What Fear Factor? Take It On, Stare It Down, Overcome Objections
Whether it’s New Year’s resolutions, a milestone birthday bucket list or a lifetime manifest of places to visit and food to eat, more than half of us create a catalog of events, goals and objectives. Achieving these goals is a road often blocked by one major factor: fear. Fear of imperfect results, unattainable goals, possible failure despite numerous attempts, distractions, expectations of others, big steps taken too soon and focusing on only the goal while ignoring the journey add up to an ambitious agenda too often shelved in favor of a safe existence, wondering about what could have, should have and would have been possible.
Money’s a factor in life’s bucket list; here’s how to face fiscal fears and move forward:
Take on the fear, don’t let it take over you
People afraid of their money will leave bank statements unopened, creditor calls unanswered and fail to track important money markers such as overdrafts, credit score, credit utilization ratio (the amount of credit in use each month versus the total amount available) and credit history. They don’t want to know where they stand; they’re afraid of how bad things might be if they peek at the numbers. Keeping tabs on your financial health is as important as the annual visits to the doctor and dentist; monitoring your fiscal baseline now means fewer problems in the future, and the ability to act fast if fraud appears on a financial statement.
Create a concrete plan for life
Money does not create order in your life. You create order in your life, with money as the constructive framework. Start saving early and put money away for what’s needed and wanted. Set up checking and savings accounts, an emergency fund, retirement savings at work (and take it with you via transfer to any new job), and specialized accounts for living expenses, entertainment and large purchases, including a home, car and vacations. A budget is a necessity, whether on paper, spreadsheet or budget software. Track what comes in and how it’s spent, and you’ll never wonder why you’re broke halfway through the month, or find yourself saying “I can’t go, I’ve got no money” when friends suggest dinner out.
Write down any objections and answer them
Think about previous money issues that stopped you from fulfilling your goals. Write out a list of why things didn’t go as planned. Then respond in writing to each scenario; how you intend to fix the situation before you say the words “I’m afraid” or “I can’t.” Now there’s a ready response next time the fear of possible financial failure looms and emotions derail your dreams. Your finances, now on firm ground, support your life, your bucket list or that once-in-a-lifetime travel adventure.
Attempting to broach any serious conversation with a loved one can lead to major anxiety depending on the topic at hand. Over the years, it has become more accepted to have frank discussions regarding a litany of subjects that were, at one time, considered too sensitive to approach.
The money discussion seems to have remained the steadfast untouchable topic among some. However, open and honest discussion about money issues with friends and family doesn’t have to be an uncomfortable chore. Here are some easy-to-follow tips on opening up the lines of communication about money with those nearest and dearest to you.
- Start Slow – You may want to ease into the money conversation, especially with regards to older family members who may not be as open to frank money discussions. Maybe bring up a recent news item that is topical and could lead to a deeper discussion about money matters.
- Remember You Are Not Alone – Money stress and worries are very common. It may surprise you to find that issues you are grappling with are issues for those you love as well. Finding common ground can help the discussion stay friendly and useful for all involved.
- Stay on Point – When discussing something as personal as finances, it can be easy to veer off topic or begin to accuse or object. You may find that breaking the talk up into smaller talks held over a longer period of time is more effective.
- Comparison is the Thief of Joy – Try to avoid comparing your financial situation with that of your loved one. We all have our own stories and we may be only receiving one side. Focus on your own situation in the midst of money discussions. If your discussion is one of concern or an attempt to help your loved one, try to remain focused on their current financial fitness and your role as listener.
The goal in any potentially awkward discussion is to remain focused, calm, and reasonable. This is important even in the face of a discussion partner who may not always approach things the same way. If a discussion begins to go “south” it is probably best to take a step back and attempt to address the issue at a later date. Money discussions do not have to leave a bad taste in anyone’s mouth. If you concentrate on the purpose behind the discussion and the connections you have (and want to maintain) with those involved in the conversation, the result can be win-win for everyone.
Talking to Loved Ones About Money: How to Offer Useful Guidance
Let’s face it: conversations about personal finances are usually uncomfortable. Especially with family members. Especially when your advice is past due. Although your parents, children, siblings, and significant other may trust your opinion on everything from fashion to food, schooling them on their spending habits can poke at their pride and force pushback.
They must be willing to listen to you
If they’re suppressing embarrassment, guilt, and shame while you’re talking, any financial brilliance you can offer is irrelevant. The key is to find a balance between being understanding and dishing out the tough love that’ll give them the help they need. You should be direct and logical; it’s not by chance that you’re the one in the financially superior position, so show them how you got there. Use examples from your own life that resemble their situation, if applicable. If you can relate to them in a personal way without using a condescending tone (easier said than done), you will give them an invitation to humility while giving credibility to yourself.
You have to know your stuff
If you’re not a financial advisor, it can be risky giving guidance to other people. Your intentions may be pure when you tell your brother how beneficial a 529 college savings plan can be for his children, but you might be causing more harm than good if the drawbacks aren’t clearly explained, as well. Do your best to share as much information as you can, but make sure your words aren’t the sole reasoning for their decision-making. Your full discretion here is vital. The endgame should be the improvement of their researching and analytical skills rather than simple memorization of individual facts and figures.
Follow up and show continued support
Giving your loved ones a copy of your fancy budget template and telling an inspirational, “I clawed my way up from the depths of debt” story are great ways to open their eyes and get them on the right track. It’s important to remember, though, that inspiration is perishable. Your motivated mentees have already made poor financial decisions that have resulted in poor financial situations. Changing the way in which they handle money is a slow process that requires patience. Your approachability is paramount; they need to know that you’ll have their back if they don’t get it quite right the first time around. Checking in with them periodically might seem annoying, but they’ll know it’s for their own good, and they’ll appreciate it more than they might admit.