Crystal Clear

When it comes to financial well-being, cozy up to, and get clear on, your goals

Clear is kind. Unclear is unkind

~ Brené Brown

One of my favorite authors is Brené Brown. If you haven’t watched her Ted Talks (or read her books) already, I highly recommend doing so. Brené has done extensive research over 20 years on the emotions of shame and vulnerability and presents her findings with a straight-forward, plain spoken style you’d expect of someone from Texas. She often infuses her stories with humor, providing some levity to the tough subjects she tackles. The topic of personal finance is dripping with the same tough subjects she writes about, so you’ll often see me reference her work as it relates to our conversations on financial well-being.

In her most recent book, Dare to Lead, Brené introduces us to a versatile and useful principle: to be clear is to be is kind – to be unclear is unkind. To be clear with others, and clear with ourselves, is one of the kindest, most respectful things we can do. Clarity provides direction (or at least an initial compass read), boundaries, and expectations. It is easier to make the decisions that lead to achieving your goal when you have clarity of purpose and direction. Without clarity, you’re more likely to wander around and do what feels good in the moment. In other words, you’re more likely to be impulsive. And I think we can all agree that impulsivity often leads to decisions and actions that aren’t always the most kind or respectful to ourselves or those around us. The clearer you are, the less confusing things are; for yourself and those around you. When others don’t have to guess at what you want or what you’re thinking, and the less YOU have to guess at the steps to take to get where you want to be, the more respectful you become of two of our most valuable resources: time and energy. But it goes beyond just time and energy.

Let’s take a look at how being clear in your financial life can be an act of kindness and respect toward yourself and your family. Here’s a simplified example: If I’m always impulsive with my money, have massive amounts of debt and no savings, how do I take care of an ailing family member when they need me the most? How do I take care of my child if they get sick and I want to take time off work to care for them, without the added stress of bills piling up that I can’t cover because I’m not at work? Here’s another one: I don’t plan for retirement because I can’t really decide what to do, or it’s just too far away to think about right now. One day you wake up and … guess what … retirement age is here! But … you don’t have any savings. Social Security is a thing of the past. You’re struggling to maintain a good quality of life because you can no longer afford it. What if you become a burden to your family because of this lack of clarity in planning 20 years ago?

The future may have seemed far away when you were 20 years younger, but when it arrives, it’s right in front of you and you have to deal with it just the way it is. In the book, Loaded, author Sarah Newcomb reviews numerous studies on the psychology behind money, our values, and how to take charge of our financial future. The first concept she outlines is that of future discounting. That’s a fancy term for our attitude toward the future; the farther away something is from today (say, retirement or our concept of self at retirement age) the less likely we are to pay attention to it - we discount it. As a result, we are not as likely to plan for retirement when it’s a long way off.

One way to combat this natural tendency we all have is to get clear about what we want and who we want to be in the future. Ahh, it’s all coming together! Clarity and proximity … they work together. Studies show that people who have a clearer picture of their future and who they want to be have more positive financial behaviors and more positive emotions towards their financial situation (regardless of income level). Those who have a vague notion of their futures and future selves have less than desirable financial behaviors and have more negative emotions around their financial situation.

Let’s break this down a little more. What’s a clear picture of your future mean, exactly? It means that you have a pretty good sense of who you want to be (in 5, 10, 20 years) where you want to be, with whom and what you’d like to be doing. This vision of your future need not be set in stone; obviously life changes and we adjust to remain resilient. But, when we cozy up to our future selves and take an active part in designing this future self by creating a clear and detailed picture, our behaviors and emotions are more positive, and we’re more likely to create the habits that shape the behaviors to achieve our goals!

Our impulsivity is lessened which means those annoying habitual reactions to our impulses can no longer adversely impact our key financial behaviors. Let’s take credit card use for example: instead of using credit cards to finance our every whim, someone who has a clearly detailed vision of where they’re headed is more likely to NOT use credit cards and save up to make purchases, thus keeping themselves (today’s self and their future self) out of the destructive debt cycle. If you’re a naturally impulsive person, here’s a personal financial tip: cut up your credit cards! Keep the temptation away by getting rid of the thing that enables you to be impulsive.

In summary, get clear on, and cozy up to, your dreams in life. Make a vision board. Paint a picture. Write out a list. Try out a free age-progression app (such as AgingBooth) to see what you might look like later in life (always good for a laugh with friends … but does help you start to create empathy for the future you and motivate you to take care of that version of you!) Do what works for you to begin the process of creating a clear vision for your future. And if you need some extra guidance or accountability, reach out for a coaching session!