Financial Life Focus

How to clearly navigate your financial life

Life (and Money) Transitions

Getting through the storm of change

It is FINALLY Spring here, after a rather miserable winter. But it’s still a transition period—from cold to warm, from bare branch to fully leafed—and it’s punctuated with stormy wet weather and periods of cold, reminding us that winter might not be fully behind us.

Life transitions can be like that too.  For some, transitions seem to effortlessly flow from one life stage to another. For others, it is more reminiscent of blizzard conditions. For Jane and Pete, talking about money has always been the latter. Their 35-year marriage was comprised of hit and run mentions of money and planning. Whenever Jane brought up the subject, Pete found a way to make it as short as possible.

But now retirement was looming on the horizon, so close that avoidance was no longer a possibility.

They’d each just completed a questionnaire that delved into their money history—covering their first money memory, lessons learned from their parents, the first time they bought something with money they earned and how they viewed their family from a money perspective. It didn't require novel-length answers, but words and phrases that were top of mind; kind of a tickle of memories. This gives me insight into clients’ beliefs about money, which translate into their money behaviors, habits and, ultimately, their money mindset.

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It is that money mindset, typically rooted in past experiences, that becomes an internal "root system" around money decisions.  Like in nature, root systems work behind the scenes, invisibly. And what you can’t see sometimes gets in your way.

Pete grew up in a family where money was the constant source of argument, eventually leading to divorce when he was nine. The bitterness around his family's break-up and financial difficulty left an indelible mark on Pete. Money was the source of anger, mistrust and divorce. As Pete was finally able to articulate, "It seems, after thinking about this, that my unwillingness to really talk about money was my way of keeping the marriage together. If I talked about it, it would lead to arguments and then we’d split up. I know, thinking about it now, that my thinking was pretty irrational, but it was my reaction. I just never thought about it."

Growing a new money mindset is not a top down decision. Pete didn't wake up one day and suddenly have a new mindset. He needed to establish new beliefs first. He had to come to terms with the fact that talking about money did not lead to argument or divorce. Once that root idea becomes firmly planted, Pete needed to change his behaviors—he needed to be able to talk about money with a decreasing degree of fear. And finally, it needed to become a positive habit.

He started working with a therapist to help him unload his past and set up a new belief system. It’s allowing Jane and Pete to focus on creating the transition they envision together. No more blizzards…

 

Michael F. Kay, a Certified Financial Planner, practitioner and a CPA, is president of the firm Financial Life Focus.

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