Category Archives: Resources

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The 6 Stages to Successfully Changing Your Financial Behavior

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Have you noticed how some salespeople are relentless in trying to overcome your objections to buying? Most of them are taught that the more objections you have the more interested you are in whatever they are selling. I know how this “dance” works because I have taught and coached hundreds of sales professionals over the years. It wasn’t until I read S.P.I.N. Selling
by Neil Rackham about 15 years ago that I understood that to be a successful salesperson/Financial Advisor you have to understand the psychology of the buying/decision making process. Rackam uncovered the truth about buyers responding better to their salesperson/advisor when they asked questions that uncovered problems.

Uncovering problems leads the buyer to acknowledge that there is a problem in the first place that needs to be addressed (one they may not believe exists). Even after addressing all of your objections you still might have resistance to moving forward and changing your “buying” behavior or in this case your “financial” behavior.

A Financial Advisor can sit with you and address all of your concerns but you still might walk away dissatisfied. Why? The answer is because you haven’t necessarily come to terms with the fact that there is a problem. You haven’t worked through the natural process to overcome your resistance to making changes because from where you sit you aren’t convinced yet that there is a problem.

In the book Facilitating Financial Health the authors Rick Kahler and Dr. Brad Koontz makes the point that there are six stages associated with overcoming our resistance to change. They sound a little clinical but see if you see yourself in any of these stages.

  1. Pre-Contemplation – This is where people don’t realize that they have a problem. For example it could be overspending or a lack of understanding as to how much money it will take to retire at a reasonable age. You have heard the term, ignorance is bliss”. That fits into this stage.
  2. Contemplation – This is where you finally realize that you have a financial problem and you are at least considering making a change within the next year. You might still feel ambivalent about that change but at least you have broken through the barrier to understanding the need for change.
  3. Preparation – Here your time frame for action has shortened to 1-3 months. You know that you need to take action and you are ready to start putting a plan together. You are willing to put that budget together and make changes to your spending and saving habits.
  4. Action – Now you are ready to implement those plans that you started in stage 3. You work with your financial planner to execute on your plan. You may still have some concerns that need to be addressed but you are ready to work on overcoming them compared to where you were in Stages 1 and 2.
  5. Maintenance – The changes you have made are now part of your life style. Congratulations! Sure you will have some setbacks and relapses but your mind is ready to accept the changes as a beneficial part of your life now. Here you can automate many of your financial transactions such as contributing to your 401(k), paying bills, etc. which will minimize those relapses.
  6. Termination – In this stage you have made permanent changes with little chance of reverting to old bad financial behavior. You and your planner meet periodically to monitor your plan and make asset allocation adjustments. You have a true partnership with your planner. You may even refer your planner to your friends and family as a result of your satisfaction with the partnership that you have developed.

So what can we learn from this discussion of resistance? First, resistance is a normal part of the behavior change process. Second, if you try to shortcut the stages you probably won’t be successful in overcoming the resistance. In fact if you don’t have some objections to overcome when you meet with a financial advisor it probably means you are not connecting with him/her at an emotional level. The days of having a financial advisor pat you on the knee and say, “there, there, I will take care of everything” are over just as they are in the medical profession.

The most successful financial advisor/client relationships from my experience are true “partnerships”. You need to connect with your advisor so I recommend that you not settle for anything less. It’s normal to resist changes to your financial behavior. Don’t beat yourself up. Give yourself time to work through these stages. When you are ready then find an advisor you can truly partner with; someone who understands that it will take time to get you on track to a successful financial journey. Plan well. Live better.

Click here if you want to explore my financial coaching service. I also offer free 30 minute Clarity Session as well.


Time Out!
What stage of overcoming resistance to changes in your financial life are you in? You can leave a comment here.

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Procrastination Nation – Declare Your Independence

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Yes, it is election season, as if anyone needed to remind you of that. I’m not going to waste valuable space commenting on the election. Instead I will use this time to comment on another season that is upon us. I’m referring to procrastination season. You see, I have been in the financial services industry for many years, helping people like you achieve theirr financial goals. I have also helped financial advisors overcome the effects of procrastination season. When it comes to procrastinating about our financial goals, we have truly become a “procrastination nation”.

What goals did you have for this year as it relates to your financial wellbeing? Perhaps you are viewing retirement out on the horizon in some fashion; perhaps you will stop working altogether or maybe work part time. Maybe you had plans to become better at budgeting your money this year. Those are certainly worthy ideals and I would hate to have you fall prey to procrastination.

Because the reality is this, “time waits for no one and it won’t wait for me”, as the Rolling Stones song of the same name reminds us. In other words, your retirement will still be here whether you procrastinate or not. The problem is you will be closer to the deadline and no better off. You still need to get better at budgeting, whether you start now or wait until “next year” or until “after the election” or “until the economy gets better” or whatever procrastination reason you have. Procrastination only serves to increase the stress and urgency. It’s effects are short-lived soon to be outdone by reality.

So let’s get real. Your financial goals are important and waiting doesn’t make sense. As a CERTIFIED FINANIAL PLANNER™ I can tell you that there are few reasons to put off your financial goals. The ones I mentioned above are not in that category. Here are 4 ways to break out of “Procrastination Nation” and declare your financial independence:

  1. Admit that you are in fact procrastinating and ask yourself, why? If it’s because the task seems unpleasant then look for help. For example, if you are struggling with the idea of budgeting, check out my Budgeting That Makes Sense course. If you heard that it’s a bad time to be in the market or that the market will crash after the election, speak with a trusted adviser and get informed. Regardless of what the market does before or after the election you still need to do something about your retirement.
  2. Work with a financial advisor or coach. When you have a medical issue you see a specialist. When you have a financial challenge, you should do the same thing, see an expert. Check out my blog post on how to find a financial advisor. You will save yourself a lot of time and heartburn. You can also get more information on my coaching service here.
  3. Break down your goal into manageable chunks. Retirement may seem overwhelming. Break it down into questions that you need answers to such as how am I doing with my 401(k) or other tax deferred plan? How can I find out what to do with Social Security? What about healthcare expenses in retirement? How much do I need to save for retirement? Get get a copy of my Guide to Getting Started When You Are Starting Late. Click on the link on the right side of my blog. Just remember, you don’t want to do all of this planning on your own.
  4. Get started today. That’s right, do something today, take a step, even if it’s making a phone call or searching for a financial advisor to work with. As the saying goes, a journey of a thousand miles begins with a single step. Leave a comment if you need ideas on how to get started.

Don’t feel that you have to remain a citizen of Procrastination Nation. Get started on your financial goals today. There are too many Americans sitting on the sideline in what Dr, Seuss called ‘The Waiting Place”. Ask yourself, what am I waiting for? Do I need to wait or is it stress relieving versus goal achieving to wait? I look forward to celebrating your financial independence day!

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Budgeting Smudgeting, Why Do I Need a Budget?

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I know, I know. Just the thought of having to put a budget together reminds a lot of people of going to the dentist when they haven’t been for a few years. It’s that fear of, “What am I going to find out? And, “Whatever it is, it’s going to be painful.” Before you run off to another blog site let’s try to come to terms with both the fear of budgeting and the reasons why you absolutely have to go through this process. And…it might actually be fun! Yes, I really did use the word fun in the same paragraph as “dentist” and “budgeting”. Hear me out on this.

Why is budgeting so painful?

I believe it’s because many of us know we have “leaky” behavior so it’s a matter of “the truth hurts”. Leaky behavior is what I call those expenses that may not seem like a big deal but over time they add up to thousands of dollars. Money that could help you reach your retirement savings goal; things like daily Starbuck’s coffee runs, eating out every weekend, weekly shoe shines, having a yard guy (or gal). You get the idea. At the risk of being called the “fun police” let me state that you don’t have to automatically cut out all of those enjoyable expenses but when it comes to finding extra dollars to invest for your retirement those are areas we want to look at first. That’s why it’s important to know what they are in the first place. And that is where the pain comes into play. Many people upon learning of the amount they spend on these various behaviors often bring their hand to their forehead and cringe. There’s the pain. We are often resolved to our income and know it well but we “hope” there is enough money at the end of the month instead of vice versa.

How Can a Budget Help?

First, you start form a position of strength. You take control of the monthly expenses instead of the expenses taking control of you. In other words you have a game plan. Imagine if your favorite sports team started the game with no real plan, just a vague idea of how they hoped the game would go. They know they want to score more point than the other team and they have a pretty good feel for how they have done it in the past so off they go. What do you think the chances of victory would be? Well, that’s how many people treat their personal finances. They hope their income will cover their expenses. Your budget is the foundation of your game plan.

How Does the Budgeting Process Work?

It begins with gathering the data that makes up your financial history. Next, you use this information to do a cash flow analysis. That’s taking a look at your income versus your outgo. You will calculate what’s called your net cash flow. That will tell you whether cash is coming in faster than it’s going out…or vice versa. Then we need to know your net worth. In simple terms, your net worth is the sum of everything you currently own minus the sum of everything you currently owe. Why is this important? It gives us a snapshot of where you are today…financially. This is the foundation of our game plan. It tells us form where we are starting. Just like a team at the beginning of the season. They need to know what they have to work with and go from there.

Once we have the snapshot of you financial situation, then we start looking at your money goals including retirement, college funding, social security, healthcare just to name a few. Of course not all of these may be on your list of goals depending where you are in life…at least not yet. We have to set priorities and timelines.

Budgeting is not a one-time deal or a once a year deal like paying taxes. Yes, we have to revisit that bad boy on a regular basis. So like anything else that can be a chore to do we have to make it as enjoyable as possible. Thanks to technology even budgeting can be fun. Yes, I used that “fun” word again. Well, even if it isn’t fun it can become bearable.

Check out my Budgeting That Makes $ense course. Click here to Learn More and check it out!

Check out our Budget Tracker tool here. I know that you will find it helpful. You can also get a FREE copy of our Net Worth Calculator here.

Question: How do you feel about the idea of building a personal budget? You can leave a comment by clicking here

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3 Ways Good Habits Can Increase Your Retirement Income

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Over the past several months I have read two excellent books about habits and how they influence our lives in some good and some not so good ways. If you get a chance, please pick up a copy of The Power of Habit by Charles Duhigg and/or Atomic Habits by James Clear. Both books offer some practical advice on how habits can build us up as well as serve as roadblocks to achieving our goal of becoming the best version of ourselves. In this post, I offer three ways that habits can benefit you in building your retirement nest egg.

  1. Start small. As James Clear points out, “habits are the compound interest of self-improvement.” If you have a big goal like saving $100,000 in your retirement account you won’t necessarily start by saving $1,000 every week if you haven’t saved anything to date. You start by looking at why you haven’t saved anything. Perhaps you are spending $50 a week on Amazon.com. The things you buy are not really necessary so you agree that every time you get the impulse to buy on Amazon you will put $25 in your retirement account. Once you feel good about that new habit you might increase it to $50 then $100, etc. You are using the same trigger that used to cause you to spend money on Amazon and you have replaced it with a deposit to your retirement account.
  2. Focus on what you want to become. In the example above, instead of focusing on the $100,000 focus on who you want to become – a savvy retirement saver who builds a comfortable nest egg to provide income for life. You can identify with that transformation versus a dollar amount. It is like losing weight. Instead of focusing on the pounds you want to lose, focus on the vision of the healthier version of yourself who will enjoy life more once you lose the weight you want to lose.
  3. Focus on your system instead of goals. If you want to save more money for retirement then focus on your system for getting there instead of the goal itself. Charles Duhigg in The Power of Habit speaks of the cycle of a habit. There is a “cue” then a “routine” then a “reward”. If you have a cue that leads to a bad habit yet the reward is positive then perhaps you can keep the cue and the reward just replace the routine. That is what we did in the example above. We replaced the shopping on Amazon with putting money in your retirement account. That is a system that works, in this example. What cues do you have that lead to bad spending habits? It could be boredom, hunger, a need to be social. How can you replace the unproductive behavior with a better routine? Maybe it’s paying with cash when you get an impulse to buy something on credit that you really don’t need.

Habits can be extremely helpful on the road to financial peace of mind. As the authors Cleary and Duhigg explain, habits need to help us become a better version of ourselves. In other words, they need to become part of our identity. Good habits shape our identity which is why good routines are critical to success in forming good habits. Habits can change our beliefs about ourselves. Pick one routine this week that you will work on changing that will lead to better spending habits.