The Risk Tolerance Continuum

When you are making a financial decision, do you intentionally weigh the potential risks and rewards?  Is weighing that balance more of a rational or emotional process for you? In other words, do you tend to rely more on facts or on feelings?

For example, when Karla got a promotion at the architectural firm where she is employed, she gave serious consideration to buying a new car.  She thought about the practical and emotional rewards of having a new car such as:  1) having a dependable means of transportation, 2) getting better gas mileage, 3) portraying a successful image to her clients, and 4) experiencing the pride and pleasure that comes with owning a new car (there’s nothing like that new car smell!). (more…)

Financial Relationships

Our financial relationships involve connections with others that affect our financial well-being and life satisfaction.  Without a doubt, the complex circumstances and evolving dynamics of each relationship can have a profound influence (consciously and subconsciously) on the big and little decisions we make on a daily basis.

Nowhere is the influence of emotions on financial behavior more clearly illustrated than in family relationships.  In particular the needs and wants of our children and our parents can weigh heavy on our hearts and minds and undermine our objectivity.  The following questions will help you to reflect on and assess your financial responsibilities across generations: (more…)

Review Your Financial Biography

Our attitudes and beliefs about money have their roots in value-laden messages that we have picked up along life’s journey.  These money messages are not only clothed in the words of others, but in their behaviors as well.

The authors of Wired for Wealth (Brad Klontz, Rick Kahler, and Ted Klontz) write that all of our financial actions—or inactions—make perfect sense when we understand what “money scripts” drive those behaviors.

“Money scripts are the thoughts, beliefs, and attitudes that we hold about money.  Many of our associations are hidden deeply in the unconscious mind.” (more…)

Values Guided Financial Planning

Financial Life Planning is a holistic process that will first help you to clarify your values and then guide you in defining and designing your unique version of the “rich life.”

When thinking about values, we often think in terms of principles or standards we consider important such as honesty, loyalty, or altruism.  We also tend to think of values in terms of what we hold most dear such as family and good health.

Our values are also those intangibles that keep us motivated.  Motivators vary from person to person, but examples include wealth, recognition, achievement, intelligence, creativity, challenge, adventure, harmony, and so on. (more…)

Getting Unboxed

In The Three Boxes of Life: And How to Get Out of Them, author Richard Bolles described the three periods of life as (1) youth, (2) adulthood, and (3) old age.  He observed that life in each stage seems to be conducted without much consciousness or preparation for life in the next stage.

High school and college graduates almost universally express that they learned very little in school to help them find jobs or to be successful in their careers.  Likewise, workers approaching the end of their careers realize they are ill prepared for life in retirement.  Thus, as Bolles explained, “these three periods—in their isolation from one another—end up looking (or feeling) like three boxes.” (more…)

The Root of Money Scripts

For many of us, managing our finances and building economic security is a nagging concern.  We know we should be making greater strides in taking control of our money matters, but nothing changes.  We become confused and discouraged about our inability to make positive change in our financial lives.

However, the authors of Wired for Wealth (Brad Klontz, Rick Kahler, and Ted Klontz) say that all of our financial actions—or inactions—make perfect sense when we understand what “money scripts” drive those behaviors.  They write:

“Money scripts are the thoughts, beliefs, and attitudes that we hold about money.  Many of our associations are hidden deeply in the unconscious mind.” (more…)