We generally believe that other people are more on track, in better shape than we are financially. We’re convinced, especially if they put on a good show, that they know more than we do. We keep up our own good appearances, and hope no one brings up the subject.
Mary, a client of mine in her mid-thirties, managed a $1.5 million budget at work. She consistently received bonuses, promotions, and pay increases for doing such a brilliant job.
At home, she hadn’t balanced her checkbook in a year. Each month, she was spending $1,500 more than she made. She practiced “retail therapy”—if she had a bad day, she compensated by buying new clothes or going out for an expensive dinner. Emotion drove her personal spending habits. At work, on the other hand, she based her decisions on responsible and rational thinking.
Mary hadn’t told anybody about her personal financial situation until she finally gathered the courage to see me. Together, we started to address her money problems. She faced the fact that if she didn’t do something about them, her financial future would remain forever unstable.
Mary had to overcome a great deal of embarrassment to call me. She thought she was too old to be having these kinds of problems—that it would be an admission of ignorance to talk to someone. But together we reduced her stress, and she began to turn her financial ship in the right direction.
We listed everything she spent, determined her top financial goals and how much it would cost to reach them. She changed her spending habits, paid off debt and even started an investment portfolio. By talking about her situation, she was able to get over her embarrassment and hopelessness. Only then could she get the coaching she needed to change how she operated with her personal finances.
Another client, Lisa, is a teacher. She belongs to the Washington State Teachers’ Retirement System, which offers members nearly thirty different options for retirement tax shelters. It is overwhelming. Lisa knew she should be saving more for retirement, but she didn’t know where to start. She didn’t know how to evaluate an investment, and was afraid she’d buy into a bad one, so every year she ignored the enrollment date.
She waited until she was forty-nine years old to call me. By not talking to anyone sooner, and therefore not contributing to her retirement plan, her financial assets had lost years of appreciation. I evaluated the options for her and she finally decided to act. She was regretful she had not done anything earlier, but had been too embarrassed to take the first step and ask anyone about it.
If you are concerned that your finances are not heading in the right direction, it may be time to seek out a professional. If you work for a company that has a benefits department, talk to them about your retirement options. Tell them you need help and ask them to work with you until you do understand. In my experience, any time you start a conversation like that, people will be more than willing to assist you.
A Certified Financial Planner™ professional is another resource for advice. Ask friends, coworkers, or your human resource department to give you a referral.
Find a professional who is willing to listen to you and who takes the time to understand your concerns, fears, and goals. You want someone who can help you establish a personal spending plan, a set of financial goals, and an investment and retirement plan that you are comfortable with.
Find someone you can trust and start talking about money. As with anything that is challenging, talking and learning about it will help reduce stress and get you started on the right track.