What does emotion have to do with financial planning?

What does emotion have to do with financial planning?

Money is something that holds a lot of power over people. In most people money is an extremely tense subject.

If someone is struggling to pay rent, the emotion around their finances is strongly negative. Let’s say after years of struggling to make ends meet, this person wins the lottery. Suddenly, their emotions about money are extremely positive, and this will affect how they treat it.

Most of my clients lie somewhere between the two extremes. How you view money has a lot to do with how you grew up, what your parents spent their money on, what your financial situation as a family was, and if anyone educated you on financial literacy.

So what does this have to do with financial planning?

I can either increase or decrease your financial stress depending upon the advice that I give. This is why it’s important that I listen closely to you, how you’re feeling, ask you about your perspective on finances, and your goals. You are putting me into a powerful position when you take my financial advice.

If I am too pushy with you, insisting that you take your money out of your emergency fund and put it into an interest building account, you might feel suddenly out of control. Your money might feel out of reach to you now, or you simply believe in having a huge emergency account at all times, and that is valid!! There is no reason to take you so far out of your comfort zone that you are riddled with anxiety.

I care about my clients deeply, and causing anxiety is the absolute last thing that I want to do.

I’ve said it once, and I’ll say it again; financial planning has no cookie cutter method. It has to be different for each client.

So at the end of the day, my advice will take into account your emotions more than it will the math of money. My goal is to help you reach your goals. We will work slowly and carefully, making sure that you always feel good about where your money is. After all, it’s YOUR money.

Nolan Financial Radio

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