Sneak Peek: The Six Phases of Your Financial Journey
How have you changed when it comes to your money management skills, your knowledge about money, and your relationship with money? Did you have the same money style ten years ago as you do today? Do you anticipate that you’ll have the same money personality ten years from now as you do today?
The Curse of Knowledge
Once you know something, it’s hard to remember what life was like when you didn’t know. Elizabeth Newton researched this concept in a 1990 study that she conducted at Stanford University. In it, she illustrated the phrase the “curse of knowledge.” In her study, a “tapper” tapped a tune on a table … and overestimated the likelihood of a listener being able to identify the tapped melody. The “tapper” knew the song and could vividly hear the melody in their own head while the listener merely heard random taps. This curse of knowledge shows that, once something is in our mind, it’s hard to remember what life was like before.
With this same theory in mind, it’s clear that people take their current relationship with money for granted. It’s hard to remember what life was like before, and it’s hard to imagine that you’ll be different many years from now. There’s a high chance that you’ve come a long way in your own relationship with money, so let’s reflect on that.
You can sign into the FPFoCo Academy to learn about “The Six Phases of Your Financial Journey.” In our experience helping clients, we identified six types of phases people experience while on their financial journeys:
1. Ignorance Is Bliss
2. Reality Sinks In
3. Winging It With Basic Knowledge
4. Getting Your Financial House In Order
5. Money Becomes a Tool
6. Money Reflects Your Legacy
In this sneak peek of our latest personal finance module, we’ll focus on the phase that likely brought you to Financial Planning Fort Collins: getting your financial house in order, which is often spurred by a critical money moment.
Getting Your Financial House In Order
A common thought in this phase is, “I should start getting good with money.”
People feel motivated to get organized, learn more about personal finances, and want to focus on creating a foundation for their lives instead of being reactive about their money.
Your relationship with money evolves, and you see it as a game to get better at. As you’re building skills, you’re also gaining knowledge by learning from financial experts, podcasts, books, videos, and other types of media.
You feel excited to improve your money life and begin to focus on getting organized, adding intentionality to your money life so you can make better and more effective decisions.
Critical Money Moments
People are sometimes thrust into this mindset after experiencing a critical money moment — like an inheritance, birth of a child, equity compensation event, growing savings account, career change, relocation, etc. — which then motivates them to take their finances a little more seriously.
As you probably know, we specialize in helping clients who experience these critical money moments. With a holistic game plan, you can return to feeling like your life is influencing your money — and not the other way around.
Our financial planning process is organized and thorough. While you’re still committing time to the process, you’ll face far fewer dead ends in your decision-making and have the confidence to move forward with the complex made simple. It’s through the lens of your financial plan that we provide you with actionable recommendations and aid you in implementing them, including the management of your investment accounts and the preparation of your tax return.
You continue to work with us because these moments occur consistently and frequently enough that a well-defined financial plan and ongoing guidance from your very own personal finance expert becomes indispensable and extremely valuable.
Some examples of critical money moments and how we help include:
Money landed in your lap from an inheritance, business sale, gift, lottery, or your estranged uncle passing away and leaving you everything. What do you do now? While people come into money for many reasons, the steps you take after receiving a windfall are critical.
Our windfall planning helps you:
▶︎ Growing Savings
You might not recognize it at first, but the amount of cash in your checking account increases. You don’t plan to spend it, so what do you do with it?
Our growing savings planning helps you:
▶︎ Equity Compensation
You have the opportunity to plan with equity compensation, and you’ve got some big decisions to make.
Remember, we have an FPFoCo Academy personal finance module about this subject: Equity Compensation 101.
Our equity compensation planning helps you:
▶︎ Relocation / Career Change
You’re excited to start a new chapter of your life. Whether you’re going through a career change or relocation, we can help during your life transition.
Our life transition planning helps you:
▶︎ Retirement and Financial Independence
The lightbulb goes off that you want to proactively prepare for when you leave “mandatory work” — aka retirement. You want to start making good decisions and make your last working years as efficient as possible.
Pro Tip: The earlier you start preparing for financial independence, the more flexibility and freedom you’ll have later on.
We plan to dedicate our upcoming FPFoCo Academy personal finance module to this subject. Stay tuned!
Tailored Processes For You
Many people experience more than one critical money moment in their lifetimes. So if one of these — or another — has begun to impact your life, we’re here to guide you through it. If we don’t already have a general process for your unique critical money moment, we’ll create one especially for you. And if one of the above sounds like something you’re going through, we’ll tailor our process to suit your specific needs. Instead of going it alone, reach out or grab a spot on the calendar.
Ready to schedule your next meeting?