Confessions of a Financial Planner
We humans are social creatures, wired for connection. We connect most easily when we feel a sense of common ground, something that binds us. As we strive to create a world that embraces diversity, that common ground comes more from shared values, goals, or experiences.
I have benefited from groups of moms, wise women, yogis, business owners, financial planners, and seekers. These communities have, and continue to, play an important role in my life. We learn from each other and support each other. We remind each other that we aren’t alone, and that we are smarter and stronger than we often give ourselves credit for.
In my role as a financial professional, there's less opportunity for me to talk about my financial challenges. For me, this can lead to feeling isolated. For my clients, it can lead to the perception that I don't have any, that I somehow have it all figured out. Let me dispel that myth by telling you some of my struggles and mistakes.
#1 Misusing Debt
It took me well into my thirties to pay off debt I began to accumulate at 18. I spend years juggling accounts, trying to reduce rates, and refinancing, including home equities and a 401k loan. The last payment I made probably contained a tiny remnant of my first purchase, a designer business suit I had no business buying. It was a painful lesson, hard won, and it’s why I am so committed to educating young people about good financial habits. I know the frustration and shame that developing bad ones can bring.
#2 Failing to Maintain a Sufficient Emergency Fund
Embarrassingly, this is far more recent than the first. I know that 12 to 18 months of expenses is what I need to keep my household secure & help me sleep well at night. When I decided to use my emergency fund to pay down my mortgage balance in order to qualify for a better rate and a shorter term, I promised myself I would build it back up over the course of a year. Two at most. Four years later, and I was still nowhere near where I should have been.
#3 Using Mental Accounts Instead of Actual Accounts
I loved magic as a kid. Co-mingling my emergency fund with my operating fund, was a kind of money magic. An illusion that allowed me to double dip, to consider my seasonal spike in cash from tax season as both operating reserves and emergency fund. As we both know, you can't spend the same dollar twice. (BTW, this explains how I managed to sleep after #2)
#4 Inadequate Planning
This is the toughest for me to admit. Had I done enough stress testing of my plan, I would have discovered mistake #3. I didn't because, on a level I simply didn't want to acknowledge, I knew what I was doing. I chose to close my eyes, cross my fingers, and hope life didn't throw me more than one or two curveballs at a time. Of course, it did. In fact, the past two years feels a little like the pitching machine at the batting cages gone berserk.
I will give myself credit for some smart moves. That refi will save me big time over my years of ownership, and I’ve got great equity now because of it. I never stopped saving for retirement. I've avoided carrying credit card debt. And here's what I'm most proud of - as soon as I heard that machine making some funny noises I woke up. I started paying attention. I called a timeout, called in the reinforcements (my own planner!) and got to work creating and implementing a new plan.
I'm sure I'll make some mistakes with this one too. I am human. And life is messy. As I move through it, I’m learning that it's not about achieving perfection, it's about doing the best we can. About getting more right than we get wrong. About being awake and intentional. And about being kind. To ourselves and each other.
Namaste dear friends,
photo lifted from Candy Chang