Family Matters

Posts Tagged ‘financial freedom’

This weekend, we had some friends over for a barbeque with their kids. The place was full of lively conversation, food and games and time went by quickly.

Since the men had not seen one another for a few weeks, we did a round of updates and Wayne told us he was planning to change his line of work and become a financial planner. As soon as he mentioned the words “financial planner”, the rest of us changed facial expressions and posture and it was clear we all had strong feelings about this profession.

This was by no means personal, because we like Wayne a lot, but we had all been visited by a financial planner or two and had all chosen not to use them. From that starting point, we felt Wayne was starting “on the back foot” and was headed into difficult, unpleasant territory.

As we talked, some interesting points emerged, which I would like to share with you, because they can help you become your very own financial planner and stop looking for one, if you are.

In many areas of life, we relive the same pattern over and over again, but we do not notice it. Just like riding a bike (the ultimate cliché about automatic habits), we pedal on, completely oblivious to each up and down movement.

Sometimes, circumstances make us take note of our patterns and we start thinking about them. Rarely, we change those ingrained ways of behavior and our life changes as a result, hopefully for the better.

Anthony Robbins compares human beings to thermostats. He says every person has a sense of where they feel comfortable and does many things subconsciously to stay in that place. Sure, everyone knows what would be better, but too good is also uncomfortable, because it does not fit our sense of identity and self worth.

So each of us lives within a certain range of “temperatures”. When it gets to “cold”, we take some action to “warm up”. When it gets to “hot”, we procrastinate for a while and even sabotage our previous efforts, until it is “nice and cozy” again.

One particular area in which this happens to us is our finances.

Money is a big part of every success in life. Money is an enabler – the more money you have, the more successful you can be. For example, my son is very successful as a musician, no doubt due to his special talent, but without the money we spend to support his musical journey, he could have never reached this level of success.

Unfortunately, there are a lot of things we should have learned at school, because as a society, we cannot rely on parents to be able to do it by themselves. For example, we cannot expect all parents to teach their kids literacy and numeracy because not all of them know enough and out of those who do, not many are also good at teaching.

Sabrina did not believe it when she overheard the school librarian talking about the days her grandfather had been so poor he used to walk 45 minutes to work to save the money required for a bus ticket. “He made all his money from the jar”, said the librarian to her friend. Sabrina thought he had made his money from building houses and was very surprised.

I hope that by now you are convinced it is better for you to be a happy, wealthy parent and all you need is some knowledge about the way to get there. As strange as this seems, not all people want to be wealthy and, sure enough, they are not.

Many people, when I talk to them about making money and being rich, come up with good “reasons” why they do not need to be rich. They tell themselves that rich people are sad, miserable, stingy and, most commonly, corrupt, and they do not want to be rich to avoid fitting these descriptions.

These beliefs were made up by poor people looking for ways to feel good about not having enough money or the skills to get it.

Financial struggles can put a lot of strain on family life. When I talk to people about the challenges in their life, many of them say that shortage of money is the main source of their difficulties. In this new series, I am giving you tips on how to be richer, starting with why to be richer!

Believe it or not, arguing about money is one of three main causes of divorce. Difference in priorities are a main cause of arguments in marriage and when divorce is considered an option, it is more likely that the couple will waste much of their energy on their biggest argument ever about money.

Chances are that partners in marriage have their own ways of spending and saving money. They bring their perception about money from their life before the marriage and many of them find it hard to strike a balance between what he wants and what she want, between what she thinks it is best and what he thinks it is best for the family’s future.

Here are some of the common conflicts around money:

1. What is necessary (food, clothes, jewelry, big screen TV…)?
2. Who needs to contribute more money (many high expectation from men and sometimes too high expectation by men themselves)?
3. Should homemaking be considered equal to financial contribution (try hiring a nanny, a chef, a cleaner, etc)?
4. Should we save for the future or enjoy life today?

When getting married, it is hard for a couple to estimate what their financial requirements will be. Every time they face a financial challenge, it hits them straight in the face and many couples, having poor money management skills, feel that there is just never enough money for what they want in life. Financially, the difference between single life and married life are huge.

Yes, if both husband and wife earned similar salaries, agreed on every cent they spent and the ways to save, many of them would not consider divorce so easily. There is a slim chance for you both to agree on every financial decision. Therefore, in marriage, it is wise to choose your financial battles.