Relationships can be messy. They have their ups and downs, require work and are at times exhausting. Your relationship with money is no exception. Starting with your first visit from the tooth fairy and ending with your most recent paystub, you’ve endured a lifetime of saving, spending, needing, giving, investing, borrowing and lending money. Every stage of life brings fresh financial challenges for your relationship with money.
Not convinced? Think about the other relationships in your life and their common characteristics, and consider the following:
THERE WILL BE GOOD TIMES When your piggybank is overflowing or you receive a surprise bonus, everything feels right. You feel rich! You develop a love for money and the feeling it gives you, so you spend freely and invest with vigor. You look toward the future together with a gleam in your eye.
THERE WILL BE BAD TIMES Maybe you made a bad investment and the market crashed. Maybe you’ve been laid off and money is tight. During these challenges, money preoccupies you and dominates your thoughts. You swear off money but desperately want more, all while wondering how you’ll make it work.
THERE WILL BE BORING TIMES Saving, deducting, compounding and annualizing—isn’t it fun? Filing your taxes on time becomes an effort and your monthly statements all begin to look the same. Sometimes, maintaining a good relationship with money can lose its luster.
IT CAN FEEL REWARDING Maybe you retire after a lifetime of service or upgrade your home. Perhaps you improve your community or support those in need. Or, you’ve reached a financial goal and decide to take a well-deserved vacation. The hard work you’ve put into your relationship over the years can produce personally rewarding results.
YOU CAN’T IGNORE IT If you do your own thing and hope for the best, your finances may suffer. When making financial decisions, pay attention, ask questions and stay engaged. Balance the wants and needs of yourself—and your bank account—to maintain a healthy relationship.
YOU MAY NEED TO ASK FOR HELP Sometimes, you need an outsider to weigh in. Seek an expert when things get confusing, foreign or complicated. Introducing a neutral voice to the conversation can help you navigate difficult financial decisions. Taking a holistic view will help you focus on your full financial health.
From childhood to Social Security and beyond, these moments define the marriage between a person and their money. While seemingly actuarial on the surface, the financial decisions faced by the average investor are inextricably linked to a complex relationship spanning a lifetime. Early successes, false starts, surprises, close calls and tiny victories all create context for the questions faced by my clients.
BOTTOM LINE? Financial planning is more than spreadsheets and graphs. Instead, it should be viewed in a holistic context. When making important financial decisions, you are undeniably influenced by your own long-term relationship with money. Honor that relationship and continue to nurture it as you forge ahead. Remember, you’re in this one for the long haul.
Scott Mazuzan is a certified financial planner for F.L. Putnam Investment Management Company, an independent firm that provides investment management and financial planning services. You can follow his blog at http://www.flputnam.com/blog