“How can I be at this stage of my life and still not have a handle on my money?”
If you’re privately embarrassed about your finances, you’re not alone. Many successful people have struggled with their money at some point.
People get in a financial jam because:
- They procrastinate dealing with the issue, waiting until they know – or earn – more.
- They don’t make it a priority. By some miracle they think their money will take care of itself. This is especially true if they don’t have the time, talent or inclination.
- They get overwhelmed about where or how to start.
“Procrastination is like credit. It’s fun until you get the bill.” ~ Christopher Parker
I’ve learned from both personal and professional experience what it takes to face financial fears. Here are my five tips.
1. Don’t Be So Hard on Yourself
It can be hard to ask for help. When it comes to money, this difficulty is multiplied.
Shame about the state of your finances can keep you from seeking help or talking about it at all, even with your spouse, close friends or family. Which wouldn’t be a problem, except that shame can instigate a downward financial spiral that is real: no savings, no emergency fund, no retirement plan, loads of debt with no plan to get out. Living paycheck-to-paycheck.
I encourage you to ease up and not be so hard on yourself. It’s just not helpful.
2. Accept You’re Not a Financial Expert
No one is born with a natural ability or knowledge about how to invest, manage debt, choose insurance or how to budget. These are entirely learned skills.
The clients I work with are universally smart, successful, talented people. Because of this, when it comes to their finances, some feel like they should inherently, naturally know better. They’ve simply put off dealing with their money issues, waiting for some point in the future when it’ll all somehow magically come together for them.
Except it doesn’t.
We don’t arrive on this earth with financial skills intact. Whether you’ve got a confusing collection of financial products you’re not sure about or you’re just starting out and don’t know where to begin, out-of-control money issues can eat your peace and happiness for lunch.
How do I know? Because it’s my own story!
3. Stop Blaming Your Parents
If your parents didn’t teach you solid money-management skills, there’s a good chance you’ve never learned. Having financially-savvy parents is no guarantee you’ll have learned the lessons either. But don’t blame your parents: they were probably doing the best they could with the tools they had at the time.
Call it a case of “the cobbler’s kids with no shoes:” My father was a Financial Planner, yet neither my sisters nor I received a financial education. My father was smart, loving and generous; he was also from a different era. He thought that as a woman I wouldn’t have to worry about money. He assumed I would marry a successful man who would take care of me. That’s how it worked for my parents and that’s how my father expected it would work for me.
Needless to say, his approach wasn’t very helpful in a world where women run businesses and governments and certainly their own financial lives.
I went on to become a Chartered Accountant. I also went on to collect a naive spending habit, an anxiety-inducing amount of debt and more than one failed investment choice.
In my mid-thirties, I’d finally had it. I wanted more for myself. I did not want to live with financial stress or fear for one more minute. I was done procrastinating and done blaming my parents. They did what they thought was best at the time. Not ideal. But, I couldn’t change that now. So, I decided to change my mindset and turn things around.
4. Ask For Help
I knew I didn’t have the knowledge, but I knew someone who did: my dad. (Knowledge is relative, and sometimes knowledge comes from a relative.)
My dad helped me understand that we’re experts in a whole bunch of areas of our lives, but not necessarily all of them. I learned that you don’t need to be an expert in financial planning. You just have to find someone with financial expertise who appreciates where you’re at: someone who will work with and for you.
Becoming proficient with money didn’t happen over night. It started with the basics like setting priorities and tracking where my money went. It also required me to shift my thinking from “I can’t do this” to “I’m learning.” It’s amazing how life unfolds. About 10 years after starting my journey to learn more about money and investing I joined my father in his financial planning business. Today I use my ever increasing knowledge to help others turn their financial ship around.
5. Make It A Priority
Your finances are like anything else in your life: if you want something to change, you have to change something! Unless you make the time to educate yourself and practice managing your money, you can count on more of the same.
You practice the things you want to get better at, and because you want to get better, you make it a priority.
If you play golf you know the only way not to be driven crazy by the game and really enjoy it, is to be moderately good at it. The only way to get moderately good at it is to play. A lot. And by “play,” of course, I mean practice. When you commit to this practice you make it a priority. You also sacrifice other things so you can play (and get better). With time, the “practice” becomes more fun than work so that it’s easier to make it a priority too.
Money is the same. The more you “play” at planning, paying attention to your finances and investing, the easier it becomes and the better you get. The better you get, the more confident you are and the more fun you can have. A financial advisor is like a swing coach is to a golfer: you hire both to up your game and improve your overall score.
“The problems we face cannot be solved at the same level of thinking we were at when we created them.” ~ Einstein
How to Get Started
The first time you put a financial plan together can be overwhelming. There are so many moving parts. Trying to wrap your arms around all of it at once can cause a kind of paralysis. It’s all important! Where do you start?
You start by focussing on one thing at a time – and winning there. Pay off your credit card debt. Put a small amount away for an emergency fund each month; put a bit away for the future.
A series of small wins will raise your sense of control and confidence. Soon, like practicing your golf swing, managing your money becomes a habit. Something you just do. It even becomes something you look forward to, something that’s fun! How? Because – like golf – you’ve practiced enough to become half-way good at it.
When you can’t take the money anxiety in your life anymore and finally get outside advice or education to help solve the problem – when you embrace the reality that financial know-how will not just find its way to you on its own – everything improves. You get out of debt, save money, invest and have confidence in the future. There is less tension in your relationships, you can make purchases and take vacations that don’t financially stress you out and ultimately you feel better about yourself overall: The shame is gone.
So be brave. You can face financial fears and learn to manage money better. I promise your future self will thank you.
“Everything you want is on the other side of fear.” ~ Jack Canfield