Age has taught me that striving for improvement is admirable yet there comes a time when you have to accept your limitations and make them work in your favor, not against you.
Money is one of those areas in life that people struggle with, for a whole host of reasons. I know, because I have these conversations with people all the time. It goes like this:
“I just don’t understand personal finance. It confuses me. I guess I’m not good at math. Maybe I’m not smart enough. Besides, when I focus on my accounts, it stresses me out.”
The result of such negative self-talk? They convince themselves that to do nothing is preferable to botching their finances.
Or there is the free spirit who fears having clipped wings if they take charge. Their argument goes something like this:
“You only live once, and I could die tomorrow. I’m having fun and the rest will take care of itself. I’ll work until I die, and that’s okay.”
Is it? A debilitating illness or injury might eradicate those plans, leaving your family in harm’s way.
Then there is the uber responsible person, who might just die from worry.
“I know I have more money than I thought I would have, but I still feel like I have to watch every penny I spend. The more money I have, the greater the responsibility, the more at stake and the more uncomfortable I get.”
It is a good problem to have, but if money doesn’t deliver the ultimate: freedom to live life without undue worry, then what is the point?
Sometimes my role as adviser feels more like the money whisperer. Teaching people to get out of their own way leads them to self-acceptance. Namely, there is no shame in lacking understanding/confidence. You’re not a lazy spend-thrift if you want to enjoy money, nor are you a tightwad for holding on to money with two hands. Your nature is your nature.
The good news is changing your nature isn’t required for financial success. Working your advantages is much easier than forcing yourself to overcome your weaknesses. Here’s how it’s done.
Worried but hiding out – Your strength is the ability to disconnect. That means when the market is volatile, you don’t waste precious energy fretting about what you can’t control.
A simple, low-cost plan with an advisor you trust enables you to simply follow what is set out before you. Automation – of bill paying, investing, etc., comforts you, allowing you to go on and live your life. There’s relief in knowing that your spending and saving/investing is in healthy proportion. Annual monitoring ensures that you stay on track and/or make adjustments as your situation changes.
Footloose and fancy-free – Your optimism is an asset, as is your ability to enjoy life.
An inventory of all the free things in life that bring you joy can help you spend less and enjoy more and more frequently – without the nagging feeling (or nagging partner) that perhaps you should dial back on spending. A hard look at what you value most – whether that is time with family, hobbies, socializing, etc., will enable you to prioritize spending on things that give you the greatest joy.
A “reverse” budget feels less constraining than tracking your spending. Instead, after all bills are paid, and savings/investing is sent off automatically, you are free to spend what is left over. This motivates you to eliminate “wasted” spending so you can spend more on what truly lights you up. If you choose to work with a financial advisor, they can help monitor and track your plan so you can make adjustments before a problem arises.
Tight and tortured – Your serious and responsible nature ensures that you will control any controllable variable for the protection of your family.
While others might cringe at the thought of making a budget – you might enjoy the exercise for several reasons. First, your unease with money is a desire to control the unknown. Taking inventory of what you spend and how you spend gives you the ultimate control over spending only on what matters to you and allows you the joy of eliminating waste.
As you start to see the surplus you have every month, it makes it easier to create a line item for enjoyable spending, which eliminates any guilt about “spending too much.” As far as investments go, it might make sense to invest more conservatively if volatility in the markets keeps you awake at night. A good advisor will craft a plan that shows what average return you need to achieve your long-term goals and can also help you understand how to weigh an investment by looking at its potential reward versus its potential risks.
So never mind the apologies about your shortcomings – we all have them. For every con is a pro. Make your nature work for you, instead of against you. It will make it much easier, and less stressful to reach your financial goals.