To get started, I'm going to ask you a few questions. Don't worry, they're simple. Let's go:
when did you graduate from college?
when did you get married?
what's your address?
how many square feet is your condo/apartment/house?
I imagine the answers among all of you reading this are quite varied. I also imagine if you asked the same exact questions to your best friend, neighbor, or co-worker, you're most likely going to get answers totally different than yours.
Let's try a few more questions. Also very simple questions:
how much do you make?
how much do you save?
what's your lifestyle like?
how much risk are you comfortable with in your investments?
how is your financial life impacted by your family dynamic?
what's the cost of living like in your area?
Again, if I asked 100 different people these exact same questions I'd get a whole bunch of different answers and maybe a few, at most, would be exactly the same. Each of these answers would be different because each of us has a different financial life. And our goals, our attitudes, our values around money. They're all different.
They're personal.
"It's never my money."
I learned this very early on in my career. I have very personal conversations with clients about their money. I can coach them on how to make better, more informed, more efficient decisions. But I can't make the decisions. And I can't make you make them, either.
Why? Because it's not my money. If I advise you to start saving more and you don't, I can't make you. I can show you the long term impact - how you'll likely have to retire on “X” amount of money, and what that might mean for you and your retirement. But I can't make you do it. That's personal. And perhaps that's why it's called personal finance.
You can find financial advice all over the internet. And you can apply it any myriad of ways, too. Generally speaking, the free financial advice serves as a guide. A broad, very generic guide intended to appeal to a large audience. It's rarely personalized.
One of the common questions I get asked quite a bit is how much money to keep in the bank. Cash, aka "pillow money." Google will tell you anywhere from 3 months to12 months. So how much is “correct?” It depends. What works for me might not work for you. And what works for you might not work for the person sitting next to you at the restaurant. Why? Because it's personal.
Here's another good one. Should I pay off my student loans or mortgage early, or invest the extra money? This depends. If you abhor debt, you're probably going to pay that debt off as fast as you can. If you think the extra money you're giving the bank can earn a higher rate of return elsewhere, then you might pay the loan(s) off as scheduled. Guess what? Also personal.
The clothes you wear, the house you live in, the car you drive: all very, very personal decisions.
When it comes to the decisions you make in and around your financial life, you should be making the decisions you believe are the best for you. Hindsight will always be 20/20 and we can always look back and say "what if?" Don't. That's akin to looking in the rearview mirror while trying to drive to your destination. And who knows what you'll miss on your way there?!
Instead, identify where you want your money to go, and why. Focus on factors you can control to help remove stress, anxiety, and worry from your financial life.
Here's a good exercise:
find one area of your financial life that troubles you
discuss it with your spouse/significant other/etc, if applicable
explore/brainstorm different ways to help alleviate or eliminate that trouble area
act on it, then evaluate how it made you feel
Now you're on your way to living your financial life on your terms.
Not sure where to start or how to go about doing this. Let me know. Sometimes we can benefit from a non-emotional vantage point to our financial decision making process.
And remember - it's never my money.
It's yours. And it's personal.