Bigger Picture, Financial Planning

No More Excuses…

If you haven’t started a plan to reach your financial goals, what’s stopping you?

I’ve already put to rest the “I don’t have enough assets for an advisor” and “I don’t need to be planning yet” defenses here and here, so those can’t be the reason.  So what’s keeping you from meeting with a financial advisor?

Embarrassment and denial.

For some, not all, embarrassment is the reason. Embarrassment of past decisions. Embarrassment of inaction. Embarrassment of current financial situations. Embarrassment of fill in the blank. Unfortunately, far too many individuals don’t seek financial advice because they are embarrassed to share their financial past.

For some, not all, denial is the reason. Meeting with a financial advisor requires being upfront and honest about everything in your current financial situation, and sometimes we have some financial skeletons in our closet. It’s easier to keep those skeletons hidden and pretend as if they never happened, but meeting with a financial advisor requires coming face to face with those mistakes and having to own up to them–which isn’t pleasant.

For some, not all, it’s both.

I’m here to tell you it’s ok to have financial decisions in your past you are not proud of…we all have them. Financial advisors are not in the business of judging; we’re here to help our clients reach their goals, and sometimes that means helping them dig out of a hole before they can begin to make progress toward their future goals. And, I’ll let you in on a little secret, financial advisors are not without their own financial missteps. I’ll share one of my own financial regrets from the past with you later in this post.

Whether it be too much credit card or student loan debt, cashing in an old 401(k), not saving into your 401(k), cosigning on a friend’s car, or any other financial blunder you may have, there is a good chance your financial advisor has seen it before-they’ve probably seen worse. Whatever it may be, a financial advisor can help you address it and develop a plan to move forward fixing it.

It’s important you get past whatever is delaying you from working with a financial advisor because your greatest ally in financial planning is TIME–each day you delay, is one less day of moving toward your goal. It’s one less day of compounding interest working for you, and at the same time, it’s one more day of it working against you (debt).  It’s one less day of paying down an obligation that will eventually need to be paid down, and it’s one less day of saving.  Not addressing your skeletons head on only allows them to grow and become harder to tackle when you finally muster up the courage to address them.

It makes sense to start sooner rather than later, and a third party like a financial advisor is a tremendous resource. Not only can a financial advisor provide an unbiased opinion and recommendation, but as I mentioned before, there is a good chance that your situation has been addressed before, and a financial advisor is able to provide insight from past experience. In addition to helping you address the issues, a financial advisor can also help you avoid additional missteps in the future.

I mentioned I’d share one of my own financial skeletons–as a financial advisor, I’m not immune to making financial decisions I’d later regret. No advisor is–if they tell you they are, they’re lying.

In 2005, my wife and I decided it was time to purchase our first home. We were two years removed from college, and at the time I was working at a bank, and she was working for a homebuilder. In attempt to be responsible, we looked at the various neighborhoods her employer was building in to take advantage of employee discounts, and we decided on a small town home community. We were getting married in the following year, we didn’t have kids and we thought a town home would be perfect for us–we’d live there a couple of years, sell it, make a little money and move to a bigger home when we were ready to start a family.

Back then mortgage were being handed out like candy on Halloween, and we chose an 80-15-5 loan–80% 1st mortgage, 15% second mortgage and 5% down, which was a common approach. Naturally, the first mortgage was a variable rate mortgage on a seven year arm (meaning after seven years the interest rate would increase, and it usually would be a substantial jump); we chose seven years to give us more time to be prepared for our next move, and to avoid still being in the town home when the rate reset. I want you to think back to 2006 and what happened in the following years…the bubble in the real estate market popped.

In late 2007, prior to the financial markets freezing up we were able to secure a construction loan and begin the process of building our new home as the general contractors, and our plan was to sell our town home prior to the completion of our new home being complete–timing it perfectly so we’d only have to move once. Being responsible, we analyzed our financial situation just in case we were stuck with two mortgages for a few months, and although we’d have to cut back on saving as long as we had two mortgages, we’d be ok. We thought we had planned for everything.

I laugh as I type this because our timing could not have been worse. I’m sure you can guess how the story played out…our new home was finished, our town home was $25,000 under water, and we were stuck with it. Luckily, we’ve been able to rent it out to cover the costs, but we’re still underwater on it, and every once and awhile something breaks, and I’m reminded of the mistake we made.

Rather than dwell on the mistake, we’ve created a plan for the town home. We’ve refinanced to a fixed mortgage, are paying down the second mortgage more aggressively and we’ll eventually get to the point where it will make sense to either keep it as a rental property to add to our financial plan, or we’ll finally be in a place where we can get out from under it without having to bring a big check to closing.

I share this with you to show that although I am a financial advisor, I’ve made financial decisions I would love to take back when I was younger. Do I wish I could have a do-over? You bet. But, I can’t, and I’m not going to let our past decision hold us back from reaching our goals. It’s a part of the learning process.

What’s not a part of the learning process is to allow those decisions to prevent you from moving forward. So what should you do?

  1. Acknowledge the financial decision(s) holding you back.
  2. Seek help from a financial advisor–a true financial advisor, not a salesperson.
  3. Be honest with your financial advisor–share everything. We can’t help you if we don’t have all of the information.
  4. Develop a plan to address what’s holding you back, fix what needs to be fixed and then begin working on your future goals. It may take some time to start progressing toward your future goals, but you will get there.
  5. Continue to work with your financial advisor to make sure you are making progress, and to prevent future setbacks.

If you find yourself with financial skeletons in your closet, I want you to give yourself permission to no longer be embarrassed by them–it’s ok. What’s not ok, is not working with a professional because you don’t want to share those skeletons.

Your past is the past, and there is nothing you can do to change it. It’s time to accept it, start building a plan and begin moving forward!


Disclaimer: Nothing on this blog should be considered advice, or recommendations. If you have questions pertaining your individual situation you should consult your financial advisor. For all of the disclaimers, please see my disclaimers page.