You Can’t Afford to Not Be Good with Your Money

You want to be good with your money, but it’s hard!

Becoming good with your money is like someone trying to diet.  You’re not excited, even though you know it’s important.  Have you ever had this conversation with a patient?

“Mr. Jones, you need to lose 75lbs.  If you maintain an unhealthy weight, you are at higher risk for heart attacks, strokes, and vascular complications.”  

“Ok, Doc,” replies Mr. Jones, “What do I need to do?”

“Eat less and exercise more.”

“Ok, what could I do if I don’t want to do that?”

How many of you have had this conversation with your patients?  You’ve probably got your responses honed to a quick 1-2 minute talk about the importance of weight loss, with some medical facts and emotional pleas sprinkled throughout.  

You talk about the importance of personal responsibility, the importance of caring for themselves so they’ll be around long enough to care for their kids and grandkids.  Sometimes you get through to folks, but a lot of the time you won’t.  

Are you trying to be good with your money?  

They say, “Ok, I hear you saying I need to be better with money, but who’s got the time?  I’ll just hire someone to do that for me.”  That’s as insane as the patient who refuses to take responsibility for their personal health.  

Not only do you need to make the time, you can’t afford not to!  Trust me, no one is going to care as much as you do about your personal finances.  Everyone is too busy taking care of their own households to worry about whether you’re getting everything you need to manage your family’s money.  

A good financial advisor doesn’t absolve you of personal responsibility for your portfolio.  Personally, I haven’t used a financial advisor.  I have read dozens of books on the subject of personal finances, and I’ve been a DIY investor for more than a decade.  

I’m not against the concept of a financial advisor.  In fact, I think they are beneficial in many cases, but how can you know if they’re giving you good advice if you don’t know anything about the subject on which they’re advising you?  Blind faith is a bad way to approach a topic as important as your retirement dreams and your family’s financial legacy.  

No one is going to just hand you the knowledge you need.  

You need to own this part of your life by reading everything you can get your hands on regarding debt elimination, tax-advantaged savings, long-term investing, frugal living, and financial management strategies.  

You may think you’re good with your money, but are you making rookie mistakes?

I’ve been doing personal financial coaching for years, and I’m amazed at the consistency of the errors made by people in the area of personal finance.  

It’s rare for me to encounter someone who had a single major financial disaster befall them that caused their whole financial plan to crumble.  It’s much more typical that a client will be simply ignorant of some basic tenants of sound financial planning, or they will be unwilling to change their behaviors in order to reach their long-term financial goals.  

I was talking with a friend recently who told me that their parents had just reached millionaire status.  That might sound great, and it is a good thing, but they just became millionaires in their 60s after decades of making a six-figure income.  

That’s actually pretty terrible.  

They should have hit the million-dollar mark many years ago, had they been managing their money effectively.  

If you make a six-figure income, you have more margin than most people and are less likely to be financially crippled by failing to manage money effectively.  However, you’ll also be more likely to blow through your retirement savings after you quit working because you never built the habits that will lead to long-term financial success.  Success and failure are in your own hands.  No one can do this for you.  

Four reasons why you owe it to yourself, your family, and your community to be good with your money

1. You can’t count on a safety net.

Social Security might not be around when you retire.  

Pension funds can go bankrupt.  

If you aren’t controlling your own finances, you are depending on faceless bureaucracies to run your finances.  While the people who work there aren’t unsympathetic, they don’t know you personally and definitely won’t care as much about you as you care about yourself.  

Now, I’m not so pessimistic as to believe that there’s no way Social Security will be around when I retire, but I can tell you that my wife and I planned our finances around having no pension or Social Security when we retire.  We’re saving enough to take care of ourselves.  If pensions and Social Security are available, we’ll look at them as bonuses.

2. Your kids are watching you and will learn from you (good or bad).

Every parent wants to give their kids a better life than they had.  We all want good things for our children.  

Like it or not, your kids will learn financial management from you.  

If you spend money like it’s going out of style, and you don’t plan for the future, they’ll see that as normal.  If you are intentional about budgeting, saving, and long-term investing, and you teach them about those things deliberately, they’re much more likely to succeed financially.  

I can’t tell you how many of my coaching clients have said, “I wish I had known this stuff 20 years ago.  I’d be much better off now.”  You’re in a position to impact your kids in this arena, so take advantage of the opportunity.

3. Broke health care professionals can’t care for patients effectivelyif they’re distracted by their finances.

If you’re constantly worrying about when your next paycheck will arrive or whether the IRS is going to garnish your wages, or whether your car is about to be repossessed, you won’t be giving your patients your undivided attention.  

Distractions hurt our patients.  Give your patients the best of yourself! 

Don’t allow yourself sleepless nights worrying about finances.  Get control of your money so you don’t have to worry anymore.  Then, you’ll be able to focus on your patients and give them the attention they deserve.

4. If you’re an employer, your employees depend on you to be a good business owner.

This may not apply to everyone reading this, but if you can’t manage your finances and the finances of your business, you are putting your employees in financial jeopardy.  

You owe it to your team members to be smart about money.  

I’ll go one step further.  I think you owe it to them to teach them about smart money management so they will be successful in managing money long-term as well.  

If you think you’re not great with money, imagine how poorly equipped someone on your team may be to manage their own money.  Do you want your team members to be distracted about their finances?  Are they are thinking about how to keep the lights on until their next paycheck hits their bank account? If so, they’re not performing at peak efficiency at work due to distractions.  

Take the time and effort to teach them about how to manage money effectively.  Teaching them will have the added benefit of forcing you to understand things well enough to be able to teach them, and that will translate to enhanced financial literacy for you as well.

Final thoughts

It’s easy to look at financial management the way someone looks at a weight loss program or the way that kids have to eat their vegetables.  Just like we tell our kids that eating vegetables is good for you, learning some money management principles is good for you too.  

If you don’t take dominion over this area of your life, you will see money slip through your fingers and you won’t hit your retirement dreams or your long-term savings goals.  

The good news is that this information is out there for you, mostly for free, and it’s all easily accessible.  Just spending a few hours a week on reading financial management books or blogs will increase your knowledge dramatically.  Take the time to educate yourself.  Your family, your patients, and you will all be glad you did.  

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Further Reading

• Budgeting Part 1 – You WILL Fail Without a Budget
• Budgeting Part 2 – Five Easy Steps to Make a Budget that Helps You Win with Your Money
• You Can Be a Millionaire, and You Should!
• Budgeting Part 3 – How to Budget on an Irregular Income
• Financial Goals: Begin with the End in Mind
• The Beginner’s Guide to Student Loan Management
• How to Get Rich Fast (and Why You Shouldn’t Try to Do It)
• The Emergency Fund: The Account You Need That Won’t Make You Money
• View from the Trenches: Lessons Learned from Years of Financial Coaching
• Four Steps for Calculating Your Net Worth
• Generosity is the Cornerstone of Any Good Financial Plan
• 7 Little Changes That Will Make a Big Difference with Your Income
• Who Is on Your “Personal Board of Directors?”
• You’re Doing Your Insurance Wrong.  Here’s What You Need!

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