- The way you feel about money has a huge affect on how you manage it
- Your money attitudes are shaped by your family, friends, and culture
- Smart financial planning includes working on your money attitudes
- A great financial planner understands your habits and beliefs about money
Have you ever spent money on something you knew was stupid, silly, or ill-advised? Have you ever known what you “should” do with your money, and then not done it? Do you procrastinate about important financial decisions, afraid you’ll make the wrong move?
And then beat yourself up about it?
Here are two pieces of good news. You’re normal. And these are issues that can be solved.
We all have beliefs about money. Many of those beliefs were formed when we were young, maybe before we even knew what money really was. Sometimes those beliefs get in the way of our financial peace of mind.
Here’s how to reframe your thinking about money and work with a financial planner to achieve healthier finances.
Where Our Beliefs Come From
Many of the attitudes we’ve internalized come from our childhood. Even when we don’t realize it, things our parents said and things we saw them do shaped our attitudes about life in general and our financial lives in particular.
That process has been described like this: Until puberty, we’re little tape recorders, absorbing everything around us. About the time we hit puberty, we stop recording and hit the play button.
Culture and religion play a role, too, teaching us additional lessons about earning, spending, saving, and giving. Everything from “the stock market is a gamble” to “donate a percentage of your income to those less fortunate” are lessons we absorbed. As adults we may not even realize where those beliefs came from.
If those beliefs help us make the financial decisions that are best for us, great. But all too often they may get in the way.
If our parents didn’t understand investing and told us that the stock market is dangerous and uncertain, we might choose “safe” investments that leave us far short of our financial goals. If we absorbed the lesson that we should live for today and not worry about tomorrow, we might one day find ourselves with a mountain of credit card debt and no savings.
A good financial planner is one way to correct some of those early messages and begin internalizing new ones.
Taking The First Financial Step
Getting started isn’t always easy. Do we want to work with a financial planner and tell a stranger all of our shameful financial secrets? Are we going to be judged? Or will we be compared to others who appear to be doing better financially?
The reality is that it doesn’t matter how well others are doing. What matters is how we’re doing and what progress we’re making. And when it comes to feeling ashamed or anxious, financial planners have heard it all. A good financial planner won’t judge you for where you are, but help you get where you need to be.
Working With A Financial Planner
Think of a financial planner as someone who can help you navigate your financial beliefs and needs to achieve financial wellness, like this:
Chances are, your path to financial health involves several major questions. Should you invest more or pay down your mortgage? Should you save more for retirement or for your child’s dream college? The right answers aren’t about how well a given investment performs. The answers that are best for you, and only you, need to include your attitudes towards debt, your feelings about risk, and the value you place on your financial goals. How important is it to you to be debt-free? To own a home? To pay for your child’s education?
There’s no single right answer, only the answer that’s right for you.
What Kind Of A Financial Planner To Choose
Although there are many types of financial planners, the gold standard is a CERTIFIED FINANCIAL PLANNER™, also known as a CFP® professional. CFP® professionals undergo a rigorous education that includes everything that touches your life financially, from investments and planning to taxes, insurance, and estates.
Most importantly, in March, 2021 the CFP Board, which manages this designation, announced it was adding a unit on the psychology of financial planning to the exam these professionals must pass to become certified. The board recognizes that your financial planner should not only understand every aspect of finance, but understand you as a person as well.
Financial planning is about more than compiling spreadsheets and making investments. A great financial planner should be able to connect with you on a personal level, understand your goals, and make you feel secure as you share your financial history and money beliefs. That’s why every financial planner at Facet Wealth is a CFP® professional. We’re here to help you build your best life - judgement-free.