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Lauren's Blog

Lauren’s blog covers topics that impact your finances, your family, and your future. Is there a topic you’d like Lauren to tackle? We’d love your suggestions and feedback.

Am I on the right path? Rosh Hashanah is the perfect time to be sure you’re on track

Am I on the right path?
Rosh Hashanah is the perfect time to be sure you’re on track

I’ve been listening to the inspiring Rabbi Lord Jonathan Sacks recently. His blog and his podcasts are inspiring (it’s no surprise coming from a man who served as Chief Rabbi of the United Hebrew Congregations of the Commonwealth for 22 years, was awarded the 2016 Templeton Prize, has taught at Yeshiva University, King’s College London, and New York University, and is the author of more than 30 books). His latest blog post, Investing Time, resonated with me. As I sit here today after the long Labor Day weekend, I ask myself, “Am I on the right path?” It’s a weighty question. Perhaps that’s why, so often, we tend to avoid it altogether—including from a financial perspective.

Sacks's blog post is rooted in the festivals of Rosh Hashanah and Yom Kippur, the days when Jews stop for a period of self-reflection. As Sacks says, “Time is short…without a wakeup call, we can sleepwalk through life, wasting time on things that are urgent but not important, or that promise happiness but fail to deliver it.” It’s a message that keeps coming back to me, both in my own life and in the lives of so many of my clients.

Like Dominic and Paula. When they retired two years ago, they found themselves in an enviable financial position. They had sizable retirement accounts after saving and investing for decades. They had wisely waited until age 70 to claim Social Security to maximize their benefits. (For more on the benefits of delaying your claim, read my blog post How long do you plan to live? And are you planning for it?) Plus, they each have something that has become increasingly rare: a guaranteed pension. They were enjoying their journey and had enough income to live a very (very!) good life.

What they didn’t have was a plan.

For the past two years, I’ve watched Dominic and Paula take oodles of money out of savings—far more than a safe 4% withdrawal. Dominic’s gut tells him everything will be just fine, so they have been living the high life. Though Paula stresses about how they can sustain their lifestyle, it’s easier to go with the flow and pretend money is not a concern. They say the current spending is temporary, but without a plan, they have no way to know when they need to change direction.

Sheryl is the opposite extreme. When her husband died last January, she took control of her finances—something she’d never had to do. Jack had handled everything himself, so she had no visibility into how much they owned or owed. Sheryl came to me for help right away, but changing direction has proved to be a challenge. We put together a carefully constructed plan, yet her emotions make her unable to see or believe the numbers. Because she feels off balance and out of control, her finances feel that way too. The result: she continues to work and continues to worry about money, even though she is far under-spending her savings. My job now is to help her stop and take an honest look at where she is today so she can trust that her path—and her plan—is on track.

Sacks says, “Rosh Hashanah and Yom Kippur are festivals that ask us how we have lived thus far. Have we drifted? Have we been traveling to the wrong destination? Does the way we live give us a sense of purpose, meaning, and fulfillment?” How interesting that these are the same questions we ask when building a financial plan. What have you done so far to reach your goals? Moreover, what can we do to be sure you are traveling in the direction of your goals and creating the financial capacity to live your life with a sense of purpose, meaning, and fulfillment?

What I find beautiful about this time of year is that it offers us hope. Our time on earth is short and “unlike money, time lost can never be regained.” When we invest our time wisely following Rabbi Sacks’s Ten Life-Changing Principles, we focus on the things that truly matter. And whether you are investing your time, your money, or both, you need a plan. Which once again brings me back to the words of the wise Rabbi: “Without it, we can sleepwalk through life, wasting time on things that are urgent but not important, or that promise happiness but fail to deliver it.”

No matter your faith or beliefs, may the new year bring health, happiness, joy, and peace.
L’ Shana Tova U’Metuka.

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From Tanzania: Lessons in the importance of community and the riches of living an ideal life

From Tanzania: Lessons in the importance of community and the riches of living an ideal life

 I'm on a plane again, this time on my way back home from a two-week safari adventure in Tanzania. 

 

Why Tanzania? Why a safari?  It was a trip planned by a women’s dive and travel club called the OBDC (short for the Old Broads Dive Club). Only women can be members, but many of the old broads bring along their old men, too. While I enjoy independent travel, there’s a special loveliness about traveling with a group of like-minded club members. Mfirst OBDC trip was to Fiji last year, and I loved it. So when the luxury safari trip to see the Great Migration was announced, I answered the call and encouraged my friend Robin to go, too. 

 

What an experience.  

 

If you’re unfamiliar with Tanzania, here are some of the facts about this distant part of the world. It is in East Africa and is the location of Mt. Kilimanjaro, Lake Victoria, and the Serengeti region. With a population of 55 million, per capita GDP is about $1,100 per year, and the workforce participation rate is low. (What a contrast to our dollar-driven society!) Unofficially, about 15% of the population does not have enough to eat. Yet, there are so many wonderful things about their society. The population consists of five major tribes, and about 120 tribes in total. People speak their tribal language, the national language of Swahili, and most learn EnglishThere is compulsory education until age 15, and the people take great in pride in their natural environment and their efforts to protect it 

 

Despite the obvious hardships, the people I met did not seem to be suffering. They are a proud, strong, loving community. They told us stories about when they gained their independence, and although the economy regressed after that, they are hopeful and dedicated to a better futureAt a village school we visited (where the children treated us like bona fide VIPs), one little girl told me she wants to be a pilot. Another wants to be a writer. These are people who work hard, cherish family, sing with joy, and are welcoming to strangers—even to 21 Old Broads whose lives and perspectives are worlds apart from their own. 

 

When we were on safari, wwere blessed with marvelous, English-speaking guides who seemed to know every fact there is to know about the incredibly beautiful Serengetithe national park where we traveled. As our guide drove us through the bush, he seemed to know all the other driver guides. For the people we had the good fortune of meeting, there was an easy joy that seemed to come from life itself and their relationships with each other.  

 

Henry Miller once wrote, “One’s destination is never a place, but always a new way of seeing things.” In Tanzania, the people we saw on the streets, met working at our resort, and served as our guides were all living examples of the importance of community in a world that, in my experience, seems to reward independence and the strength to go it alone. In villages that some might see as disadvantaged, I saw joy, hope, and love. Among a people who lacked money for what we Westerners might consider their most basic needs, they seemed to want little. By focusing on community and honoring nature, everyone around me seemed to be living fully—together. This overwhelming sense of community was infectious.  

 

Observing the behaviors of wildebeests, zebras, giraffes, elephants, baboon, birds, hippos, leopards (yes, we saw the big five) was the most amazing part of the journey. Elephantin matriarchal families took care of each other with soft, deliberate gentlenessMillions of wildebeest carefully herded their babies across the Mara riverAs we watched, our group connected at deeper levels and, much like the animals around us, we took gentle care of each other. Perhaps the lesson from the Tanzania trip was how the ability to live an ideal life is defined not by riches or belongings, but from the inside out, and by the community that holds us close 

 

The trip to Tanzania gave me the opportunity to see life stripped down to the basics—for the people around me and for all other species. What are the basics? They are more simple than you might think. What I saw was that all we really need are the natural resources to sustain us, and our interdependence and communityFor better or worse, iour developed society, our primary resource is money. We need money to obtain food, shelter, and clean water. We need money to care for our families and give them safe, healthyand happy lives. Without money, I could never have traveled to Tanzania to share another experience with my friends in the OBDCHowever, money will never—and can never—give us everything we need.  

 

As I head home to Southern California and back to life and business, the importance of community and its role in making it possible to live an ideal life—however you define it—is the lesson I am bringing back home. Perhaps that is the gift the Old Broads and Tanzania itself had in store for me all along. 

 

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From technology hell to financial nirvana, connecting the dots is the key

From technology hell to financial nirvana, connecting the dots is the key

I confess, I’ve been in technology hell for months. It’s not the first time. As a woman of a certain age, I wasn’t born into a tech-driven world like the Millennials. I don’t speak this language well— at best, I can converse with a thick accent, and I’m by no means fluent. Yes, I own an Alexa (Amazon’s allegedly life-changing device that can, according to my son Adam and my tech guy Jason, do just about anything I could ask). To date I’ve asked “her” to do two things for me: tell me the weather forecast, and set a timer for 10 minutes.I’m clearly missing the boat! But I just don’t get it.

I suppose that’s why I listened with a bit of guilty satisfaction when my friend Lily recently told me her saga of buying and installing a fancy new video doorbell and her own hell trying to get it installed. Long story short: it took 4 or 5 different people to help before Lily was able to see the person on the other side of her door. At least I know I’m not alone in my suffering and frustration! It does help, but it also has me wishing there were professional “technology planners” out there—someone to help me, Lily, and everyone else who doesn’t speak the language of technology get all of these potentially great tools to work together so we can, finally, use them to our advantage. That would be pure technology nirvana!

It makes me happy to realize that the role we play in most of our clients’ lives is to help connect the dots of their financial lives to create at least some level of financial nirvana. If you’re not yet there (or at least on your way), asking yourself these three questions may nudge you in the right direction:

  • Are you holding on to solutions that were great 5 years ago, but that aren’t adding value today?
    I have a box of “old technology” at home that I can’t get myself to throw away (that 5- pound laptop was wonderful in its day!), but deep down I know there’s no reason to keep it. In just a few years, everything in technology has changed. The same is often true in your financial life. Transitions—marriage, divorce, job change, retirement, losing a spouse, relocating—all of these things and more can have a dramatic impact on how you should be saving, spending, and investing. New financial products may be available today that didn’t exist five years ago. Are you using a Health Savings Account (HSA) to save for future medical expenses tax-free? Is your investment strategy aligned with your current goals and time horizon? Has your tax strategy changed to address the new tax law? Now is the time to let go of the old and bring in the new to connect all the right dots.

     
  • Do you understand the language of money?
    When we moved our office systems to the cloud, I wasn’t even sure what “cloud” meant. All I really knew was that it could protect client data and keep our software up to date with the latest versions. I drove our technology provider crazy. I asked a lot of questions so I could communicate in their language: the language of technology. Like technology, money has its own specialized vocabulary. Do you speak the language? Do you know the difference between good debt and bad debt? Do you understand compounding? Do you know what a CD is and its role in your portfolio? (If not, start by reading my blog When did it become ok to be financially illiterate?) The more you understand the language of money, the easier it will be to connect every aspect of your financial life.
  • Are you reaping the rewards of a fully connected financial life?
    Alexa can be used to manage your music, your thermostat, the lights in your house, and more—but only if the device is properly connected to everything else (or so they tell me!). Connecting all the pieces of your financial life is just as vital. Your investments, taxes, savings, budget, estate plan, and insurance are all interrelated. A “connected” strategy is the key to growing and protecting your assets over the long term. A great first step is to start connecting your financial life using an online app like eMoney. It’s a great tool that gives you a birds-eye-view of what you own and what you owe so you can both manage your finances and collaborate even better with your advisor.

I’m a firm believer in the importance of “knowing what I don’t know” and doing everything I can to learn more. To get there, I get help wherever I can find it. That includes hiring a professional to help me find a way out of my current technology hell. We may have moved everything to the cloud, but there are still some disconnects. Suddenly my scanner button isn’t working, two of my apps won’t open, and Skype thinks I don’t have a camera on my computer. Ugh! But I have a tech team coming to the office today, and I’m counting on them to fix what’s broken and to help me understand how to keep everything connected moving forward. We’ll be one step closer to technology nirvana.

I urge you to do the same when it comes to your finances. Ask questions. Get answers. And get the help you need to create a fully connected financial life that takes you one step closer to your financial nirvana—however you define it. That’s one thing I’m pretty certain Alexa can’t do for you… yet!

 

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Are you ready to become an investing Wonder Woman?

Are you ready to become an investing Wonder Woman?

The new Wonder Woman movie broke every box office record last weekend, and critics and audiences continue to shout praises, calling it one of the most entertaining—and empowering—movies this year. I had a great time seeing it myself, and while I’m no critic, I thought it was the perfect summer treat: a big, noisy movie with a woman super hero. What could be better?!

But while yes, having the power to win the battle of evil in the “war to end all wars” would be pretty great, what I really wish is that I could give every woman Diana-level confidence in a superpower she already has today. That superpower, of course, is investing.

Here’s the great news for all you warriors out there: Another study just came out that showed that women are better at investing than men. That’s something to celebrate! As a group, we plan better, we take less risk, and (this should be no news to anyone!) we’re more patient—and these are all factors that add up to larger returns in the world of investing. But here’s the not-so-good news: we lack the confidence of Diana. Despite the data, women continue to see men as better, smarter investors. Among 1,500 women polled last December, only 9% thought women would earn a bigger year-end return than men. That’s a disconnect that matters. After all, if we don’t see ourselves as smart investors, how can we ever overcome the earnings gap and finally take control of our own finances?

Whether you’re one of the doubters or you have complete confidence on your investing skills, here are five things every woman can do today to become an investing Wonder Woman:

  1. Own the fact that you have the mindset to be a wise investor.
    Diana has the skills to fight evil. You have what it takes to be a great investor. Know this. Research shows that when women take the helm for our own retirement planning, we tend to be smarter, more levelheaded investors. And yet in most families, men have the trusted relationship with a financial advisor, while women take on the role of a “financial child” in the household. It’s time to take a different path. Trust that you have what it takes to make smart investment decisions, and talk to your advisor yourself to be sure your investments address your own needs and are aligned with your own values. And if you need to build up your knowledge of the basics, start with my blog post When did it become ok to be financially illiterate?
     
  2. Make retirement planning your number-one priority.
    Longevity is a huge issue for women. According to the Centers for Disease Control and Prevention, women can expect to live about five years longer than men. At the same time, between taking time off to care for children and our own aging parents, a persistent wage gap that reduces our take-home pay as well as our future Social Security payments, and a historically lower pay rate, we typically have fewer resources to fund our longer lives. That means it’s critical that you start planning for retirement as early as possible. While you may not be able to overcome some of the gender barriers that can haunt any woman’s account balance, the combination of persistence and compounding can help close that gap.
     
  3. Pay your future self first.
    If you’re like most women, it’s easy to put saving for retirement on the back burner. But let’s face it: there will always be bills to pay and extra expenses to manage. To be sure your retirement doesn’t get lost in the financial shuffle, work with your advisor to determine how much you need to save, and then set a schedule to pay yourself first—every month. The more automated your contributions can be, the better. And rather than feeling deprived, think of that savings as a “freedom fund” for your future self. A June 2016 studyshowed that 83% of women in the US aren't saving enough for retirement. Don’t represent that statistic! By being diligent now, you can create your own financial freedom—no matter how you choose to spend your time later in life.
     
  4. Make conscious decisions about 'image' purchases.
    As a professional woman and business owner, I know all too well how expensive the societal pressures can be for women to spend on our images. We are judged by appearances much more than men, so the cost of a wardrobe, manicures, haircuts, and more can take a very real bite out of every paycheck—which is already smaller than a man's. (Just ask Hillary Clinton, who has said she was thrilled to put away her makeup after losing her Presidential bid last year; I doubt any male candidates felt the same relief!) It's a double standard, and whether you are paying your bill at Nordstrom or the plastic surgeon, it all adds up. Remember: your image is important, but that doesn't mean you need a Prada suit to look your best. Decide which purchases are necessities, which are optional, and be honest about what you can really afford.
     
  5. Fight like a superhero for equal pay!
    Women still earn less than 100% of a man’s dollar, and that will likely never change without pay visibility. For decades, corporations have promoted a culture of secrecy about pay. This reality puts women and minorities at a distinct disadvantage. After all, how can we advocate for ourselves if we don’t even know what our co-workers earn? By removing the taboos around pay transparency, we can end this inequality once and for all. At the same time, we need to start placing a real, tangible economic value on caring for children and aging parents—work that is largely taken on by women. By offering benefits such as disability insurance, health insurance, and Social Security credits for this very real and necessary work, we can finally begin to recognize that the care being provided is a valuable part of the fabric of our community and our society as a whole.

Women can be great investors, but our mindset alone isn’t enough to change our trajectory. Just like Diana, Princess of the Amazon, we need to take real action. We need to see ourselves as the smart investors we are, focus on saving for our own futures, and balance our need to create a great image with our need to gain a greater financial advantage. And we need to fight the good fight for equal pay—even if it takes Diana’s God-killer Sword and Lasso of Truth to spur on salary transparency! Lastly, even Wonder Woman counts on the rest of the Justice League to help her succeed. Find a team you trust, and start taking control of your financial life today. Your future self will thank you for taking your job as an investing Wonder Woman seriously—no shield required.

Photo: TM © 2017 DC Comics

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Get ready for a great New Year’s resolution (and to stick to it!)

Get ready for a great New Year’s resolution (and to stick to it!)

When it comes to New Year’s resolutions, there are three distinct camps: those who refuse them; those who make them—and break them by January 3; and those who make a true effort to improve themselves and their lives by making a change in the coming year. As someone who is continually striving to live a better, stronger, healthier life, I’m in that third group. And while I’m not always successful, I really do try.

Every year I make a list of my intentions for the next 12 months. As you’d expect, it includes the usual suspects. Lose some more weight. Reduce my golf handicap. Walk and meditate every day. But as I began to think about my list for 2017, I knew it was time to take the whole idea of resolutions a step further. I wanted to come up with personal and financial goals that were concrete—and that I knew I cared deeply enough about to be sure I followed through.

Then, last week, I got a brilliant idea: reach out to others for insight! I started emailing friends and clients right away, asking for their own personal and financial resolutions for the coming year (and promising to change their names in my blog to keep their thoughts anonymous). As I anticipated, the responses were each glorious in their own way…and they gave me the encouragement I needed to make my own resolutions as honest, direct, and thoughtful as possible. It seems almost everyone is dedicated to making 2017 a truly meaningful year.

The personal resolutions I received ran the gamut, including cutting back on sugar or alcohol, sleeping more (or hitting the snooze button less!), and being mindful about personal choices and the relationships that matter most and, as one friend wrote so eloquently, “to live more in the moment with love and gratitude.” Not surprisingly, aging was a big driver for those in my own generation, and their resolutions seemed to seep with sage wisdom. “As we age, we are confronted with losses in terms of our own health and the health of others and losses in many other aspects of living,” wrote Cynthia. “It is a natural and normal part of aging. My choice is to focus on gratitude rather than the losses.” Beautiful. For Liz, her own health is becoming an even greater priority. As a result, she is taking dieting to a whole new level, resolving to transition to a vegetarian or even a vegan diet to add some years to her life. “At 67, I’m beginning to feel vulnerable,” she says. Oh, how I can relate! Susan wants to meditate every day, Emma is working to “be less reactive when someone says something that upsets me, and try to put a smile on at least one person's face a day,” and Carol intends to “count every moment as the most precious there is” and to “live in the now.” (All three women would feel right at home in my Sangha meditation group, which you can read about in my Yom Kippur blog.)

As I read through the financial resolutions, I was suddenly filled with gratitude, knowing that I’ve helped more than a handful of people evolve to where they are today when it comes to money. Many said they were committed to paying off all their credit card debt, building a real budget and emergency fund, or eating out less to save more. Nicole is making an effort to “start planning for retirement, and to be happy with what I have.” What a perfect starting point. John’s goal is more specific: “I want to reduce my spending by at least $1,000/month.” Similarly, Anne realized that watching individual stocks was driving her crazy, so she converted her portfolio to a broad mix of ETFs. What a great way to remove the emotions from investing. Kelly wants to “keep abreast of what’s happening” in finance, and Marcia wrote the she plans to “continue taking on more responsibility financially.” (As a huge advocate of being your own financial fiduciary, this was music to my ears! Read more in my blog on financial literacy.)

All of these (and the many others I so gratefully received) are fantastic. Of course, the challenge for most of us is sticking to our resolutions. Over the years, I’ve found that writing down my resolutions—and putting that written reminder somewhere I will see it daily—makes a huge difference. It can also help to have an “accountability partner,” someone you can trust to hold your feet to the fire and press you forward right when that potentially life-changing resolution feels like it’s about to fall by the wayside. And, as is true for any change in behavior, do what you can to turn your resolution into a real habit. As soon as I read Beth’s resolution, I knew she was ready to tackle this part of the challenge. She not only wants to “recommit to improving my keyboard skills,” but she has a plan to make it happen by establishing a routine of playing the piano for a minimum of one hour each week. Every one of us would be wise to do the same. If creating new habits is a challenge for you, check out the WOOP approach—a scientifically based (and easy-to-use) method for increasing your motivation and, yes, ensuring those New Year’s resolutions become a reality in 2017.

When Pat responded to my query about New Year’s resolutions, he returned the challenge: “I'll share mine,” he wrote. “But I'd like you to share yours with me. I trust that you'll do that!” Plus, he upped the ante a bit with two pretty spectacular resolutions. The first was to “Be a good example to my children for financial management and security.” The second: “Devote 10% of my time, energy, and financial resources to ACTION for the climate change problem.” Wow.

To live up to my end of the bargain, here are my resolutions for 2017. I welcome you all to be my accountability partners to help keep me on track throughout the year. I’m happy to do the same in return.

Financially, I want to gain the courage to believe in myself fully, and to commit to the economic value of what I do. (Despite being a feminist to the core, I tend to undervalue and under-price myself, charging a ‘woman’s dollar for a man’s work.’)

Personally, the list is long, but the most important changes are to be less reactive to others, to entertain at home more often and, most importantly, to not be so co-dependent with others by understanding that I can’t stop others from failing—I can only improve myself and my choices.

And to help those who will likely suffer the most as a result of the policies of the incoming Trump administration, I want to find a way to help protect children, the environment, and women’s rights. Oh…and, yeah. And as corny as it my sound, I want to help shift us toward world peace. If none of us stop striving, perhaps one day we can make that dream come true!

I wish you all a happy, healthy, and prosperous New Year!

 

 

 

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Finance and feelings: Navigating life's twists and turns

“Take the emotion out of money.” At one time or another, you’ve probably heard this advice, whether you’ve heeded it or not. But is it the best advice?

Last week I was happy to host a presentation and discussion with Dave Jetson, a therapist and financial counselor who would certainly disagree with those words of wisdom. In his work and his writings (his latest book is Finding Emotional Freedom: Access the Truth Your Brain Already Knows), Dave focuses on helping individuals explore and heal money issues.Over the course of the evening, Dave shared how our emotions impact our financial decisions, and how three parts of our brains—our “trauma child,” conscious brain, and inner child—all compete for our resources and dictate how we save and how we spend. As a financial advisor, I found Dave’s thoughts and research to be in line with my experience observing how feelings can cloud judgment and, all too often, derail the best-laid financial plans.

It’s no mystery that money is an emotional hot topic for almost everyone. Even though we know intellectually that money is simply a necessary tool to support our goals, most of us can’t help but have feelings (and often lots of them!) about money. And those feelings, whether they’re conscious or not, can cause some very real issues when it comes to making smart decisions.  Issues that typically cause the most conflict are rooted in our fears about money, safety, and survival. Dave refers to this fear as the reaction of the “trauma child”—the part of us that, at a very young age, formed our deep-rooted reactions to money. Like Dave, I’ve found that it’s important not to ignore these feelings when they come up, but instead to connect with them and share them—especially when making decisions together with your partner. Here’s an example:

My clients Julian and Karen have very different perspectives about money. Julian was raised by a single mother and money was always a challenge, so he has a lot of fear about being able to provide for his family. To manage his fear, he is hyper rational about money. He serves as the financial regulator in the family, setting the budget and the savings rates, and taking full responsibility for meeting their financial goals. His wife Karen, on the other hand, was raised in an affluent family and never had to worry about money. Since Julian takes the reins financially, she doesn’t have to worry about survival, so she’s free to focus on keeping the family healthy and happy. That structure seemed to work well, until recently when they faced a financial crisis that challenged their thinking. When their pre-teen daughter showed signs of serious depression and needed a residential treatment program, Karen called me in tears. Julian was refusing to spend the money needed to pay for his daughter’s treatment, and talking to him about the issue was leading nowhere.

I was so glad she called. Clearly this crisis was bringing some big emotions into play, and those feelings were clouding the real issues. Whether it was their “trauma children” interfering or some other issue, I knew I needed to tread carefully. But I also knew that, ultimately, they both wanted the same things: a happy, healthy, financially secure family. With that as a basis, I was able to help. I asked them to meet with me as soon as possible to talk through the issue and see if we could agree on a solution. When we sat down together, I began by asking them to revisit their shared values. Next, we talked about their fears. Julian opened up about his fear of getting off track from their savings plan. “We don’t even know if this treatment will work, and it will set us back a lot. How can we be sure we have enough money to cover the expense and still be on track for retirement?” Karen shared her fears for her daughter. “Depression is a serious issue. What is it worth to us to be sure she can recover and be safe and happy?” Then she shared about her sister’s depression growing up and how much it had scared her. “I couldn’t do anything for her, and it made me feel helpless.”

As we talked, I could see the walls come down. In less than an hour, Julian and Karen had “felt” their way through the issue instead of “thinking” their way through it. They both had a new appreciation for where the other was coming from and, most importantly, they were re-focused on their shared values and goals. Julian was able to see that this crisis was a small wrinkle in their big-picture plan—not a derailment—and Karen was no longer angry at his initial reaction to what she saw as an urgent need.

It may sound a lot like a full-fledged psychotherapy session, and while I’m certainly not a therapist, financial planning is, by definition, a type of intervention. The purpose of creating a financial plan is to help identify your values, understand your goals, and create a tangible path to achieving your short- and long-term objectives. But even with a great plan in place, there’s always (and I mean always) an unexpected twist and turn. At one time or another, every family will face a crisis that drives them back to that emotional place and forces them to deal with a “trauma child” throwing a fit that can threaten to undo even the best-laid plans.

As Dave Jetson shared last Thursday, “Our ‘trauma brain’ is the same as our financial brain.” That’s why it’s important to pay attention to what we’re feeling first, and then tackle the dollars and cents of the equation. So the next time you’re facing a financial decision that has you feeling less than peaceful, take the time to connect with what you’re feeling rather than “taking the emotion out of money.” I expect you’ll find it’s a much easier path to wise, rational decisions—about money and just about everything else.

Need help figuring out how to navigate your emotions to make better financial decisions? Let’s schedule a time to chat. As always, I’m here to help.

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Newport Beach, CA 92660
Phone: 949-477-4990
Fax: 714-464-4481
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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All written content on this site is for information purposes only. Opinions expressed herein are solely those of Lauren S. Klein, President, Klein Financial Advisors, Inc. Material presented is believed to be from reliable sources and we make no representations as to its accuracy or completeness. Read More >