The dictionary defines morbidity as the “relative incidence of disease,” and in the insurance field, it’s associated with the chances of someone becoming disabled. The idea of financial morbidity is aimed clearly at those who possess an inability to deal with their financial lives to a degree that their long-term financial security is put in jeopardy.
Do some or most of the following behaviors sound familiar? If so, you might be in or near a state of financial morbidity:
- You have no real idea where your money goes.
- You choose the default option in your retirement plan because you don’t want to be bothered or have limited understanding.
- You haven’t reviewed your insurance policies in the last 3 years.
- You either have no Will/estate documents, or they’re so dated that they might be invalid.
- You normally pay interest and penalties on your tax returns.
- Attempting to win the lottery consumes more time and resources than is prudent.
- You rarely talk about money with your partner.
- Financial decision-making is stressful and ends in either shutting down or an argument.
- You do not work with financial advisors (the kind who aren’t selling you a product).
If these behaviors feel too close to home, you are likely suffering from dis-ease in your money life. You are not doomed to live the rest of your life this way, however. You can change the outcomes if you have enough desire and conviction and take real action.
Following are 4 steps to lead you from a life of financial morbidity to one of financial health and vitality:
- Ask yourself what the likely outcome will be if nothing changes. In other words, what will happen if you continue to pilot your financial life by accident, default and luck rather than taking the responsibility of control?
Take the above behavior statements and turn them into questions. For example: “If I continue to have no real idea where my money goes, the likely outcome is ____________.”
Now complete the other 8 statements by creating the same question.
- Imagine a financial future where you feel secure and in control. What does it look like? Are you happy? Strong? Confident?
- Compare your answers from the first step to the second. In other words, compare your current beliefs with your idea of a secure financial life.
- Finally, pick one area and begin to focus on the change. Maybe your first step should be to find a fee-only financial advisor who works for you and not a product. Or maybe your first step is to begin to talk openly and safely with the other stakeholders in order to create a game plan together.
The fact is, your lack of financial comfort is mostly due to how money was treated and discussed or not in your childhood years. In other words, if your parents talked about savings, using debt wisely and financial responsibility, chances are you are on board. But if money wasn’t talked about in these open and positive terms, then your relationship with money was malformed, leading the way to your current financial morbidity.
It’s not too late to learn and gain understanding—and thereby control—of your financial decisions and improve your financial well-being. There is no magic pill to swallow to gain financial health; rather, it is a process of small steps that requires proper care and treatment. You can turn your dis-ease into comfort and security by making small, appropriate shifts in your thinking and your actions. You just have to get started and keep plugging away. I know you can do it!