Money. Fear. Like peanut butter and jelly, money and fear are compatible companions.
Of course money brings up feelings of fear. Money is the clothes on your back and the roof over your head. Money is the tool you use to meet your basic needs, like health care, shelter, food and clothing as well as how you indulge.
Like a pair of pants that are too tight, fear makes you uncomfortable and looking for an out. We try lots of things to avoid or neutralize financial fear. Those I see most often are:
- The Ostrich Approach
- Fast Action
- Giving Away your Power
- Living Low
Let’s look at each one.
The Ostrich Approach
A lovely family vacation full of laughter, great meals together and new experiences. Back home, the credit card bill comes. If you open that credit card bill, all those great memories are going to be tainted by the size of that bill. You didn’t mean to spend that much money. Everyone was having such a good time. You want to hang onto the good times, so you avoid. And avoid some more.
Your new business is finally taking off. Sales are pouring in. You are working twelve hour days. Head down, you plough ahead. Exhausted, you collapse into bed every night. Then get up in the morning and repeat the blinding pace of the day before. This is what you always hoped for. Isn’t it? There’s just no time to think about planning, budgeting, and monitoring your expenses or analyzing your monthly financials and trends. When your CPA finally finishes your books for the year you discover that despite more than doubling your sales, you made less money this year than last year. How could this be?
New baby. Love, joy and responsibility! Here is this sweet young thing, totally dependent on you and your spouse/partner for all their needs. In a panic you think, I don’t have enough life insurance. So quick like a bunny you are online or with your agent and get a new policy for you and your spouse/partner.
Did you get the best insurance? The most cost effective insurance? Do you have extra money to spare so that if you overspend for life insurance it doesn’t matter?
And what bigger risk did you overlook? Disability. At 30 you are 4 times more likely to be disabled that to die.
Giving Away your Power
Your friends all use the same financial planner. Since they seem happy, he/she must be OK. You make an appointment for an initial consultation. He/she talks in language you don’t understand. The planner speaks with confidence and it all sounds overwhelming. Your inner voice says, “I’ll never understand this stuff” and “I have to trust somebody”. He/she is as good as it gets.
Your spouse loves budgeting, finance, investing and paying the family bills. You are all too happy to not have to deal with money; it just isn’t your thing. How do you get your needs met when they collide with your spouse’s idea of needs? Who listens to your goals, dreams and desires and fits them into your financial plan? Or even more unthinkable, what happens when the marriage falls apart or your spouse passes away unexpectedly?
For a large portion of my life, this was my favorite path to avoid fear. I lived low. You might call it frugality or penny pinching. It kept me financially safe. I had money, cash, investments and a thriving business. But it kept me from the fullness of life. Living low for me was such an ingrained habit that I would save for a purchase I really wanted, like new furniture and then procrastinate making the purchase…. for years!
You have a great business model. The best new idea since sliced bread. Like all CEO’s there are things you are good at and things you aren’t. Those areas where you personally excel, production, process and recruitment are working well. Finance and marketing feel like black holes to you and your business shows it. You know you need help in these areas. You interview lots of folks. Sticker shock sets in. What if you make a poor choice? What if you move forward and you don’t get the results you hoped for? You buy a few finance and marketing books, try some things on your own. You inch forward, building cash and waiting for the perfect moment to buy the expertise you so desperately need.
If you are honest with yourself, you’ve tried one or all of these strategies for avoiding financial fear. Sometimes you try them a la carte and sometimes they become lifelong habits like living low did for me.
All of these approaches can make you feel better in the short term, but none provides a satisfying path to prosperity. So what is the answer? How do you avoid fear, establish confidence and truly live a life at the Intersection of Joy and Money?
Like all important things in life, money deserves your time, attention and a plan. Before you go on a big trip, you have an itinerary. Before you build a house, you have an architectural plan. Before you get have a wedding, you plan all the details.
Can you go on a trip without an itinerary? Sure. Can you build a house without a plan? If you must. Can you have a wedding without a guest list and a venue? I guess so. But in all these cases you short change the experience. A trip without an itinerary brings you home realizing the things you missed. A house built without plans can, and probably, will come crashing down. And a wedding without a guest list or venue certainly won’t give you great memories of one of the most important days of your life.
Your life and your business are bigger than a trip, a house or a wedding. Money is how you get the things in your life that you need and want. Yet you try to live your life or run your business without a money plan, or financial plan.
The only consistent way out of The Ostrich Approach, Fast Action, Giving Away your Power and Living Low is to replace these strategies with a solid comprehensive financial planning approach. Done right, this is going to cost money and time in the short run. But like any wise investment, it will pay dividends for the rest of your life and the life of your business.
Here’s the catch. Buying financial services can be scary in and of itself. So scary, you take The Ostrich Approach to financial planning. But there is a way out! When looking for financial planning advice, there are four secrets to buying a plan that really works.
Here are the four secrets:
- Find a planner that is a coach or advocate. Most planners set themselves up to be a guru or expert. You want someone who will educate and empower you. Not make you feel intimidated and little.
- Banish shame or guilt from your process. If in your initial meeting you feel either of these, don’t engage. The past is the past. You want a planner to help you make better choices for your future, not one who shames you about your past choices.
- The plan becomes a way of living, not an event. A great plan provides a consistent methodology that supports you in making financial decisions that work for you. Plans that are one-time events, involving big books that go on your desk, are useless and a waste of your time and money.
- Welcome your intuition, emotions and feelings into the planning process. You don’t want to become a CFP or a PFS. But you have a way of knowing what is right for you. You feel it. You experience it. Like a glove that fits, advice that is right for you, feels good. Find a planner and a process that honors your truth.
Financial fear is a merry-go-round. It keeps us moving, going nowhere.
If you are tired of the fear merry-go-round now you know what to do. Find a financial planner and a planning process that encompasses the four secrets. Turn all that energy of fear into energy to power your path to prosperity.
The choice is yours; why not take the first step today?
Money can’t buy me love, but it does make the house payment!