I have seen a lot in my 22 years as a financial planner, you’d be surprised. For example:
- I always close my door so clients have privacy but the other people in my office have to close their doors as well because the people in my office are laughing so loud.
- These same office mates ask, “Do all of your clients hug you?” (Pretty much, but it’s not a requirement.)
- I always have two things in my office: chocolate and tissues.
- People tell me their life story, and I’m humbled and honored that they feel safe doing so.
What I’ve come to realize most in my financial journey and in guiding others on their financial journey is this:
People are really weird about money.
So, instead of trying to avoid thinking about this weirdness, I dive right in and swim in that weird pond. But I have learned a few things while swimming there and I’m happy to share them with you.
- This is your life. When making any decision – but especially one involving money – ask yourself, “Who is in my head right now?” It may be a parent, your in-laws, your sister, your child’s friend’s parents, a friend, or someone you saw on tv. It’s a lot easier to make the right decision for you when you are the one making it, free from influence from others, even well-meaning others.
2. Do something. Reading about personal finance can be a very clever way of procrastinating. Reading a blog, even my blog, seems like you’re doing research. Be honest with yourself. I know nothing I write is groundbreaking and so do you.
You know what to do about the basic financial stuff, you just don’t want to do it.
3. Regarding #2, ask yourself “Why?” This is where I like to spend a lot of time with clients, determining the “why” and getting an answer so we can get to work. You have a good reason for procrastinating, but let’s acknowledge it so it won’t hold you back any longer.
Hiring a professional therapist could be a very good investment. In fact, sometimes a psychologist/psychotherapist/mental health counselor and I collaborate to help the client get unstuck and start moving forward. Explore What’s Next is a regular go-to for me and my clients but it’s most important to find someone who gets you, and you may have to interview many professionals, so be prepared for that.
Rules 4-8 you already know but have yet to master (see #3): 4. budget, 5. save, 6. insure, 7. invest, 8. share, so here’s how to do that.
4. Budget: If you are in Western New York, come to the “I HATE Budgeting (But I Like Having Money)” support group meetings. You’ll realize (a) You’re not alone (b) It is hard but (c) you can totally do this.
Do you want to know why you don’t like to budget? Because it makes you look either cheap or that you don’t have enough money to do everything you want and you don’t want people to judge you. You know what? People are going to judge you no matter what, so you might as well take care of yourself.
4.5 Enjoy! You can’t save everything and you can’t spend everything. Create a budget that works for you and be sure to build in a line item for pure enjoyment, which needn’t be a lot of money. But, once you include a line item and make sure you’re spending money for enjoyment, you’ll find that budgeting gets a whole lot easier and sustainable. Most of all, it helps you develop laser-like focus on what you most enjoy that deserves your hard-earned money.
Have no tolerance for mediocre recipients of your resources; for example, I invest in high quality chocolate regularly. And while eating at a restaurant in Ellicottville, I spied this little cutie who hung out for pretty much the entire meal, just chillin’ and occasion
ally climbing up the tree to get a better look at us. I honestly can’t remember what I ordered.
5. Save: Along with budgeting, saving is so – how can I say? – not fun. That’s until you can pay for something without any strings or interest charges attached. That’s freedom my friend, and freedom feels awesome. Budgeting will support saving and vice versa.
If you’re working on a vision board, consider coupling that with a vision bank account and make a commitment to putting money into it. Get super creative to find ways to put more and more into your savings until you feel you’ve reached your “happy number.”
I tell my clients that they should have about five months worth of living expenses set aside just in case (the car breaks down, a job loss, an illness etc.). Once this “financial stress reduction account” is funded, set your sights on other goals such as buying a car, taking a big vacation, buying a home, sending your kids to college or retiring.
6. Insure: Protect & take care of yourself and your stuff.
You: Move your body. Watch funny movies. Eat real food that you cook or someone you love cooks for you. Avoid mean people. Don’t read the comments on any online article. Spend time in nature. Have the right type and amount of health, disability, life and maybe long-term care insurance.
Your stuff: Home/renters, automobile, liability insurance.
I know, people really don’t like talking about insurance. In fact, most of my clients, when asked what they think about insurance, say it’s “a necessary evil.” Evil, that’s the word people use to describe a financial strategy to protect them. That’s terrible. But you know why? Because insurance can be confusing and we’re never sure we’re making the right choice. Making a decision about something you’d rather not make a decision about creates stress. Seek a licensed, experienced, and thorough agent (here is my friend Marcia Brogan’s website, and Jason Pappas of Queen City Risk Management, both are super nice). I’m a huge fan of nice.
Remember, the less stuff you have, the less insurance you need! Hire a professional organizer like Home Solutions of WNY, Organize Your Life, or a good (but firm) friend if you need help ditching stuff. What’s the absolute worst that can happen? You need that exact item the day after you’ve tossed/donated/sold it? Go back and buy it for $2 and then donate it again. Or borrow it from someone. Have people forgotten how to borrow things?
7. Invest: Not until 1-6 are checked off of your list. That’s the rule.
Do you want to know why that’s a rule? Because investments can and do lose value and you simply cannot rely on them to take the place of an effective budget, adequate savings, or insurance. That’s not their job. Growing in value over time is their job. They provide a lesson in patience; you know, that virtue you keep asking for help developing?
Learn about investing and investments, the risks and rewards, the philosophies and strategies. You can do this. Bear in mind that everything in life has risk; I once had a client who didn’t want to invest her money in the stock market and didn’t trust banks. She kept her cash in a basket on her mantle. She lived in the country. Mice made a home and warm winter bedding out of $3000.
8. Share: I’m an advocate for tithing (giving a tenth – typically to your church but I apply it 
to all non-profits or simply to people in need). The signature benefit of sharing your resources is that it makes you feel good, and you won’t worry about money when you’re giving it away and feeling good. Sharing takes the focus off of what you lack and puts focus on what you have. Truth is, you have the power to change someone’s life for the better. This is one of the most important steps, in my opinion.
Spend a lot of time on 1-3, then 4-8 come to you so much easier. Self-awareness is probably most significant personal finance tool you have.
Peace & abundance,
Amy Jo
LIFE: Live Inspired, Financially Empowered 