Holidays bring our mind to attention. Many families strive for perfection when it comes to the holidays they value and celebrate – in every aspect. Whether it’s home décor, purchasing gifts, or cooking special meals; time, care, and great efforts are put forth to make this time successful and meaningful.
For far too many, the same effort does not apply to their money lives. Maybe it’s a result of the intimidating scope of the knowledge, time, or attention that stalls the conversation and concomitant action necessary. But I can state with confidence that your financial security is, and should be, important to you and your family.
Many people use New Year’s resolutions as the starting point to get their financial life in order. But, as we’ve seen year after year, resolutions get pushed aside as life takes over and the complexity of making sound decisions grows.
You have the intention, but not the attention.
Here is a plan you can follow to move your intention and attention closer together. If you are partnered, do this together, but steer clear of letting the exercise devolve into arguments or a battle of ego or power.
1. Begin with a blank page. I recommend you put pen to paper rather than using a computer.
2. Draw two vertical lines from top to bottom, creating three equal spaces.
3. On the left side, on top, write: High Confidence
4. In the middle column, write: Moderate Confidence
5. On the right side, write: Low/No Confidence
6. On a separate piece of paper, list all the aspects of your financial life. For example: Cash flow and budgeting, Debt, Risk Management, Investments, College Planning, Retirement, Social Security and Medicare, Estate Planning, Taxes, Emergency Fund and Liquidity, Future Forecasting, etc.
7. Now drop each item into the appropriate categories of confidence. A note: Understand that it’s difficult to be objective about your knowledge and experience. Err on the side of caution and don’t overestimate your abilities.
For some reason, people (men especially) tend to feel regret if they are not financially knowledgeable, as if merely being a man was the sole reason for carrying the responsibility of being a master in the financial industry. If you struggle with that idea, consider approaching the end of your income-producing years without adequate reserves or making mistakes that have grievous financial outcomes. Your ego is less important than your financial security-every time!
While it may cause stress, you must turn your attention to the areas where you have less confidence. What are you going to do to gain more confidence in these categories? If you went to your Internist and s/he told you that you had a rare or problematic disease, you’d find the best doctor to help you.
Why shouldn’t your financial life be held to the same standards?
Hiring an expert to help educate and guide you is a perfect gift to give yourself and your family. Finding the right one can be a bit trickier. Here are few guidelines to consider when choosing someone to help.
1. Experience. How long have they been practicing and are they licensed with clearly recognizable credentials? This is a tricky one. There are so many designations out there that all seem reputable, but might not be what you need. Your advisor should be, at the very least, a Certified Financial Planner professional.
2. Conflicts of Interest. Make sure that your advisor works FOR YOU and not for some organization that is compensated by the products you buy. Research whether there have been legal actions or complaints against the planner or their company. If an advisor is receiving commission for product sales (in full or part) then there is literally no way they can act in your best interest.
3. Communication is Key. First, if you meet a financial representative/planner/advisor who talks more than they listen, do yourself a favor and run. You want someone who listens and demonstrates that they understand who you are and what you value, and most importantly, that they care. You can tell by the quality of questions you are being asked and whether you feel heard.
You also want to make sure that your questions are welcomed, encouraged, and answered to your satisfaction. Avoid those who rely on jargon and other prosaic terms to convey information.
You and your financial advisor can work together to bring attention to your intention and move your confidence from less to more.
As you gear up for holidays and the focus and love you bring to making the experience memorable and special, think of how you can bring that holiday effort into your money life. Don’t wait for “next year”, there’s no time like right now.
