It’s taken me a while to realize that not everyone loves financial planning. I mean, when I first started this I assumed all my clients would be deliriously happy about what a positive future we were going to plan together, and untangling any knots would be fun along the way. I love it, so everyone else should too, right?
It took me years to realize that many people who came to me were scared, embarrassed, or at least nervous. The great thing about working with people is that, in almost all cases, I can help most people make a good plan and feel much better. But I continually listen and try to learn, and after hearing so many stories over the years, I can distill a few principles which I repeat over and over to myself in my own life.
- You can never fix the past. In all the (now) hundreds of people I’ve seen, perhaps one or two had no regrets about their financial decisions. That’s not to say there weren’t regrets about other issues. Nevertheless, you have absolutely no way to rewrite your past decisions. Most of them either seemed right back then, or you knew they were wrong but did them anyway for what seemed like the easier or better way at the time. You have absolutely no control over the past at this point.
- The only reason to go over your past mistakes is to learn how to do better in the present and future (and to make atonement if necessary). If you can learn from this review how to make better decisions now and going forward, it’s worthwhile.
My first ex-husband has a wonderful phrase he uses to evaluate his public speaking engagements. If he thinks it went badly, he tells himself I was not satisfied with my performance. This is just a wonderful way to characterize a less-than-ideal effort, with no blame and every possibility to learn to improve. And yes, he’s a wonderful speaker.
- If it’s not working for you, you have to change. You can’t keep doing the same things and expect different results. Sure, something may be too hard (break it down into smaller steps), not have taken into consideration all factors (then revise until it works) and the ideal outcome may not be possible (but some improvement surely is).
- It’s not hopeless unless you’re dead. I’m not speaking of actual physical illness here, I’m talking about money. You may not be able to create exactly what you want (can we ever?) but you can almost always make things at least a little better.
- Any change is more likely to succeed if you can set it up so you make the fewest choices possible. It’s much harder to decide to save every month if you have to write the check or make the transfer, than it is if you decide to set up automatic transfers and forget about them thereafter—you’ve only made one choice, not 12.
- The older you are, the more creativity it may take. You can go back to school, relocate, get rid of a car—things that may have been unthinkable in years past can actually become liberating and unburdening. You most assuredly do not need all the stuff you have—no American does. Will a yard sale fully fund your retirement savings? No, but a lot of littles can add up to big.
Bottom line: a financial plan isn’t a punishment where you review all your past sins. It’s a way to wrest control from chaos and fine tune your financial engine to hum along at a better velocity.