As financial planners, our ultimate goal is to help our clients live happy, fulfilling, purposeful lives.  The ability to help guide people during their journey and assist them in achieving their goals is a privilege, and we wanted to share some of the habits of our most successful clients.  And by successful we don’t necessarily mean the wealthiest or the highest income earners – but those that are really doing a great job of using money as a tool to live happier lives.

I’ve written hundreds of financial plans over the last several years and have been able to observe common traits of clients who have their financial “ducks in a row”.  Hopefully sharing these habits can help give you some pointers for getting on (or staying on) the path to success:

 

1) They Plan for the Unexpected

One of the best ways to keep yourself up at night is knowing you’re not prepared to deal with an emergency tomorrow.  Having a plan in place for the unexpected is the baseline for financial peace of mind. Do you have an emergency fund in case you lose your job tomorrow?  Do you have the right insurance in case you get in a car accident and can’t return to work right away?  Do you have the right policies and documents in place in the case of an unexpected passing? Our most successful clients do — and while the scenarios are not enjoyable to think about, these people can rest assured knowing that their families and loved ones will be provided for in a worst-case scenario.

 

2)  They Pay Themselves First

You’ve heard it before: “Save first, Spend later.”  It’s trite, but it’s true — and it’s a game changer.  In the era of instant gratification, it’s way more exciting to buy a new TV today than it is to put money in your 401k and lock it away for 30 years. But in 30 years, I’ll bet you’d wished you’d put the $2k in the 401k – because that TV no longer exists and that $2k could be $20k.  Our most successful clients have the discipline to carve out what they need to save in order to achieve their goals FIRST, and then do as they please with what is left over. Not only is this financially smart, but it’s mentally liberating as well. You’ve already done what you need to do, now you have the freedom to spend what’s left.  No guilt about buying that TV if you’ve taken care of business first.

 

3)  They Base Their Financial Decisions on Values – Not Just $

Every client comes with a different set of values & goals.  Some clients want to maximize quality time at home with their family.  Some clients want to retire ASAP. Some want to be able to provide a nicer life for their children than they had.  No matter what they are, it’s important to identify these values and use them to help guide financial decisions. One topic we run into often is buying a new home – and it’s usually: “What is the MOST I CAN spend on a home?”  Instead of looking at this purely from a financial standpoint, our most successful clients approach such topics with the mindset: “How much SHOULD I spend on a home based on my other goals and values?” If your goal is to maximize quality time at home with your family, you should avoid buying a home that requires you to work 60 hours/week until age 70.  That would go against your values. If your goal is to retire ASAP, you should probably buy a home that allows you to keep your lifestyle relatively modest so you can save a lot. But then if your goal is to provide your family with the life you never had, perhaps you invest a lot more in your home. Whatever the reasoning, our most successful clients make decisions that allow them to remain in alignment with their values as well as their budget.

 

4) They Know What They Don’t Know

Sometimes asking for help feels like a display of weakness, but we believe this is actually a strength.  If you’re a surgeon – that’s your craft – you don’t have the time to learn how to also be your own financial planner, accountant, investment advisor, etc.  No one can “do it all” – at least not efficiently & effectively. Our most successful clients are able to recognize their own limitations and ask for help – utilizing other experts and allowing them to help along the way.

 

5) They Adapt Their Plan

A financial plan is constantly evolving.  What you need to be doing to stay on the right path will change year to year (or even month to month) based on your circumstances.  When big life events happen – new jobs, big raises, inheritances, new children, paying off large debts, etc. – it’s important to adjust your plan to account for these things.  Our most successful clients plan for these events ahead of time. If you get a $100k raise and get used to spending it all – you now likely have to save a lot more money (or work a lot longer) to maintain that lifestyle in retirement.  Our most successful clients recognize these opportunities and plan for them ahead of time.

 

6) They Have Balance

It’s not out of the ordinary for us to see clients regularly working 60+ hours/week.  This can lead to burnout, misaligned values, and increased stress. What’s the point in working your tail off, if you can’t enjoy the result of that hard work?  Our happiest clients make a point to budget — both time and money — for travel and vacations with family and friends. They work to live.. not live to work.

 

7) They Communicate Openly

It may or may not surprise you to hear that money is the leading cause of marital problems.  This is largely due to the fact that people don’t like to talk about money.  Maybe they grew up in a private household, maybe they’re insecure about spending habits, maybe they have hidden credit card debt, etc.  Regardless of the reason, it’s a hurdle that must be conquered if you want to have a happy financial life. Our most successful clients have open and transparent communication about money – no matter how uncomfortable it is.  This doesn’t mean they always agree on financial decisions, but it does mean that everyone is kept in the loop, feelings are shared, and opinions are heard.

 

There are a handful of other healthy habits we could share, but these are the most commonly shared traits we observe.  Are you curious how we might help you live a more financially healthy life? Schedule a no obligation call here to learn more about our services. 

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