I was recently hired by a couple who originally met with me almost four years ago. The husband’s reason, “I wasn’t ready.”
Another couple is hiring me after about two years and only on a limited basis because, “We’re never going to fill out all of that information. We’re just…not,” (I ask for a lot of information so I can look at your financial life holistically).
A woman is committing to working with me after “only” a year of originally meeting with me.
You may wonder if I simply have terrible closing skills and for many years I did, too. Since being in private practice for nearly six of my twenty-three years in the business, I’ve learned that people just have to be ready.
There is a LOT of information available to help you improve your finances, mostly free (because marketing coaches tell all of us to get people to sign up for our free newsletters and blogs to attract potential clients). The problem is determining if it’s applicable to you and your unique situation and if you’re ready to tackle this aspect of your life. Not knowing (a) if it’s true or (b) if it’s applicable, most people simply procrastinate. (And you thought it was just you!)
Deciding to tackle something as big as your finances is a huge step and if you’re not ready, don’t waste your time (or money) going through the motions.
Most of my industry (and most profit driven industries) NEED you to ACT RIGHT NOW so that they can make money RIGHT NOW. This rush-rush-do-do attitude should be a red flag for anyone in the midst of making important financial decisions. I say thumb your nose at the whole thing and take your time developing clarity on your goals, priorities, values and motivations while also thinking about any obstacles (real or imagined) that may be standing in your way.
The financial planning process uses the following six-step model:
1. Establish the relationship, identify goals, needs, objectives
2. Gather data
3. Analyze data
4. Develop & present recommendations
5. Implement recommendations
6. Monitor results
Anyone jumping from the front edge of step 1 to steps 4 or 5 is selling something, not providing professional advice. Would you trust a doctor who prescribed something after only hearing about one aspect of your health? No, of course not, and this is the same reason why some of you haven’t “done” much with your finances.
I read an excellent article in the Journal of Financial Planning, “Motivating and Helping the Overspending Client: A Stages-of-Change Model.” The authors (a PhD, Ed. D, and CFP R professional) suggest the following five-step phase identifier (originally developed by James Prouchaska, Carlo DiClemente and their colleagues) to determine readiness to change (spending, quitting smoking, weight loss etc.):
1. Denial: People in this phase typically deny any problems and/or blame others.
2. Ambivalence: From the article, “Ambivalent clients need to have someone acknowledge both sides of the argument in their head and heart.”
3. Preparation: You’re ready to do something
4. Action: You are doing something!
5. Maintenance: Keep doing that!
Then, in the event the client struggles with some old behaviors:
6. Relapse “Do you need new skills, or more strategizing about how to stay on track?”
Two critical questions the authors suggest asking are:
1. How important is it?
2. How confident are you …that you could do it? I would add, how confident are you that your advisor can and will help you?
The answers to these questions can indicate whether or not you are ready to tackle your finances.
Changing behavior is enormously difficult, but it’s easier and more possible when you identify what Tracy Brinkman from Your Success At Last calls your unique DNA:
Knowing what drives or motivates you to make a change in your life as well as what you need and how you can best be rewarded increases the likelihood that you will follow through. If any of the components are missing, you’re less likely to be successful.
As you view the image below, you can see at the core of our financial picture is our beliefs, values, behaviors and emotions. These include the belief that stocks perform positively over the long-term and in things like karma and the golden rule.
Outside of us are all of the things we do with money: earn, save, protect, invest, spend and give/share.
In the italics are all of the influences that affect our financial decisions: relationships being the most significant but also our health, the environment we live in (physical, emotional, mental), our careers, our spirituality (however that is defined) and the community in which we live.
Financial shortcomings typically result in feelings of shame and in defensive or secretive behaviors which can cause further damage both to self-esteem and to relationships. We all can do better when we both know better and are fully supported to make the changes and choices that are best for us and our family. If you are ready to start taking some steps toward your financial well-being, I invite you to contact me to schedule your complimentary initial consultation. Plus, I always have chocolate in my office.