Understanding Personal Finance Goals
From time to time, I get the question: “Hey, how are we doing compared to your other clients?”
It’s funny, other people’s experience has nothing to do with your experience, but humans are just like that. They like to measure themselves and they like to keep score.
For example, I recently heard about a research study done at Harvard University. The study offered participants one of two options:
- Option 1: Earn $50,000 per year while everyone else earns $25,000.
- Option 2: Earn $100,000 per year while everyone else earns $200,000.
The study instructed participants to assume that everything else would be held constant.
So, Option Two would give you twice the money and presumably would be twice as desirable. But guess what the research found.
Half of the people in the study didn’t want more money. They just wanted to have more than everybody else—even if it meant having less overall.
Let That Sink In For a Moment.
This study highlights an opportunity for most every family. Ask yourself, “What is money for?” I have often asked clients this. And many times, I get a blank stare. Many times the response is, “just in case.” And that’s great.
The point here is not to find fault with any answer. The point is to emphasize how important it is for YOU to find YOUR answer.
One way to get a handle on what your money is really for is to keep a Money Journal. Write down each time you spend some money and how it made you feel.
- Did it make you happy?
- Did it make you feel guilty?
- Did it bring a sense of calm and peace?
- Did it cause you anxiety?
- Would you do it again?
Keep this journal for a few weeks then take a moment to read through your notes and notice what you find. Hopefully, it will clarify what your money is for. And, maybe this will help you understand how much savings will be enough for your family.
When you start to think about what your money is for and how you will use your money to achieve your goals, you might find that you are looking for some good advice. If you would like to visit with me about your situation, I would be honored to help. Follow this LINK to find a time that works for you.
A great place to look for some solid advice is to talk with a CERTIFIED FINANCIAL PLANNER™ professional.
CFP® professionals are experienced, well-trained, professional advisors who are committed to helping you reach your financial goals. Talk to a couple in your area and see if it helps you clarify some things.
Yes, I am a CFP® professional. I’m always a fiduciary and I work on a fee basis. And yes, I’m still taking on a few great families to be part of my financial planning practice.
If this article has you thinking about your own circumstances, contact my office at rdunn@dunncreekadvisors.com. I am always happy to meet with people who are working on their retirement plans. Dunncreek Advisors does not provide legal or tax advice, nor is this article intended to do so.