When the average person sits down to talk to the average financial planner the last thing that comes to mind is a conversation about emotions. If you’re like most people you expect to talk about assets, liabilities, and a magic number you need to reach before retirement, whenever that may be.
When you sit down as a new client with Chris Blair of Maestro Associates, you don't talk about any of that. Instead, the goal of the first conversation is to establish whether or not you have a healthy relationship with money. To get those answers Chris asks a much more intimate set of questions, like:
• How do you feel about your current income and expenses? Are you anxious or confident when you look at your bills, your bank balances, or your savings?
• How did you grow up? Could you have whatever you wanted, or were you scolded every time you left a light on?
• What is your money script? Do you think negatively or positively about your relationship with money?
The goal of these highly personal and very untraditional questions is to sort out where you’ve come from before thinking about where your money should take you.
“It’s like the doctor’s office,” says Chris, “people feel uncomfortable at first. They don’t want to openly share their vulnerabilities or their history. So job one is for me to become less of a stranger. And job two is to figure out how they feel about their finances. That’s very different from just sorting out an assessment of their current financial situation.”
Every person is different, but Chris shared a few of the more common emotional characteristics that most people have around money. See if any of these fit you. You may be a hybrid–and you may change over time, but odds are good you are one of these. Keep in mind, there's no judgment here. Knowing your relationship with money is step one if you want to focus on doing more with it.
Spenders - You qualify as a spender if you spend more than you make. Or if you don’t set aside an appropriate percentage of your monthly income for savings. If that sounds a bit like you, it’s important to start thinking about a balance of ways to cut unnecessary costs and increase income. And by the way, you're far from alone. There are lots of spenders out there who have no shortage of income. Pro athletes, rock stars, and doctors are famous for this.
Misers - Do you carry a day-to-day fear of not having enough money? Even if you have a good job and a solid career, is it hard for you to feel confident about your future? Is it hard for you to vacation or enjoy spending because you feel a stronger urge to be frugal? It’s important to talk to these people about how spending money is sometimes necessary to bring joy and fulfillment.
Money Seekers - Will you, or someone you know, do whatever, whenever, to make more money. Do your ears perk up when someone offers a can’t lose stock tip or investing opportunity? Do you find yourself riding a roller coaster of success and disappointment? For these folks it’s important to visualize the success in a balance of short- and long-term gains.
Money Haters - Do you ever feel like the financial system is rigged against you? Or that there is money out there, but no matter what you do or don't do, you can’t seem to get your fair share of it. Most importantly, do you feel you’ll never be able to change your financial situation? It’s important to unravel the negative experiences around money that create this mistrust. Then find ways to demonstrate that over time, sound investments have a track record of successful performance.
No matter your relationship with money, here are three key and measurable outcomes, beyond a balance sheet that Chris wants for every client:
Become happier. Because having a good relationship with money and the confidence that you are doing the right things is the very best way to eliminate stress and anxiety around finances.
Have clarity about your present and future. If you have clarity about your goals, you will be more motivated to pursue your hopes and dreams in a reasonable and realistic way. When you are on track to a goal the journey feels rewarding.
Feel secure in your decisions. When you feel safe and secure, everything in your life feels better. When you have a plan, you don’t have to fear the unknown or worry about bumps in the road. The key is a plan that can change as life does.
“As an advisor you can’t coach every client the same way”, says Chris, “when I help people better understand their relationship with money, it’s an eye-opening experience.”
So, ask yourself, do you understand your relationship with money? Is it healthy? And do you have the kind of plan that speaks to your emotional and financial needs right now, as well as into the future?