The Budget Boot Camp is coming to a close this week, although for me, if felt like it really ended a while ago: Natasha has not been communicating with me for about a couple of weeks — unfortunately, an all too common trend in our relationship.
What have I learned over this time? I did learn something about myself, but for the most part, many of my fundamental beliefs about the financial planning process have been reinforced. That did not surprise me. However, I also came to the realization that the damage done by the free-spending culture fueled by the "easily available credit" era may be much worse than I feared — and could seriously set our country back if something drastic is not done.
Helping people with their financial planning needs is not only a profession for me – it borders on a "calling." I know I get emotionally connected with my clients and their concerns, and this connection has helped me be quite successful in helping my clients. The first step in the process is always an introductory meeting to make sure we are a good fit for each other. Assuming we continue, it generally means that my client also buys into the process. If not, we go our separate ways. That was not an option for the boot camp, but I also did not anticipate a problem when I first met Natasha.
For whatever reason, this connection did not seem to happen between Natasha and me. Virtually from the outset, it seemed to be a continuous struggle to engage her in the process. I was really beating myself up over this — even losing sleep. It was nearly 2 months in before I received basic information necessary to put the bones of a plan together — and then only after I threatened to end the process. We had a brief, but rewarding, spurt of productivity around that time, but it seemed to wane as I tried to push Natasha through the implementation phase. I have no idea if Natasha will be successful in reaching her goals, but I’m glad I was not forced to pull out sooner.
As frustrating as this experience has been for me, it helped me come to terms with the fact that I DO become emotionally involved, and that is ok — even if sometimes it’s not a positive experience. That is the way I am, and I’m OK with it.
On a big picture level, the basic truth that financial planning is a process, not a one-time event, is reaffirmed for me. There is no "silver bullet" solution, at least not a sustainable one, to striving towards financial security or independence. Ultimately, we must spend less than we make, and invest our savings wisely. But even the soundest investment plan is useless unless you actually have funds to apply it to. We may not always realize it, or even want to accept it, but the only thing that is truly within our control is how much we save.
And therein lies perhaps the greatest challenge because many Americans have forgotten what it takes to live within our means. Even worse, I fear many more have not even learned this skill in the first place.
I remember when my youngest guy was about 6, and we were driving along in our 5-year old minivan with 100k + miles on it. He says to me…"Daddy, that guy in front of us is rich." He is my outspoken one, and he rarely comes up with statements that shock me. But he got me on this one, so I asked why he thought that. "Because he’s driving a XXX (enter 3-letter German luxury car brand)." I kid you not. Somehow, somewhere along the line, a 6-year old was influenced into believing that: a) there are "rich" people out there, and b) that they drive a certain type of car. It was a great learning moment so I immediately began teaching reality versus perception. As a financial planner this is nothing special. But I wondered, without the benefit of having a financial planner as a father, what chance do kids have?
I believe we have to teach our own children basic values, and not rely on our school system to do so. Many parents have the ability to teach their kids what they have learned about right from wrong (whether they choose to is another story), but how many younger parents have learned basic financial planning skills? As ridiculous as it may sound, maybe our middle school curriculum (assuming that’s not already too late) should include at least a semester of basic financial planning. And maybe a refresher in high school — right before our kids go off to college and are tempted by the free t-shirt offer from the credit card company outside the entrance to the big football or basketball game…