“Do the best you can until you know better. Then when you know better, do better.” ~ Maya Angelou
There can be some unexpected emotions at play for those in the early stages of financial planning. Besides the normal ‘geez what DO I want my life to look like when I’m in retirement?’ confusion, people may find themselves grappling with more complex, uncomfortable feelings like guilt and shame.
Why do people feel guilt or shame? It may be because they feel like they should have ‘saved more by now’ or have a belief that ‘everyone is saving and planning better than I am’. It is important to remember that financial literacy is not “common sense” and figuring how and where to start building a plan can be overwhelming, even with professional guidance.
But here’s the thing. Establishing a financial plan is one of the most effective ways to replace guilty feelings toward money with a sense of control and empowerment. A recent study done in the U.S. shows a correlation between amount of savings (not necessarily income) and overall happiness; the more you have, the greater your sense of well-being. In other words, there is no point feeling guilty about what you have or haven’t done to date because it’s already done. So, let the guilt and shame go and commit to building a plan and taking steps forward.
You have likely heard the ‘rules of thumb’ when it comes to investing. “Save 10% of your income”, is one of the better known ‘rules’ and is often the one that can cause people the most anxiety. These ‘rules’ are actually more like ‘in ideal situations, it is best to’. For example, if saving 10% of your income is not possible for your lifestyle, then lower it. Even one per cent is better than zero. The earlier you can begin saving for your future, the more impact compound interest will have on your investments.
Selecting an experienced financial advisor will bring outside, unbiased insight into your current situation and determine the best road forward. A good financial advisor will work with you to move your plan towards where you want to be in the future. As life, circumstances, and demands on our resources change, a good advisor will review and modify your plan to keep you working towards your goals and ultimately, a sense of well-being.
Regardless of all the ‘rules’ of investing, they don’t apply equally to every investor and may not apply at all, in some cases. Your best bet is to work with a financial advisor to build your long-term plan, work on achieving it, and modify as needed.
Be kind to yourself. Financial planning reality is different for everyone and taking any steps in the right direction is a move forward.
Connect with us to learn how you can learn how to start today and ease your mind.
Ally Bank survey. “New Ally Bank Survey Links Money to Happiness”