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Personal Finance, is just that, personal!

August 21, 2020

“It’s not personal,” Kathleen Kelley says to Joe Fox, “You mean it’s not personal to you!” is one of the most famous movie lines ever in the classic You’ve Got Mail!

While at a conference during my CeFT* certified financial transitionist program, we were doing a case study about a couple who had just inherited a good sum of money from the passing of one of their parents. It was going to be enough to do a few things they had dreamed about doing. 

I come from a certified financial coaching and certified financial transitionist background so I look at things a little differently, more on the emotional side of money.  A financial transitionist is someone who helps a person learn to grow through transition. It doesn’t just have to be loss of a person but a business, or the sale of a business, it can be retiring or moving but these are transitions.  Did you know that 95% of our financial decisions are made emotionally

Whether you are celebrating,  planning your spending, or calculating debt, money speaks to us. This is quite a trendy topic right now. It can be enormous comfort or it can derail our plans, and can even destroy relationships, it all depends on how we react. 

So..back to the case study, not being gender specific but the way the case went, having received their inheritance, this couple were deciding what to do. The husband in this story wanted to save money and move to a certain location in order to continue to save money. The wife wanted to take a vacation and also take a trip to see their grandchildren. In her mind she wanted to “live” which now includes the ability to travel and he wanted to “live” differently too through saving and being prudent. Most of the advisors in the room supported the husband’s conservative stance. I on the other hand said, “Wait, that is me on the vacation side.” I explained both are not right or wrong but different, hence personal finance. Personal finance is just that, very personal. Some of us are nerds and others of us are free spirits. Over the years, I’ve learned to be both a nerd when managing my financial decisions and a free spirit loving what I do within certain guidelines and saving for those fun moments. The goal is to understand each other's thoughts and work together towards both dreams and desires not discourage or put them down. Kind of a like a paradigm shift.

Think about it, it is our paradigm which means the way we perceive things which is usually based on our personal worldview and life experiences. Let me explain. Let’s say we are all heading to the Honda Center to see the Ducks play, we might spend $100 per ticket or even get a suite and pay $2000 plus purchase food and drinks. None of us complain because we have a desire to see a favored team play and hopefully win. What if there is someone who works there who just happens to be frustrated that they have to serve people popcorn, ice cream and hot dogs? They get paid to be able to see the team but they don’t see the same value in what we might see. It is all perspective. Money is like that, some of us value it too much, some of us value it too little, some of us give a lot away, some of us build things with it, plan with it but it really is very personal. 

There is a part of us that doesn’t want to be financially responsible or we feel we deserve something, and if we listen to that thought it could become a truth. Change happens when we face and embrace our reality, and learn from our past mistakes which is different for each of us. Understanding how we think about money personally is very important. Staying naive (or ignorant) about money can be an act of self preservation. However, as you explore your fears and beliefs you can then realize you shouldn’t avoid it but educate and question possibly some of our beliefs.

When I do something I’m not used to doing, it can trigger emotions, pain, doubt,  discomfort and even fear. The solution to that is number one, be aware, number two, understand it and number three, work on it. 

If we want to take a look at our at our relationship with money personally, something that helps is if you step back and take a look around you, your life, your home, your assets, your clothes, travel, family, this is what you really value and even asking the question, “Am I living in the consequence of my many decisions, good or bad?”

Being able to quit things that don’t work is an integral part of being a winner in finance even if you feel that your situation is complicated. Taking responsibility for poor decisions and understanding how you got there without remaining a victim. 

Although we shouldn’t confuse the complex with the difficult, most situations are simple, just emotionally difficult to act upon which might require change on our part.

What I have learned is not to close the windows and pull down the shades but to keep them open, see the spots on the window, the dust on the furniture and use this in order to continue to learn and understand what comes my way not only in finance but life in general.