Having worked with numerous individuals for many years, it has become clear to me what is necessary for one to be a strong manager of one’s own personal finances.   Because of this experience, I formalized a model of success called The Three Pillars of Financial Management(TM) as you see in the graphic.  Think of it as a three-legged stool.  If one pillar is weak, financial stability is at risk.  There are many reasons why some people need assistance in this area including health, education, time, interest, and more.  There is no judgement here.  Sometime skills can be learned and sometimes the underlying issues prevent proper management.  Understanding the the Three Pillars, helps us understand ourselves.

The first pillar, Understanding,  is the meat of your financial stability.  If your eyes glaze over when someone talks to you about financial topics that we all have to negotiate, then it may be that your financial education has some gaps.  Not everyone is good at this stuff, and you probably did not learn these skills in school!  Not only that, but the rules change over time and if you don’t enjoy dealing with financial matters it can be hard to make yourself stay abreast of the changes.  There are so many topics related to finance that it can be overwhelming to master them all, or even to try.  Then throw technology into the mix and for many, the first pillar starts to topple.

The second pillar is the system you use to manage all the information that overloads our mailboxes and inboxes every day. Without good systems for handling mail and email, passwords and banking, you can quickly find yourself behind the 8-ball.  This leads to stress, and potentially financial loss.  If you miss paying your car insurance bill you might get a late fee; if you have an accident during that lapse period, it could be catastrophic.  Good systems remind us to do things without overwhelming us.  

One of the stressors of any good system is too much paper.  Important items are hard to find, wasting time better spent.  Things get lost.  “Fear of discard” is one of the most common roadblocks that we deal with.  Often it goes back to the first pillar–knowing what you can safely get rid of.  

You can have a great understanding and systems in place for managing your affairs, but if something happens that blocks your ability to get things done, your financial stability is put at risk.  Execution is the physical, cognitive & motivational means to maintain a stable financial life.  Even procrastination can seriously hamper you from meeting goals and expectations.  Executive function is controlled by the prefrontal cortex in the brain.  Damage to this part of the brain, including trauma and the effects of aging, has a long list of effects.  The ability to plan and execute are part of this.  The inablity of older adults to manage their finances has been identified as one of the early indicators of memory loss and possible dementia.

What we have discovered in working with clients is that when just one pillar is out of balance, the whole house can come crashing down.

The crash is sometimes sudden, as in the case of an accident, stroke, or death of a spouse, or more often there is a slow crumble.  We see this with diseases that progressively debilitate, with the progression of an aging brain, and with the accumulation of years of poor financial decision-making.  Our desire is to help clients at whatever stage they find themselves or a loved one:

• Crisis Mode
• Planning ahead

Those who have reached a crisis point are falling behind in their financial tasks, perhaps have been scammed, and they, or their families are overwhelmed, and probably not just with finances.  For them, we put the financial fish back in the tank, reduce the stress, and manage things with and for them as long as they need help.

For planners hoping to avoid an eventual financial crisis, we offer Power of Attorney and Executor agent services.  We stay in touch at least annually to stay up-to-date on changes and to make sure our services are not yet needed.

Contact us if you are interested in finding out how we might serve you.