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A Plan Can Help Your Complicated Relationship With Money

By January 17, 2023February 2nd, 2024One Wealth Perspectives

A healthy relationship requires accountability, so why would we treat our relationship with money any differently, and why does the topic of money create anxiety in relationships?

The answer to these questions likely come from issues stemming from our childhood, or other life events. Financial advice can help remedy these issues, but we first need to learn about the history of our relationship with money.

Take a client who spent their formative years in Europe during WWII. Unless they were the fortunate few, their family likely suffered catastrophic loss, leading to a lifetime fear of financial loss. Consider a client who grew up in a financially fortunate position, not needing to work through high school or college, now incapable of providing for themselves. The former client might not want to spend a penny on anything other than necessities. The latter has a tough time managing a budget. These may seem like two ends of extremes, but we have both versions of these clients in our practice and our goal for each of them is to reconcile years of anchored emotions that lead them to less than productive financial decisions. In both instances, they are not using their resources to their fullest, and therefore require advice that can help them make informed, unemotional decisions.

Enter the Financial Plan. A financial plan can help clients map how their resources are being allocated to achieve goals. Perhaps our European friend continues to choose to not spend their money, but at least they have been presented with a scenario that shows they are capable of spending more. Maybe our financially-fortunate friend decides to inhibit their productive spending after their financial model showed them how their habits would likely lead to a less optimistic outcome. Their Financial Plan clearly illustrated the downstream effects of their habits in real time. A Financial Plan can provide an objective blueprint of how life COULD look given a certain set of outcomes. Our advice can then focus back on WHY each client acts as they do, hopefully leading them to reevaluate their behaviors and live a happier and more peaceful life.

The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisors.
The views expressed in this commentary are subject to change based on market and other conditions. These documents may contain certain statements that may be deemed forward‐looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.