Finding Your Money Guru
Where did you learn about money? Most of us learned from one of several ways: parents, friends, school, Internet, from financial professionals or a combination of all of them. Where ever you learned, you most likely have certain attitudes toward it. If your relationship with money is difficult, it’s never too late to change your attitude and expand your skill set with a money mentor.
We look to mentors in our business life, why not for our financial life? A money mentor can show you what to do, or, just as importantly, what not to do when it comes to managing your cash and credit. Let’s talk about the ways you learned about money and how you can find your mentor.
Parents impart the good, the bad, and the ugly of what forms our initial relationship with money.
When Joe got his first paycheck as a teen working at a basketball camp, his father, a financial advisor told him to put half of his money in an IRA. He ingrained in his children that they should be prudent with what we had, not spend excessively, and plan for their future wisely.
Now a financial adviser himself, Joe credits his monetary know-how to his dad. At only 41, having always maxed-out his 401(k) and IRA, he has already built up a nice retirement nest egg.
Karen remembers the day when she was about eleven and her parents and brought home a cake to celebrate paying off their mortgage. Her parents prepared her for financial independence by talking about lifestyle choices, investing and debt throughout her childhood. When she got her first credit card in college, her parents cautioned her so strongly against debt that she always paid off her card in full each month.
The result was a stellar credit score, high enough that Karen and qualified for a mortgage when she was just a couple of years out of college. But the biggest benefit she got out of her parents’ money mentorship was a lack of fear.
Then there is Chris, who learned a lot about money from her parents. But she’s had to work hard to unlearn most of it. Her parents were not good with money. It was always feast or famine. When times were good vacations and new clothes flowed. There was never talk of saving for the future. The good times were expected to last forever. Her parents worked hard for their money and felt they deserved the “good life”. When the feast years would slow down, her parents would rack up credit card debt to pay for their day-to-day expenditures then spend the next few years trying to pay it off.
Fortunately Chris married into a family that lives by their budget. Because of their budgeting skills, Chris and her husband were able to pay off $60,000 in student loans in only eight years. Every year they look at their progress, then plan for the year ahead. Because money was such a source of stress in her early years, she sometimes brings tension to these meetings.
Because of the lessons learned by each set of parents, she is focused on teaching positive ideas about money to her children. Her 4-year-old daughter is just starting to understand money. She’s determined not to teach her daughter the painful money lessons she herself learned as a child — that prosperity is fickle and money a source of anxiety.
Just talking openly about money can help eliminate some of the fear that leads to poor decisions. If your parents or grandparents are not good money mentors, look to your in-law or friends parents for guidance.
But if you don’t have any parental figures to mentor you, here are some other options.
We’ve all got one: the friend who was the first to save up for a home, who’s been urging you forever to build an emergency fund. It’s the buddy who always seems to have his money act together—and he could be a good go-to source for financial intel.
Friends can be powerful mentors because they’re familiar with your history, goals and intentions. They usually know your relationship with money better than you do.
Before you ask your buddy to be your money guru, make sure that he’s as qualified as he comes across. Ask him if he minds you asking some questions about the techniques he uses to handle money.
If he can’t give you direct answers, then he may not be as savvy as you thought. But if you get smart and thoughtful responses, suggest once-a-month meeting or phone call specifically to get your friend’s thoughts on your financial progress for the next four to six months to help you get on track.
Acknowledge up front that the mentorship might change the dynamic of your friendship, so agree to nip any weirdness in the bud. Talk about what would happen if you missed a call or didn’t follow the person’s advice to make sure you’re on the same page. Agree that, above all, preserving the friendship comes first.
In many ways, asking a family member to be your money mentor just makes sense. Presumably, they are already concerned with your long-term growth and development, so guiding you in this realm isn’t a far reach.
My mother, who finished college just after the Depression, was hugely influential in how I handle my finances. She instilled It’s not what you make that matters, but what you save. When I got my first job in high school, she took me to open up a bank account and, at her instance, I funneled 20% of what I’d earned into savings.
Present a potential family-member mentor with a specific issue you’re facing in order to gauge what she’d be like as a coach. See if she listens, asks questions, and discloses how she’s dealt with a similar problem in the past. These are signs of a top-notch potential mentor.
A week or two later, fill your relative in on what happened when you took her advice. Then tell her you’d love to hear her input on another situation, which lets the mentorship progress organically. Eventually, ask if it would be all right if you heard her take on a money-related decision or opportunity from time to time.
There is, however, one downside to having a mentor who’s a family member: the person who may have once changed your diapers might feel as if you’re challenging her authority if you decide not to take the advice.
Never say that you will do something that you have no intention of doing—that will only create family discord. Instead, explain up-front that you see the point, but you’re still inclined to go in a different direction—and you hope your decision won’t impact the relationship.
Earnings Power Pro
One of the biggest things affecting your finances is, of course, your income. So why not get a mentor who can tip you off to some strategic income-boosting moves?
Different from your typical career mentor, an earnings power mentor can help you focus on things like negotiating salaries or shooting for promotions that will pad your paycheck in the long run.
Preferably, this would be a professional contact with whom you have a good relationship, like a former manager, a former coworker who’s more senior than you, a college alumnus in the same field, or an HR professional with whom you’re friendly.
Send your would-be mentor an e-mail outlining a decision you’re grappling with and ask if he’d be willing to discuss it. For example, it could be something like: “I’m thinking about asking for a raise in my upcoming review, and since you’re so knowledgeable about how these things work, I’d love to get your take on how to ask for more.”
If you come away from that conversation with a good game plan, suggest a mentorship setup by clearly stating which professional hurdles you’re trying to overcome.
Maybe you’re hoping to increase your earnings, or you found out you’re underpaid. Then mention how valuable his feedback was to you, and ask if you could check in once a quarter to strategize getting your salary on track.
Formal Cash Coach
Not all money mentors have to be people in your personal or social circles. There are many community nonprofits that offer up trained volunteers, such as local business owners, to work one-on-one with people who want to improve their financial situation.
These types of mentorships tend to be very organized, with a structured curriculum of milestones you’re working toward. This means there’s a measurable way to assess whether the strategies are working for you.
To find someone in your area, google the name of your state, plus the words “nonprofit money coach.”
Once you’ve found an organization that looks promising, don’t blindly accept the first counselor they assign—you want to weed out someone who may not be a good fit, or who may not take the mentorship seriously.
Explain that you’d like to make sure that you and your mentor communicate in the same way. Then interview the potential coaches about their prior experience with investing and money, their coaching style, and their expectations for the relationship.
Establish a monthly meeting, along with the option for real-time feedback—perhaps being able to call or text if you’re, say, tempted to spend retirement contributions on a new tablet. This allows you to be in touch just enough to stay motivated, without feeling like you’re being micromanaged.
Keep a running checklist of goals you hope to accomplish, as well as things you’ve already achieved together, and go through the list at the start of your meetings to see where you stand on each item. This helps remind you of previous wins, and holds you accountable to future objectives.
Whether it’s a bigwig on cable news or the author of your favorite money book, there’s no shortage of talking heads you could look up to as virtual mentors.
Although it’s highly unlikely that you’ll be able to set up one-on-one advice sessions—at least without shelling out a pretty penny—you can still incorporate their words of wisdom into your life on a regular basis.
It’s always good to learn what language effective and successful people are using about money. Reading great content, listening to podcasts, etc., can provide excellent structure for good money messaging.
You can build that structure by ritualizing “alone” time with your money pundit. Perhaps you read that person’s blog over breakfast every Monday morning, or listen to the virtual mentor’s podcast during your evening commute.
Also, follow your money celeb on Twitter, Facebook and Instagram for motivational tidbits throughout the day.
And when absorbing the advice, try to focus on what the person’s big-picture money mantra is. Rather than simply using their tactics to handle a specific issue, adopt their general worldview with regard to finances. Listen to the language they use, and learn how they approach wealth-building at the very root.
That deep-seated fiscal understanding could help guide your future monetary moves. After all, that’s the ultimate aim of money mentors: getting to the point where you start to absorb their wisdom and confidence through osmosis—and can one day pass along some sage insights as a mentor yourself.
Until next week,
February 26, 2018
Join me every Wednesday on my podcast “Unlocking the Secret to Living Rich”.
If you have questions or comments you can contact me at my email firstname.lastname@example.org or find me on Facebook, Twitter or Instagram @cindybbrown777
Who is Cindy B. Brown? Cindy is a CPA, MBA, CFO, and board member of public and private companies, business consultant, entrepreneur coach and a foremost expert in the field of business mastery. Cindy’s purpose is to motivate, educate and inspire people to live their richest life. She is the host of “Unlocking the Secret to Living Rich”.