24 Oct One Size Doesn’t Fit All
For most people, managing money is pretty simple: you are either doing it right, or you’re doing it wrong. Of course, what exactly constitutes ‘right’ or ‘wrong’ is usually never fully defined, though I can say with a degree of certainty that almost everyone I know believes they fit squarely in the ‘wrong’ category.
One of the first things my clients ask me is, “What do you think of my spending?” Which makes sense – I’m a financial coach, and they are seeking coaching – but the question typically comes from a place of judgment: the client has been judging him or herself mercilessly and expect me to lob a tomato or two myself. Only then can I give them THE ANSWER, a protocol sure to solve their financial problems.
The problem is that the magic money bullet doesn’t exist. Or, put another way: since we all have unique habits, hopes, and dreams, it makes sense that our approach to money would be equally unique. And that’s actually good news. It means that clients can chuck the guilt and we can get right to figuring out how to make their money hopes and dreams a reality.
Trent Hamm, over at The Simple Dollar, puts it nicely:
What matters is that we have meaningful goals that inform our use of our time and our money in a positive way. That’s true whether you’re highly career oriented or if you’re highly oriented toward retiring early. What matters is that you have a vision of your future, that vision is a positive one, and you’re working toward it in a meaningful fashion.
In my experience, it helps to make a few things clear.
- There is no empirically right or wrong way to spend money – whether money is spent properly or not is completely dependent upon whether that money is spent mindfully;
- That in order for us to work together to increase their financial wellness, they will need to do some internal work to discover:
a) what their life goals are;
b) what their financial history was and how it impacts them currently – both positively and negatively;
c) what their money scripts are and which ones are not serving them and need to reframed;
- Probably the most annoying point of all: I like to reiterate that no, clients are not stupid or undisciplined or uneducated. In fact, they have behaved with money as is appropriate given their background and experiences.
The first step to financial wellness, then, is not creating a spending plan (the kinder and more appropriate term for the much maligned budget), or tracking their spending. It’s identifying personal and professional goals and then learning how to use money as a way to help achieve them.