Why Financial Planning Is More Personal Than Finance

Understanding Personal Finance Through Shared Experiences

My wife, Mika, and I recently took a survey that explored our attitudes toward money. The survey presented a series of statements, each requiring a response on a scale from -5 (“I strongly disagree”) to +5 (“I strongly agree”). Among the prompts were questions like, “If I work hard, I have the right to play hard,” “The more money I have in savings, the more secure I feel,” and “Financial success or failure has a lot to do with luck.” The exercise became particularly challenging when the questions focused on how we view money in relation to our children, such as whether they should have the same opportunities as their peers or be expected to cover some expenses once they earn their own money.

Insights from the Survey: Similarities and Differences

What we discovered was both enlightening and surprising. While Mika and I share many financial values, we also have distinct perspectives shaped by our unique life experiences. This revelation was fascinating, as we both found that we didn’t always respond the way we anticipated. These differences can be attributed to a concept known as intersectionality—the idea that our identities and life experiences intersect to form our worldviews. For instance, my background as a white male from a nuclear family contrasts with Mika’s experiences as a black woman raised in a single-parent household. Despite both sets of parents instilling values like faith, family, hard work, and frugality, our upbringings have distinctly influenced our financial attitudes. I work as a financial advisor, while Mika owns a healthy meal prep and catering company, reflecting how our different paths have shaped our financial perspectives.

The Role of Money Scripts in Financial Behavior

Our survey responses highlighted the powerful role of “money scripts”—unconscious beliefs about money formed during childhood that drive adult financial behaviors. These scripts, as described by Certified Financial Therapist Rick Kahler and his collaborators, influence how we react to financial situations. For example, whether one gives to a homeless person or not is often guided by deep-seated beliefs shaped by early life experiences. Recognizing these scripts is crucial, as it allows us to assess whether our financial actions align with our values and to revise these scripts if needed. This understanding emphasizes that personal finance extends beyond spreadsheets and is deeply intertwined with personal identity and history.

The Subjective Nature of Money and Financial Labels

Money holds different meanings for different people, and this subjectivity is evident in how individuals choose to manage and display their wealth. For instance, one friend might flaunt financial success through luxury purchases, while another with similar wealth prefers a more modest lifestyle. Both approaches can be generous in their own ways, illustrating that financial labels like “stingy” or “spendthrift” are oversimplifications that fail to capture the complexity of individual financial behaviors. These labels often hinder genuine understanding and should be approached with caution, recognizing the unique stories and values behind each person’s financial decisions.

The Importance of a Holistic Financial Plan

A great financial plan goes beyond mere numbers and savings strategies; it reflects the complete story of an individual or family. Effective financial planning considers not just investments, taxes, and retirement but also the personal aspirations and values that give money its meaning. For example, a friend who was the first in his family to attend college exemplifies both financial prudence and generosity, defying easy categorization. This approach highlights the need for financial plans that are deeply personal and purpose-driven, connecting assets to life goals and fostering a sense of fulfillment.

Reflections and Takeaways

Reflecting on the survey, Mika and I discovered that our responses to the statement about luck’s role in financial success were notably different. Mika disagreed, emphasizing hard work and self-reliance, while I acknowledged the influence of luck, having witnessed its impact on many successful individuals. This discrepancy underscores the importance of understanding the stories behind our financial beliefs. Financial planning is not about achieving a “right” answer but about aligning actions with personal values and experiences. By exploring these stories, especially within relationships, we gain not only financial clarity but also a deeper understanding of each other.

Conclusion: Embracing Personal Stories in Financial Planning

The takeaway from our survey experience is clear: financial planning is inherently personal and shaped by a lifetime of experiences. Whether it’s through money scripts, the subjective meaning of money, or the stories that define our financial attitudes, understanding these elements is key to creating meaningful and effective financial plans. So, what’s your story, and how does it influence your relationship with money? Embracing these narratives can lead to not just financial success but also to a richer understanding of ourselves and those we share our lives with.