Talking about money, in any setting, can feel taboo at best. Whether you struggle with money or you have plenty, it can be hard to know who to talk to money about and when.
30 billion “robocalls” were made in 2017 and over 482.5 million phishing attempts were detected. That’s a lot of fraud.
So what can you do to stay safe from security and finance fraud attempts like these… and what should you look out for as these scams become more and more sophisticated?
D Magazine, one of Dallas’s top publications, has been on a mission to provide a spotlight for the area since 1974. They share everything from local arts, culture, politics, fashion, food, and nightlife, but they’re particularly great at providing locals a list of the “best” in different categories.
I’ve been named one of D Magazine’s Top Financial Planners in Dallas for four years running.
I love my job. I think quite a few people say they love their jobs, but for me, it’s really true. Working with my clients is truly a privilege — they’re some of the most amazing and interesting people I’ve ever met. But aside from my great clients, I also love the work involved in being a Certified Financial Planner™. Why? Well, there are a few reasons...
When the markets fall, it can be intimidating for everyone — including your financial planner. As an individual, watching your account balances fall is stressful and, as a financial planner, we watch that happen to each of our clients. It’s hard to see our clients struggle.
Money and relationships can seem at odds sometimes. Especially when partners have different approaches and attachments to money, everyday discussions can become heated and difficult. If you’ve got some “money troubles” with your partner, know that you’re not alone.
Ready to reach your financial goals in 2019 and set yourself up long-term financial success? It doesn’t require an elaborate budget or downsizing in the majority of cases. In fact, it can be pretty simple: Review the big picture
When considering a Donor Advised Fund, there should be a balance between aggressively funding your giving goals to save money on taxes and assuring that your other financial goals are being met as well.
In the past two posts I’ve been writing about my client Evelyn, who recently experienced one of life's major transitions. In this final post, Evelyn has more advice for what can be a difficult period for some people.
This is the second part of my interview with my client, Evelyn, a 73-year-old divorcee and retired high school teacher, who is going through a new transition.
I recently visited a fifth grade classroom for a personal financial lesson. The ideas we talked about were simple, but the concepts hold true whether you are a grade school student or well into adult life.
As I’ve been examining why I have been resistant to goals, I have started re-thinking how I approach them, and I’ll tell you why. A goal is a clearly defined personal objective, something you want to achieve in a specific time period. What I have recently realized is that there are different types of goals; not all goals are equal nor should they be executed in the same way.
Just as you wouldn’t train for a sprint the same way you would train for a marathon, different goals will require different approaches.
There are three main types of goals: short-term, long-term and on-going goals.
During college I went through several intense, short-term goal periods. One particular summer, I regularly worked 80+ hours per week to pay for my fall tuition bill. I taped a goal meter on the wall next to my bed with the exact amount that I needed by the end of that summer marked on the top of it. Every time I earned a paycheck from my various jobs, I would take a red marker and draw in how much closer I was to my goal.
As the summer wore on and I wore out, that meter served as motivation. It prompted me to pick up another shift or not spend money. It was a constant visual reminder of my goal and exactly where I was on my way to achieving that goal.
That lifestyle was not sustainable over a long period of time, but it was doable for three months.
Short-term goals, as the name implies, are ones that can be attained in a short time frame. They can be goals that we are willing to dedicate an intense amount of energy to, although not all short-term goals are worthy of that energy. As an added benefit, their relatively immediate results allows us to clearly see how achieving our goals helps our lives.
Motivation techniques, such as a poster on your wall marking your progress, or an inspirational photo, work well for short-term goals. An action plan with specifics allows you to cross items off as they are achieved. Tracking incremental advancements can serve as motivation to keep going. Remember to keep day to day goals realistic, otherwise, you won‘t feel you are making progress.
A word here about accomplishment: as I said in my previous post, I have come to realize the wisdom in pausing to breathe as part of the goal setting cycle. Resting after completing a goal allows reflection on your accomplishment, gives perspective and re-energizes you for the next task.
Retirement is a long-term goal for me and my husband. I know that we need money saved, but because I haven’t formed specific plans for retirement, I don’t know what that will mean for us.
I can imagine the type of life we would want to live, but because there are so many unknowns, it’s next to impossible to anticipate the budget we will have. Even people who are a year or two from retirement often have trouble envisioning what it will look like!
However, just because I can’t clearly envision the specifics of that goal doesn’t mean I shouldn’t be setting a target for it.
Long-term goals are directional. I’m aware of the general direction I need to go to reach our retirement goal, even though I don’t know the details. I know that saving monthly for retirement now will give me the freedom to make more specific decisions down the road.
Treating a long-term goal like a short-term goal is a recipe for disaster. For a short-term goal, I may look at my bank account daily as a way of seeing if I am I on track. If I were to attempt the same thing for a long-term goal, like frequently checking a retirement account, the process would be frustrating at best.
Another example is a career goal. If your goal is to be in the C-suite of your company, revisiting how you have yet to attain that goal daily, weekly or even monthly will discourage you and set you back.
Long-term goals are the directional goals that you re-visit over time.
After months of spending too much at the grocery store and throwing away far too much food, I decided it was time to get my grocery shopping budget under control again. While that may seem simple to some, it is a goal that requires constant on-going attention and energy from me.
I sit down and plan out our meals once a week. If every meal is planned, I no longer have to decide multiple times throughout the week whether to eat what we have on hand or find an easier/faster option.
If you approach an on-going goal, such as regular exercise or controlling your budget, the same as you do a short-term or long-term goal, you are setting yourself up for failure. Sprinting for on-going goals becomes exhausting and not checking on them regularly makes it more likely that they won’t happen.
Clearly I won’t ever attain perfection in my goal of eliminating all the wasted food in our lives by meal planning. There are going to be successes and there are going to be days where I simply don’t have the time or energy to follow the plan. This is to be expected. Think of on-going goals as behavior training.
An article on the Mind Tools website reminds us that “unless you clearly define exactly what you want and understand why you want it the first place, your odds of success are considerably reduced”. When setting goals, remember the SMART acronym: they should be Specific, Measurable, Attainable, Relevant and Time-Bound.
Next time you set a goal, recognize what type it is (short-term, long-term, or on-going) and the amount of energy or patience that will be necessary. Having clear expectations and awareness of your direction will increase your chances of successfully attaining your goals.
I have struggled with goals lately. As a financial planner, I’m naturally wired to set goals. An integral part of working with my clients is looking at their goals and the financial ramifications of those goals. In fact, some of the most powerful meetings a financial planner can have the privilege of attending are those in which someone realizes that a dream they never thought was possible could actually become a reality.
Goal setting is powerful and necessary. I understand that, but I found myself resisting the idea of setting goals recently. This resistance was unfamiliar and something I simply didn’t understand.
When I don’t understand something, my first response is to try to figure it out. Why was I having an aversion to setting goals for the first time in memory? I had conversations with business consultants, goal-orientated friends and anyone who would talk to me about it. The common theme I heard was that once you achieve your goals, which was where I was at, you reassess and create new goals. It’s the cycle of success: set goals, achieve goals, set new goals, achieve those goals. Lather, rinse, repeat.
I found myself asking – what if I’m content, what if I have everything I want? I have a business I love, my family’s income is comfortable and I’m further along in my career than I could have imagined even a year beforehand. What if I don’t want or need more at this point?
Recalling my conversations about goals, I realized there is a lot of wisdom in being content. The purpose of life is not simply to achieve more, be more and have more.
After recognizing this, I decided to appreciate and enjoy this season of life that I had worked so hard for. I began, for the first time in my career, to allow myself to have slow afternoons and not look for a new designation or training or ways to grow my business.
As I freed myself from the pressure of achieving bigger and better goals, I found that I was resting.
Resting allowed me to focus on my daily life and enjoy my daily routine. Resting meant that my husband and I started spending time together instead of sacrificing that time for future career goals. Resting opened time in my calendar to drop everything for a friend who needed help one afternoon.
Resting has given me a better perspective. According to an article by Ferris Jabr in Scientific American, "downtime replenishes the brain’s stores of attention and motivation, encourages productivity and creativity, and is essential to both achieve our highest levels of performance and simply form stable memories in everyday life." Times of intense, focused work are for a season and are not supposed to be the constant. It’s good to allow periods of time to enjoy our accomplishments, instead of pushing them aside to move on to the next goal, just as it is good to have times of intense work. Besides, life has its ups and downs and different phases. There will be times in my life when I won’t have the luxury to relax; I’m guessing it’s wise to enjoy this slower pace while I have it.
Looking forward, I have several projects I want to start, but happily realize that I’ll be starting from a place of rest rather than a place of exhaustion. I now have the energy and focus to dedicate the time and mental exertion to what needs to be done.
I have come to realize the wisdom in pausing to breathe as part of the goal setting cycle. In fact, I would argue that resting is essential to successful goal setting and accomplishment.
Clients describe the meeting as shocking, even while admitting that they knew it was coming. It’s the financial planning meeting in which we look at their retirement projections to see if they are on track to meet their financial goals.
Some couples have figured it out. They know what they can spend; they live on a budget and have saved enough to be comfortable the rest of their lives. But for other couples, the meeting highlights adjustments they knew they needed to make.
And by adjustments, that can mean dramatic changes in their current lifestyle.
What to do when your lifestyle needs to change?
Get concrete numbers
When you come to terms with the fact that your lifestyle has to change, get concrete numbers. Talking in the abstract about needing to “cut back” is a lot different than knowing exactly how much money you need to be saving every year and what your ending budget number needs to be.
There are important numbers to consider when looking at spending cuts versus retirement dates or goals. If you were to work an extra year or five years, how does that change your financial picture? Often, those changes can have a dramatic effect on what you need to cut back.
Work with a financial planner
There are resources online, but I encourage you to find a financial planner you feel comfortable with and work with them through this process. Besides developing a relationship that aids financial recommendations, they can give you insights based on similar people’s experiences that they’ve worked with. A good financial planner will get to know you personally and offer advice tailored for you and your situation.
A knowledgeable financial planner will also help you identify the other areas in your finances to be aware of, expert advice that will help you should something unexpected happen. One gap in your insurance and an unfortunate incident can destroy your financial plan and everything you are working towards. Obviously, I’m biased, but I truly believe that the investment is worth it.
Identify your values
Knowing your values makes financial decisions so much simpler. It becomes easy to lose sight of what is really important to us, much of which doesn’t require a lot of money, and focus on the extras of life. Living life within your values creates the framework by which you begin to make intentional decisions.
In his New York Times column, David Brooks says it well: “Early in life you choose your identity by getting things. But later in an affluent life you discover or update your identity by throwing away what is no longer useful, true and beautiful.”
Consider Cutting Back Big
Big lifestyle changes are hard. Much of the popular advice you hear these days advocates cutting back on purchases like your everyday latte at Starbucks. While it’s true that small changes can make a difference, those results will be more subtle and long-term.
When you are faced with a lifestyle change, you must put all the options on the table. Some may be painful: downsizing your house, trading in your leased car, looking for another job, moving for a promotion, cutting your annual vacation. However, it’s necessary to consider every way in which you can make a significant change.
Begin Evaluating Every Option
Look at a list of all of your expenses and evaluate every line item. Begin by asking “why”. After evaluating what you money is being spent on specifically, ask why you are choosing to spend money on the items that you are. What are the alternatives? Even when alternative options seem far outside the realm of possibility, still include them. The purpose of this step is not to solve the problem, but to brainstorm every possible solution. Considering options that seem far from what you are willing to do (like trading your car for public transportation), give perspective and bring attention to the luxuries that you have in life.
Below are some examples of line item evaluations:
Car Payment: $650/month
Why am I spending money on this? Because I need transportation!
Why am I choosing my current option? Two cars are more convenient for our family and I’ve always wanted a BMW.
What are the alternatives? Sell it and have one car in the family, sell and buy a nicer car, sell and buy a less expensive car, sell and buy a used car, take public transportation.
How open am I to changing this (or do a scale of 1-10 on how important this is)?
If you were to change, what would be the monthly/yearly cost difference?
Eating Out: $400/month
Why am I spending money on this? Because we need to eat.
Why am I choosing my current option? We enjoy eating at restaurants and it’s convenient.
What are the alternatives? Eating out less, purchasing ready-made meals, personal chef, cooking all meals at home.
How open am I to changing this (or scale of 1-10)?
If I did make a change, what would be the monthly/yearly cost difference?
Begin to make decisions
After you have worked through your line item evaluations and identified what’s important to you, start making decisions.
As with so much in life, these decisions are not easy or clear cut. Every decision is a trade-off. What is right for one family is not going to be right for the next.
Remember to reflect back on why you are making these changes. It takes courage to make big decisions when your lifestyle has to change, but knowing why you are changing can make all the difference in the world.
If you find yourself unsure of your future and aren’t even sure if you need to cut back, I encourage you to consult with a financial advisor and begin the journey to achieving your financial goals.
In my freshman year of college I had to take the Clifton StrengthsFinder assessment. Two of my top five strengths were “Competition” and “Achiever.” Over the years I’ve had to come to terms with the blessings and curses of being a competitive overachiever.
“No matter how hard you tried, no matter how worthy your intentions, if you reached your goal but did not outperform your peers, the achievement feels hollow,” reads the description of the StrengthsFinder Competition Theme.
I have no doubt that my competitive nature helped me all throughout school. It served as a motivator when subjects seemed far from interesting and kept me focused on my education. But after I finished school and completed all my professional certifications, I was left with an emptiness. Without courses, I no longer had a yardstick to measure my success. There weren’t assignments and projects to overachieve on, there were no more “A”s to show or professors to tell me what a great job I had done.
I had to find a new way to compete and achieve. The obvious way to do this was to compare myself with those around me, my peers and friends, but I quickly realized how pointless that was.
Our Financial Perspectives
One of the incredible privileges I have in my career is getting an intimate look at other people’s finances, learning what is truly important to them and observing how they choose to live their lives.
I’ll never forget the conversation I had with one client couple. Their net worth was in the eight figures, and they lived well within their means. At the end of the meeting, they looked at me and said “We know we don’t have that much, but do you think we’ll be okay?”
At that moment I realized that, no matter how wealthy you are, there will always be someone who has more. Someone who has more money, a nicer house, a better education, a better career. Even people with lots of money feel this way.
I’ve worked with families who have far more money than I was raised with and people who have incredibly successful careers. I quickly realized that the happiest people were the ones who weren’t in a financial race. Yes, they had financial goals, but the goal wasn’t to simply make more money, the goal was rooted in a deeper value.
The happiest clients were the ones who knew what was important in their lives and pursued those values rather than simply valuing the accumulation of more money. They knew, accepted and weren’t bothered by the fact that there will always be someone out there with more money.
I’ve also seen people who were miserable in their careers despite making incredible salaries. Some would say they were winning at the comparison game, but losing at life.
Dangers in Financial Competition/Comparison
The very nature of competition is being aware of other people. But there is danger in judging your life by comparing it to other people’s.
It defines what you chase
It becomes far too easy to chase financial goals because you are trying to keep up with those around you, or worse, just because you want to beat someone. Jealousy, competition and keeping step with your social circles become the motivators instead of your core values.
It says where you're at isn’t good enough
Competition runs on the same premise as the advertising industry: that you need more. You need to be more successful and have more money and move faster through your career. Competition can easily sit at odds with contentment.
It defines happiness
Far too often, happiness is found in knowing that we are better off than others. A shallow sense of satisfaction is derived from knowing that when people visit our house, they will be impressed because it is nicer/bigger/better than theirs.
It breeds discontentment
The same is true when you don’t “win.” Comparison can breed discontent when you realize that your home will never compare with others, or that your career path with never result in a salary like your brother-in-law’s. Comparison shifts our focus from our lives to others.
Looking at Comparison in a Different Way
The best example I have of re-framing comparison is my mom. My mom has three daughters-in-law who are incredibly talented and amazing women. She has acknowledged that it would be easy for her to compare herself to them, to always try to play catch up with their beautifully decorated houses and various accomplishments.
One day, while talking with my mom, she said “I decided that instead of feeling insecure about my house not being as nicely decorated as theirs, I was going to be their biggest cheerleaders. I want to be the one leading the way in telling them how incredible they are and showing them off to the people I know.”
What a great perspective.
She continued by telling me how freeing it was when she made the decision to be their greatest supporter instead of subtly comparing herself with them.
How to Avoid the Hazards of Comparing
The first step in redefining the comparison game is to know what you value and the goals that you want to pursue. Know what is important to you.
The second step is to think differently about other’s successes. When you find yourself observing other people’s situations, instead of getting the emotional high or low, stop and think about what values the other person is holding to make those decisions. Are their lives or decisions ones that would fulfill your values? Are your motivations for living the life you have in line with your values?
The third step is to cheer others on. It doesn’t come natural at first, but when you see someone else's successes, be the one to applaud for them. Changing your mindset this way can be liberating and allows you to experience contentment and joy in seeing other’s successes.
I’ll leave you with a practical example of this. Several personal friends have been taking incredible vacations around the world. My husband and I were talking about this recently in light of our values. While we would certainly love to travel overseas, with limited vacation time and managing our budget, we realized that this couldn’t be and wasn’t our priority in life. We decided that instead of taking exotic trips overseas, we’ll be making more trips to South Dakota to visit family. Our values guide us to prioritizing our relationship and our future children’s relationship with their grandparents and extended family.
Yes, we would love to go on elaborate vacations, and we very well might do that someday, but letting our values dictate out choices has fostered contentment. We’re happy with the lives that we have chosen.