from getting even more from your money and for your life than you could ever imagine!
In the end, the key is to remember that excellent financial advice doesn’t need to put you on a guilt or shame trip to be valuable and effective. It is absolutely possible to get feedback that may differ than what you’d expect AND hear, “you’re doing great!”.
Financial advice can be constructive and satisfy your need to be right and to feel accepted and affirmed.
p.s. Given that the question that inspired today’s post came from a long-time reader, it’s clear I need to do a better job of marketing. So on the off-chance you’re wondering if I provide one-off consultations, you can click here to learn more about how to work with me.
p.p.s. The realm of love + money is a perfect playground for working out and working on the sentiments of wanting to be right and wanting to hear, ‘you’re doing great!’. I got a chance to address these themes with Monique Brown, host of The Total Woman Summit and founder of the Feminine Allure Academy. My interview went live last week (sorry for the delayed announcement), but click here to check it out the replay. The response has been tremendous!
“How strange that the nature of life is change, yet the nature of human beings is to resist change.” Elizabeth Lesser
With the recent death of my mother, my life as I knew it has been completely upended. I feel slightly adrift and a bit unsettled as I negotiate an awkward emotional space and navigate the unfamiliar gray zone that comes with any transition.
I’m dealing with:
- a sizeable dose of uncertainty about new responsibilities and new choices;
- a little bit of overwhelm about the multitude of decisions to be made and actions to be taken;
- some identity adjustments that are afoot.
Talk about having my comfort zone interrupted!
But let’s face it, the “symptoms” of my life change aren’t unique to me or to circumstances of death. They accompany almost any major transition whether it’s been willfully initiated or unwilling imposed – whether it’s of a sad or happy nature.
In truth, the symptoms I’ve described could equally apply to you. So, the question isn’t so much if you’ll experience a major change over the course of your life. It’s not even really a matter of “when.” It is…
How will you manage the impact of the life change on your emotions and your finances – especially when your comfort zone has been dramatically altered?
To begin to answer this question, the definition of what triggers a transition needs to be expanded beyond the usual culprits of death, birth, divorce, and marriage to encompass a multitude of life-stage and life-style changes. Similarly, you need to acknowledge what’s really happening when a life change event occurs: you’re recalibrating your journey. That means you need to adjust your life + financial road and role maps.
Editing these maps will help you (and me) manage the questions that arise during the temporary state between what was, what is and what will be. It’ll help us address the anxiety, indecision, and fear that bubbles up. It’ll provide some structure and guidance to help us re-boot.
In March of this year, I asked Valerie Coleman Morris (former business anchor for CNN) to be my guest for this month’s Financial Intimacy Hour and we agreed that we’d focus on the theme of transitions. At the time, I had no idea the topic would hit so close to home. There’s a part of me that would rather stay in my cocoon and skip this topic. But that wouldn’t be honoring my mother and how she lived and faced disappointments and challenges.
So, on Wednesday, September 17th at 8pm EDT, the Financial Intimacy Hour is coming off of summer break. And I hope you’ll join me and my guest for, “Comfort Zone, Interrupted! How to Thrive In and Through Your Next Major Life Change.”
You’ll learn how to:
- re-gain your focus even as things remain unsettled. A cloudy mind makes poor choices.
- re-prioritize the decisions you make and the actions you take. When you’re in the throes of a transition, managing your energy becomes critically important!
- redesign your road + role maps so that your money supports you as you shift from where you are to where you want to be.
Life doesn’t come with a nicely-bound operating manual. Which is primarily why the problem with change is how change disrupts your comfort zone. Transitions prompt a realignment of expectations, emotions and personal finances. This is true whether your life change causes you to celebrate – like a new job, new client, new relationship, marriage, birth/adoption – or it’s something that causes you to mourn – like death, divorce, lost client, lost friendship, failed business.
I’m excited for the big-picture conversation we’ll have next week about how to manage your money as your life evolves and flows from stage to stage. Likewise, I’m looking forward to sharing with you practical resources aimed at helping you move into your next phase with as much grace and ease as possible.
I want for you what I desire for myself: to feel more sure-footed, confident and clear-headed, and to be more at peace with the unknown.
Even if you’re not in the midst of a major life change, I invite you to join us…you’ll learn how to survive and thrive the next one when it comes.