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We live in a very stressful world, yet even with all our worries, money is the number one stressor , (according to surveys by the American Psychological Association). Money outranks all other concerns such as the economy, work, family and health.
The fact that money is so stressful translates directly into many people avoiding the topic whenever possible.
This isn’t a good strategy, however as there is substantial research tracing a direct line between poor communication about money and divorce.
Dr. Dan Ariely, a neuroscience professor at Duke reminds us in the video clip below that no evolutionary part of our brain is assigned to financial decision making. That may help explain at least part of the problem. We aren’t wired to make financial decisions, ergo , the whole process is stressful.
We often show the clip above in client meetings to convey the message that all of us are human and almost everyone has made poor financial choices. The key is to acknowledge the decisions, discuss why they were made and learn from the bad outcomes.
Money is a fungible item that helps you accomplish something that you value. Money is not an end in itself. Piling up money has no point, no purpose. Everyone has different motivations that reflect both their desires as well as their apprehensions about money. Moreover, all of us have different money histories that impact how we think about money.
As a fiduciary advisor, we have an opportunity to witness a wide range of emotions about money. Since our interests are aligned with our clients, we often are in a unique position to provide counsel and coaching.