When you reach adulthood, you automatically get a new life partner. Tall, dark, and handsome? Or, tall, blonde, and beautiful? Keep dreaming, you won’t meet this one on Tinder. This alter ego determines where you work, your standard of living, and what you can buy. Basically, it runs your life. It hides behind your couch, if it allows you to have one, and can edge you out of your bed. This friend shows up uninvited to cramp your style in countless ways.
Meet your credit score, your ethereal mate. Just about every area of your life is impacted by this relationship. And talk about being pushed around. You can get much more flexibility out of a human.
I like reading the latest financial tips as much as the next person, but sometimes it’s redundant. I know how to budget, save, and spend responsibly. I don’t need a daily article telling me to do all those things, I can write a book on that. (Oh wait, I did – How Ally Found Her Financial Freedom.) Anyways, instead of dwelling on the next money crisis or offering another seven-point list on how to side-hustle, let’s celebrate some financial success.
Yes, things are tough when you’re young because, like most, you may have started with zero, or negative zero, if you had student loans. After some time goes by, the small actions count. Little by little, the emergency fund gets funded, the necessities are bought, then the pleasures can follow. One day, going to work may not feel so bad and your life won’t depend on your next paycheck. It’s when you realize that you have money left over from your last paycheck. You get a few raises and promotions and there’s finally more money than month with a small checking account buildup. The money gods have smiled on you and you can start moving on to bigger and better. This is what’s known as financial satisfaction.
If you were to sit down with a financial planner, you might expect to state your goals and come away with directions for allocating your money. You might expect to be sold a life insurance policy or have your money transferred to accounts that are under the control of the advisor.
A CFP® follows specific steps to align the client with a sound financial plan. These steps involve establishing a relationship, gathering data, analyzing the current financial status, developing a recommendation, implementing the suggestions, and monitoring the plan.
A comprehensive evaluation of your financial status should integrate your underlying money motives and help you understand how you are managing yourself and your money. This is critical knowledge because you are the only person that will take the necessary actions.
Dr. Brad Klontz is my hero on this topic. Dr. Klontz combines behavioral finance and financial psychology into standard financial planning procedures. He’s the Dr. Phil of finances. If you need help getting real with your finances, Dr. Klontz has your remedy. In case you haven’t made the connection between your behavior and your financial status, read below where I’ll translate Dr. Klontz’s recommendations for conducting client meetings into self-evaluative introspection and actions. If you understand your motives and harness that energy, you will be better empowered to make smarter financial decisions.
I would like to weigh in on a hot topic. My friend at Budgets Are Sexy posted an article on why we buy stuff. J. Money’s piece emphasizes that buying makes us feel good. Clearly true. However, there are more reasons to explain why we possess compulsive spending habits.
The Sophistication of Marketing
I just read in Investor’s Business Daily that 7% of adults think that chocolate milk comes from brown cows. 7% is a small percentage of the population, but it’s hard to conceive that anyone believes that. With that level of gullibility, no wonder marketers have brainwashed us into giving up our paychecks to endlessly buy things.
One of my favorite books is Born To Buy by Juliet Schor. It not only reports on the sophistication of marketing but chronicles the stealth methods used to convert children into lifelong buying robots. Given that the book was printed in 2004, and the author’s study subjects are adult age by now, most millennials have already been transformed into consumer zombies.
If my head were to split open, blobs of financial material would spill out. The latest stock prices of Amazon, Veeva, Comcast/how much I plan to save this month/the order that my bills need to be paid to meet my savings plan/ Trump’s tax proposal and his idea of tax rates that are going to enhance working lives/what sector of the stock market is on the verge of growth/how much I plan to spend this month. Small splashes of yoga poses that I plan on attempting might be in the brain matter, but at a minimal level. I gave up on twisting myself into a helix years ago. What I’m getting at is the majority of my mind is focused on financial elements. I realized that most people don’t have a grip on this topic and I had an idea to put it into a book.
In How Ally Found Her Financial Freedom, I take the reader through common financial problems – no idea how to manage money, accumulating debt, little knowledge of financial instruments. Ally is a working professional with no money management skills. She’s deep in debt and wonders why she impulsively spends money. Ally acknowledges that she doesn’t have all the answers and finds a mentor. Cue Victoria, a family friend that Ally feels has the accomplishments and successes that Ally longs for. Victoria commits to her mentor role, providing sound advice and guidance. Ally is compelled to examine how she thinks about money, especially her personal money script. She’s challenged to think about money every day and remain disciplined. Ally takes bite-size actions, baby steps to pursue financial contentment.
If I wanted to, I could fill this blog with posts of all the basic financial gems like budgeting templates, savings calculators, and mortgage interest rates. Because there’s no shortage of said material, I’d like to talk about one of my favorite sites: Feed The Pig .
Feed The Pig is a National Public Service Campaign sponsored by the American Institute of CPAs and the Advertising Council. The site’s mascot is not the most attractive pig I’ve seen, but stay with me. His head is a piggy bank and that’s where the parallel message lies.
The presentation is meant to appeal to young people, or those that we’ve affectionately labeled the Millennials. Us Baby Boomers would be remiss in our obligation to society if we failed to engage this genre. According to SoFi (www.sofi.com), 39 percent of Millennials would rather disclose a preexisting sexually transmitted disease to a potential partner than reveal how much debt they have.