MAKING CENTS FINANCIAL ADVICE COLUMN: 'I just hate talking about money'

I’d rather be retching on the floor of a gym after a workout than have to deal with my finances.

That was the comment made to me recently by a gentleman who made contact looking for help with his finances.

Thankfully, he came to the conclusion, very reluctantly I might add, that he couldn’t ignore them for much longer, no matter how uncomfortable they made him feel.

His difficulty and I guess it was mine as well, was that when we sat down to chat, he didn’t know what output he wanted delivered from our engagement.

It looked like his dislike for dealing with all things money, was creating some type of blockage in his mind.

When I asked him what he’d like to achieve from a financial perspective, he didn’t have any answers. So, we were both staring at a blank piece of paper for a while before he broke the silence, by asking me what other people wanted which was not what I wanted to hear.

It’s easy to just follow what everyone else wants. But when it comes to setting goals, there’s no standard list. Not everyone’s measure of what’s great is the same.

You must come up with your own set of goals based on what you value most and what you want to achieve most.

You must know that the decisions you’re making or are about to make are best for you and know that they’re going to shape your life now and influence your future. Just following what others do, and what others suggest may not be in your best interest. Your path is unique, and it’s yours to follow, and I’d say don’t follow anyone else’s.

And I come across people like this gentleman all the time.

In fairness it can be difficult trying to figure out what you want in 5 months or 5 years, not to mind plotting out something that could be 30 or 40 years away.

You know you’re likely to want something to happen in the future, but you’re not quite sure what they are right now.

You might want to retire at 55, you might want to live abroad, you might want to work in a completely different industry, you might be mired in debt and your goal is to get out it.

There could be any number of reasons which may not be clear right now.

But that’s not to say you should ignore trying to figure what they could be either, or at least giving it some thought.

Anyway, back to my friend who had no conscious goals but I knew there were some unconscious ones just waiting to come out. And I told him about a really good tip that was going to help uncover some goals that might have real meaning to him, and it’s simply asking WHY to a question asked five times.

This technique was originally developed by Sakichi Toyota of the Toyota Motor Corporation who used it in order, to help diagnose the root cause of engineering problems.

So, for example if you begin with why do you want to be mortgage free, you’d follow up the answer given by a why, and after doing this three or four or five times, you might end up with the real reason why someone wants that to happen.

And it could go back to what happened to a parent, or it could be just that you hate banks and you want them to get as little interest from you as possible, or you want to set up your own business at 50 and not having a mortgage repayment would allow you to pursue this passion of yours.

Just saying, I want to be mortgage free and leaving it at that is no good.

Because it lacks depth and meaning.

But if you say, I want to be mortgage free because ……………….and the reason you give has meaning for you, now you’re talking. That’s a real goal and one you’re much more likely to achieve.

And if you don’t have any good reason to pay off your mortgage early, that’s fine as well, leave it alone and find something that has meaning.

The gentleman I encountered didn’t have a good reason to pay off his mortgage early, but he did when it came to setting up a savings plan for his three-year-old twins.

He wanted to build up a fund that would help put them through college, if that’s where they wanted to go when they were older.

And this is a goal most parents have.

But it had more meaning to him because after I kept asking him why, he revealed he never had the opportunity to go to college because his parents couldn’t afford the cost. And he ended up in a job he didn’t dislike but he would have preferred to do something else, and perhaps he would have been able to so, if he went to college.

And he didn’t want that to happen to his twins and that’s the reason behind goal number one we set, and it was going to take priority over every other one.

We uncovered goal number two, which was to pay off what short term debt he had as fast as possible.

What was the motivation behind this one?

If he and his wife accomplished this, she could work 4 days per week rather than 5.

They had spoken about it before and his wife had mentioned in passing how great it would be. He said she was ill of late and he thought having one day at home, might help her but he thought it was beyond them from a cash flow perspective.

But when we ran the numbers the blockage that was preventing them for making this a reality were their loan repayments.

If they paid them off sooner, it would fast forward this goal of theirs.

And it wasn’t going to be easy, but he now had a number that he had to overpay each month and if they followed through with it, in 13 months their debt would be gone and his wife could apply for a 4-day week. And if successful and she thinks she would be, they’d see no negative impact from a financial perspective.

After about an hour, we both thought we’d made really good progress and we decided to leave it at that for the time being.

He came in with no goals and left with two really good ones. And they were always there, he just needed help getting them out that’s all.

After we finished, I asked how him how he thought things went?

He wasn’t vomiting, he wasn’t out of breath, and he admitted it was easier than he thought.

He thought I was going to tell him he was a disaster and way behind everyone else and perhaps that’s why he was avoiding looking at his finances, but he wasn’t a disaster at all.

He said it was like a weight had been lifted from him and he thinks he metaphorically lost more weight in our 50 min chat than he had done with two months working out in the gym, which was great to hear.

I’m hoping that by telling you this story, that if you feel you’re just like him and you don’t need financial advice because nothing comes to mind about what you’d like to achieve from a financial perspective, or you just don’t like dealing with your finances, I’d say consider reaching out and speaking with a financial adviser, you might be surprised what they or you will uncover.

Liam Croke is MD of Harmonics Financial Ltd, based in Plassey. He can be contacted at liam@harmonics.ie or www.harmonics.ie