Finance
#3 Fundamental of Money: Build A Team
Building a team of experts to help make financial decisions is one of the main fundamental steps to taking control of your personal or business...
Don’t make any personal finance decision that you don’t understand the basics of. You don’t need a PHD to be able to make sound money decisions.
My #1 fundamental of money is never to make a money decision that you don’t understand the basic fundamentals of how what, and why. These questions will help guide you to make a smart decision based on information, facts, and evidence. This eliminates poor decision-making based on negative emotions and prioritizes positive emotions. One doesn’t have to acquire a P.H.D. in economics or finance to make financial decisions for ourselves and our household.
KISS-FM and WII-FM
When making a money decision, I use two concepts I learned in sales training many years ago. Keep It Simple Stupid is a sales technique to present simple information to a client to get the sale. In a money decision, I always start from the baseline that I am stupid and need to put in the effort to learn the basics. I rarely use anything more than elementary math (addition, subtraction, division, and ratios). I want to learn how it works and what is needed on our part. Anne and I sit down and go over the basics of how and what until we come to an agreement.
What’s In It For Me is another technique to investigate further if the decision is proper. This does not mean how it makes us feel at the time. This helps to keep us from making decisions made by impulse and raw emotion. I want to learn how this affects us long-term. How does this not only affect our financial situation in 1 year, five years, twenty years, etc but also how does it affect our emotional and relational well-being into the future?
Our HSA/Health Insurance Decision
An example of how we go about making a difficult money decision. A couple of years ago, Anne’s company offered a Health Insurance option that included an HSA with a lower out-of-pocket/higher deductible. Anne and I both investigated how the plan worked, its advantages (like tax savings), disadvantages (No co-pay), and how it would benefit our family. We each took a few days to research and met a few days before our decision deadline. We each shared our ideas and decided to make the change to the new alternative plan. Change can be scary, but we are glad we made the switch. Due to some health challenges over the last few years, the lower out of pocket has saved us thousands of dollars, even though the front-end costs with no copays can be difficult to deal with at the moment.
Money doesn’t have to be intimidating if you break decisions down to the basics. We cannot predict the future, but using this process keeps us from letting all of the negative emotions that surround personal finance from making those decisions.
While I may use the 80/20 rule as a general term, I understand the importance of dealing with each situation on its own merits. This is why the bread and butter of FiscalDad Coaching is person-to-person individual coaching. Click on the “Book Now” button to schedule a free, 30-minute no obligation meeting to decide if we can connect on a personal level.
