HOW LACKING DIRECTION LEADS TO POOR FINANCIAL CHOICES
‘What do you want to do with your life? What are your goals, dreams, hopes and ambitions?’
These are questions we are never really asked. Instead, we are often told what to do, or what we should be doing, based on someone else’s beliefs or dreams. I admit that these can be challenging and confronting questions to answer, but I had no idea of how few people were able to answer these questions with confidence and certainty.
As a financial planner, I help young Australians make smarter decisions with their money. Over the past three years of my career, I have seen the good, the bad and the ugly side of needing and having to deal with money. But I have noticed that there is one outstanding reason for young people making bad financial decisions. That is, for a lot of people they have no idea of what they really want to do with their lives. While this may not be true of all young Australians, I have found that people who are lacking direction in their lives are often the ones who are most in need of financial help.
As a part of my business’s service, every new potential client who comes to see me is asked to complete a short ‘About You Questionnaire’, much like the personal details form when you see a doctor. However, instead of your medical history, the questionnaire assesses your current financial position. All of this information is helpful to get an understanding of where the person is financially and to understand if we can add any value.
The last page of our questionnaire is the most important section, titled: ‘Objectives’. The question reads: ‘what are your personal, financial and lifestyle goals for the future?’ And then it asks you to fill in the gaps in time frames of Short, Medium and Long Term. Most people are able to complete the majority of the financial questions on the previous pages, but only a small number of people complete the Objectives questions. When we ask people why they did not complete this section, the common responses are:
“No one has ever asked me that question before.”
“I don’t know what I am doing next week, let alone what I am doing in three years’ time.”
“I get up go to work and come home, I don’t have a plan.”
And my favourite: “Why would you ask me about my goals, I thought I was here to talk about my money?”
The interesting part is that without answers to these questions and knowing what someone wants to do with their life, it becomes very difficult to point them in the right direction. The analogy that I use is that it is like trying to run a race without knowing where the finish line is. You can have the best coaches, you can be the fastest and the strongest but unless you know what your goal is, it is nearly impossible to hit your target.
It is important to remember that it doesn’t have to be someone else’s dream – you are able to choose whichever direction in life you want to take.
Now, because I am a financial planner I do have to add one small remark regarding the extreme that often comes with that last statement. Taking three years to figure out what you want, maxing out five different credit cards and blowing your money on a six-month bender through Europe, getting yourself into $20,000 worth of debt and using the excuse of ‘I am just discovering who I am’ isn’t recommended either. There is a happy medium in there.
Taking the time to discover what you really want to achieve and what will truly make you happy is by far the best piece of advice I have ever received and that I can give to others.
