Thinking About Money

How often do you think about money? Once a week, once a day, once an hour...even more frequently? Did you know there is often an inverse correlation between how often you think about money and your level of financial well-being? People who think about their money constantly generally have done more poorly with arranging their financial lives than those who think about their money only occasionally.

If you think about, and more specifically worry about, your money frequently you have not put in place processes that allow you to know with confidence how you stand financially. As is so often the case, the most important tool to help you gain this confidence is a formal budget.

Taking the time to put together a solid budget that includes what you value most and your financial goals allows you to stop thinking about money all the time. A budget, which you follow, that really captures what is important to you, gives you the freedom to not have to dwell on and think about each financial decision ad nauseum. You already know your goals are being funded in your budget, other money is designed for other purposes.

A second tool is having an investment portfolio that truly is designed to fund your various financial goals while staying true to your willingness to accept risk. A portfolio that is built to fund your short, medium, and long-term goals allows you to stop worrying about those goals. In fact, with a properly designed portfolio, you may find yourself not paying attention to the stock market at all. Combined with the well-designed budget, financial worries truly begin to melt away.

Other tools that help you think less about your money and focus more on your life include a comprehensive insurance portfolio and estate planning completed to allow you to know those important to you will be provided for.

I don't think there is any magic number for how often to think about your money. The number is likely different for each of us. Certainly it is important to consider your finances occasionally, and to make well-informed financial decisions. But if you find yourself constantly worrying about paying bills or reaching your financial goals or struggling with financial decisions, you are likely thinking about your finances too much.

Are there any additional tools you can think of to help reduce the amount of time needed thinking about money?

My Take On The Financial Alphabet Soup

If you've ever worked with or looked for a financial advisor, you may have noticed a variety of letters following different advisors' names. The financial services industry is littered with a litany of certifications and designations that professionals can earn. Some of these require little more than showing up for a couple hours on a weekend and sitting through a class to begin using the designation. Others require months or even years of study, significant testing, a commitment to a high standard of care, and continuing education. 

I want to give you my brief take on the importance of these various letters by answering two questions about designations. First, are any sets of letters meaningful to an individual looking for financial advice? Second, how do you pick between the different designations. My answer to both questions will be very simple.

Do Designations Matter?

I believe they do. While there are many designations and training programs that do not equip a professional to provide financial advice, there are several that do achieve this. I don't believe any program is perfect or even particularly close yet, but some are well on their way.

Does this mean a designation is necessary to be a good financial advisor? No, there are people who have learned the requisite knowledge on their own without a program. But if you're looking for a financial advisor right now, selecting someone with the correct designations gives you the confidence that they have at some point learned the material and hopefully maintained that knowledge.

Designations matter. They help you increase the likelihood you will select a good financial advisor.

What Designations Matter?

Now that you know the right designations can be meaningful, which should you look for? Again, I have a very simple answer, one that a great deal of people will disagree with. Every search for a financial advisor should begin by looking for a CERTIFIED FINANCIAL PLANNERTM certificant (often indicated by the use of the CFP® marks following an advisor’s name.)

Forget about all the other designations and education. I know I wrote above that there are several meaningful designations, but there is plenty of choice within the CERTIFIED FINANCIAL PLANNERTM ranks that you can simply ignore the others. Again, it's about increasing the probability you work with someone with the training necessary to help you and working with a CFP® does this. 

Selecting a CFP® does not guarantee you good advice; you still need to interview several potential advisors, determine if they offer the services you are looking for, investigate their histories, and make sure they are a good personality fit with you. But by limiting your search to only CFP® certificants, you increase the chance of working with a good financial advisor. You can feel confident they have the correct training, meet certain continuing education requirements, and are asked to work in your best interest. Whether they live up to these standards is a matter you have to determine for yourself.

Again, there are great financial advisors who do not hold the CFP® designation. If you work with one now, you may want to continue doing so. But if you are looking for an advisor today, I suggest you limit your search to CFP® certificants. Remember one designations. Don't confuse the issue. Many designations are designed to obfuscate the good from the bad. By focusing on only one, it becomes much easier to prevent this from happening.

Where Can I Find One?

The easiest way to locate a CFP® near you is to visit the Certified Financial Planner Board of Standards, Inc. website and use their CFP® Search tool based on your zip code. Select several and begin interviewing. Ask for references, find out what their focus is. Are they providing predominant investment advice, financial planning, life planning, or do they specialize otherwise? Are you similar to their ideal client? Make sure they offer what you are looking for. Check out their backgrounds on or

Finding a financial advisor can be a very overwhelming and confusing process. By cutting through the alphabet soup and only focusing on one designation, you can reduce this confusion considerably. Ultimately, you will still need to use your best judgement to determine whom you can trust and who will provide the services you want or need.

The Financial Mis-education of Our Country

Did you receive financial education as a child or young adult? Did you learn financial basics in school or from your parents? I certainly did not. I entered college with no concept about how to spend or save money, no concept about budgeting, no ideas about planning for the future. Worse yet, I was bombarded with misinformed financial lessons from every direction. Television and other media taught lessons of materialism and that success was defined by becoming rich.

I spent the past four weekends meeting with hundreds of individuals to provide basic financial advice. I spent countless hours discussing budgeting and the importance of setting financial goals and an emergency fund. I spent more time helping individuals try to dig out of financial emergencies, save their homes, and get control of their financial lives. Over and over, people told me they had virtually no financial education. Worse yet, they had never had anywhere to turn to get that financial education.

How can this be? How can financial education be left entirely to chance in our country? Money is one of the most powerful forces in society, yet we head into the world with only the mis-education we received from media and our parents to guide us. We are not even given the choice to seek good financial education.

Our education system and financial industry are failing in this regard. We must introduce financial education at a young age, the force money plays is simply too powerful to continue to ignore. Poor money knowledge destroys marriages, destroys lives and destroys our country.

The Best Credit Card Ever

Are you like the majority of Americans and carry a credit card balance? Do you use credit cards for both regular spending and impulse purchases? Last week,as I prepared for the day in my hotel room, I overheard a credit card commercial on the television that sounded great. This credit card company offered to help you reduce the amount of interest you paid and to give you control of your credit card. It was also a huge pile of baloney.

This commercial was wonderful. The company made a great presentation about their credit card. They offered nice features to help you try to pay less interest. They did everything in their power to make it sound like they were on your side, not on the interest-receiving side. It was a super job of marketing and salesmanship.

And it was all useless. Credit card companies are not trying to save you money! That would mean they are making less money. Do you really think that's the business they are in...saving you money? They may put tools in place to "help you avoid interest", but you can feel certain they are making up that lost money elsewhere such as in an annual fee, or late charges, or some other fee. Credit card companies are not on your side. Nothing could be further from the truth.

Don't, don't, DON'T fall for this type of credit card marketing.

Using credit cards and other debt instruments will have a profound, negative impact on your financial wellness. Deciding to use these cards is entirely under your control, and I would advise you not to use them. Debt kills reaching financial goals, particularly bad debt like credit card debt. Grab control, ignore the marketing and don't use credit cards.

Credit cards...great marketing, horrible product!

Financial Wellness Is About Understanding Your Financial Behaviors

I thought for today's blog post I would try something a bit different. I have become increasingly convinced that financial wellness is entirely a matter of understanding one's financial behaviors and strengths, then creating a boundaries and systems to help make well-informed financial decisions.

So for my blog post today, I'd like to challenge each of my readers to take the following steps:

First, recall a time when you made a financial decision which you recall fondly and makes you feel pride. Really let the memory and feelings fill you. Re-experience that moment.

Next, think about what led to that decision and what was in place that allowed you to make that decision. What were the circumstances. What types of boundaries had you set for yourself. Take a moment to really consider what had freed you to make that decision.

Finally, commit to allowing yourself to make financial decisions in this manner more regularly. Put in place the same circumstances that allowed you to make that initial financial decision that brought you pride.

Financial wellness is all about allowing yourself to make good financial decisions more frequently. This requires deep consideration about your financial behaviors and patterns, then creating boundaries and processes that allow you to make good decisions more frequently.

For me, this meant using primarily cash for day to day spending and forcing myself to physically go to the bank when choosing to spend extra money. The act of having to drive to the bank has often been enough to give me pause about a financial decision and make me consider more fully how much I valued the purchase I wanted to make.

What types of systems would help you make better financial decisions? Give it a try and commit to a financial behavior change. Commit it to paper, or as a comment below. Often telling others your plans can create a stronger commitment to the plan.


Photo by: qthomasbower

Some Top Financial To-Do's That You Are Probably Not Doing

I have a very simple post for you today. There are several financial to-do's that a great many people are not doing. You may be one of those people. There is nothing difficult here, nothing that takes a tremendous amount of work or sacrifice, nothing you have not heard before. Yet each of these items will improve your financial well-being. Start doing them.

1) Contribute enough to your company's retirement plan to receive the full employer match. If you are not doing this, you are returning a portion of your paycheck to your employer. This should be an absolute priority, even if your budget is very stretched. Is there any other instance where you would turn down a paycheck your employer hands you? You've earned that money...take it!

2) Speaking of a budget, create one. Do it now. Stop procrastinating. Creating a formal, planned budget is the single most important thing you can do to positively impact your financial well-being. Even if you never look at it again, the simple act of putting all your expenses to paper will help you become more aware of how you use your money and may spur you to make changes, if necessary.

3) Stop buying stuff. I'm not asking you to stop buying things you need or things you want and have planned for. Stuff is made up of the purchases you make that end up being used once or never used, that don't bring value to your life and that you made for some reason other than because it was important to you. Maybe that stuff was on a great sale. Or maybe there was a great commercial that made you really want that stuff. Maybe you don't know why you bought that stuff. Stop using your money to buy it.

There's nothing difficult here. Putting together a formal budget requires the most work, but will also have the greatest impact. These are all steps you can take on your own at little or no expense to you. Get started on each of these today, and you'll have already improved your financial well-being significantly with very little effort.

Couples Financial Concerns and Needs Survey

I am currently running a survey to determine the financial concerns and needs of newlyweds and other young couples. I plan to use the data collected to help me create a financial planning practice best positioned to truly help these couples. Your participation in this survey is greatly appreciated. I would also love if you would share this survey with others.

Poor Financial Decisions & Money Regret

We've all made poor financial decisions. You have, I have, and every other person out there has. What's more, each of us will continue to make poor financial decisions from time to time, regardless of how knowledgeable we are about finances. Last week, I discussed the money taboo in our society. Today I am going to discuss poor financial decisions and shame around those decision that are exacerbated by that taboo.

Making a poor financial decision is nothing to feel shame about. All of us act emotionally at times and make financial decisions colored by emotion. This can lead to bad results. Allowing the money taboo to prevent you from seeking help can create far more negative consequences than the initial poor decision, however. The period following a poor financial decision is exactly the time to seek advice from others; whether that be a financial professional, a parent, or a friend.

If you find yourself in a position where you have made a poor financial decision that is large enough that you need to make another decision about how to deal with it, don't go it alone. Seek help. Speak with a friend. Call a financial advisor. Talk to someone close to you. You will likely feel some embarrassment admitting your initial poor decision, but that is a small price to pay to prevent long-term severe financial damage. 

Your asking for advice will also help others. They will see you as an example of someone willing to discuss their mistakes and talk about money openly. This may make them more willing to seek help when the time comes that they make a poor financial decision.

Regretting a financial decision is not harmful, but allowing the money taboo to prevent you from seeking help can be very harmful. The money taboo in our society impacts us in many ways. Exploiting our money regret is one of the most powerful.

Budgets and Financial Plans Are About Balance, Not Sacrifice

Having a good budget and financial plan does not mean giving up everything important for you today to plan for later. Often when I have discussed budgeting with people, they have indicated they don't want to budget because they don't want to give up many of the things they value now for an uncertain future. A good budget, by which I mean a budget you will be committed to and brings you toward your goals, does not require you to give those things up that you value most. A good budget offers a tool to help you balance your present financial self and your future financial self.

If you have put together a budget that takes into account your values and your goals, you are already on the path to achieving this balance. The way you have built the budget will force you to prioritize what you value more. Do you prefer to have every television station possible available to you now, or would you prefer to purchase a new, fancy car in five years? You get to make that decision when you establish your budget. The budget itself does not judge your spending, it only forces you to decide what you value more.

A financial plan provides the exact same mechanism. A financial plan does not judge your decisions, although your financial planner may do so. A financial plan provides a tool to help you decide whether you value a current expense more or less than a future expense. It's your choice to decide which to pursue.

Budgets and financial plans help you create balance between the present and the future. They offer tools to help you prioritize what financial goals you value most. Don't buy the misconception that a budget or financial plan is about giving up what you value today. Budgeting and financial planning are about balancing today and tomorrow.

Financial Empowerment or Financial Advice?

In the next couple weeks I am going to be publishing a post about financial empowerment. Before I gave away my view on financial empowerment, I thought it would be interesting to poll my readers about what you would value more.

Would you prefer to work with a financial planner who's goal it is to financial empower you to make well-considered financial decision on your own? Or would you rather work with a financial planner who offers financial advice to help you work through the financial decision-making process?

Would You Rather Hire a Financial Planner Who Offers:

5 Simple Steps To Improve Your Financial Well-Being Now

Finances and financial planning can become very complex and intimidating. Often I believe large financial institutions intentionally make finances appear even more complex than necessary to convince you to seek help from one of their salespeople. There are some very important things you can do to dramatically improve your financial well-being that are extremely simple, however. Below I have listed a few steps you can take that will have great impact on your finances.

1. Spend half an hour today writing down (don't just think about it, but write it) what your perfect life would look like. Where would you live? What would you do for work? Whom would you share your life with? Include details.

2. Make a budget. Detail how you use your money now. It doesn't matter if this is a pencil and paper budget, a spreadsheet you set up, or an online budget like Make a budget that works for you. It can change your life.

3. Look at that "perfect life" you wrote down, and create two or three goals you will pursue beginning today that bring you closer to reaching the perfect life.

4. Review your budget. Is there anything that surprised you or that you wish you spent more money on or that you were very uncomfortable with? Decide if there is anything you spend money on now that would be better served to reach one of the goals you've written down. Adjust your budget to reflect that changed priority. Make sure to include your goals in your budget, this will create commitment to using your budget.

5. Consider your goals and "perfect life" before each major purchase. Does it help reach your goals or perfect life? Does the purchase represent a new goal of higher priority than what you've written down?

Making certain you are aware of how you are using your money and that it is in alignment with your goals and values will change your life. Keep pursuing your perfect life and recognizing what your priorities are, your financial well-being will improve.

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