Great Conversations

Last weekend I attended the national conference for the Financial Planning Association (FPA) in Denver. Despite over 15 years in the financial industry, I’d never attended this conference, so I didn’t know what to expect. I went in with the preconceived idea of people walking around with calculators discussing obscure financial concepts. Instead I was surprised to find an amazing group of people engaged in meaningful conversations about the role of money in our lives and how to help people deal with the complexity.

I walked away from the conference struck by the potential impact of meaningful conversations on your behavior. We just don’t often have very many of them about money. Most of us have grown up with the idea that we don’t talk about money. Money, politics, and religion are subjects that we traditionally avoid for the sake of polite dialogue.

That seems to be changing.

Everywhere I turn people are having conversations about money. People are asking questions that they’ve never asked before and thinking about assumptions they’ve long held as absolutes. These questions are about broad issues like trust, happiness, and the definition of “enough” and specific issues like the definition of risk and fundamentals assumptions about the stock market.

From the perspective of a financial planner these are questions we should’ve been asking all along. There is a growing recognition among real financial planners that great conversations about money are really great conversations about life. This recognition includes acknowledging that the traditional approach of the financial services industries leads to poor decision-making. Saving, budgeting, investing, tax planning, insurance, and estate planning, are all inter-related and the driving force behind them all is your life, your goals, and your values.

I left the FPA conference with a renewed belief that one of the most important things I can do when faced with a financial decision is to find someone I trust: a friend, a spouse, or a paid professional and have a conversation about it. I believe the same applies for you. It’s time to get clear about why money’s important to you. I’ve found asking a few simple questions you may have never asked can help clarify these issues:

• What’s role does money play in your life?
• Three years from now, what will you consider financial success?
• What money mistakes have you made in the past that you want to avoid in the future?

Simple questions are often the easiest way to deal with the complexity that money can introduce in our lives. Your goal is to get focused on what matters to you, which isn’t the same thing as finding the best investment or best life insurance. You won’t have all the answers you need, but starting with these three questions can help you clarify what is “best” for you.

This article appeared originally in The Behavior Gap Newsletter October 15, 2010.