Sit down with any traditional financial advisor and what are the first questions they ask you? It’s probably somewhere along the lines of, “what’s your plan?” Or, “how much do you make?”
While these are important things to consider at some point when setting financial goals, they’re missing a few key components … four other dimensions, to be exact.
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There might be a reason why so many financial services companies fail to really help people achieve financial confidence and strength– they’re only looking at it through one lens. The lens of mathematics, statistics and cold, hard facts. Do you have an emergency fund or don’t you? How much are you putting away for retirement? How much did you budget for eating out this month?
What are these questions missing?
They’re missing the fact that our relationship with money is multi-dimensional, and in order to succeed, we must recognize ALL the influencing factors. For example, how much I budget for eating out is greatly affected by how extroverted I am. Or, the reason why I religiously save for emergencies is because I was brought up in a household where we were always going into debt to cover unexpected costs. Or, perhaps I make it a priority to tithe, even if I’m living paycheck to paycheck.
These are all aspects of something we like to call the Five Dimensions of Money. These dimensions look at all of the reasons we are who we are, especially as it relates to how we feel, think and handle money. We believe that if you get to know your story, you’ll be better equipped to overcome challenges on your journey to financial strength.
Let’s dive a little deeper into the five dimensions:
Beliefs, Priorities, Paradigms
How your faith, values and convictions shape your views on money, ‘stuff,’ and others. For example, many of our customers dig into Scripture for inspiration and guidance on how to manage family finances with Christian values. The spiritual dimension can also influence how you feel about tithing, which causes or organizations you financially support, and how faith plays a role in your lifestyle.
Family, Peers, Traditions
How your upbringing, racial/ethnic, regional, and socio-economic background influence your thoughts and behavior. This is a fascinating dimension that most people overlook with regards to personal finance. Sources of cultural influence include family, organizations and peer groups.
Think about your earliest memory of money. What thoughts, feelings or learnings did you take away from that experience? This is your first exercise in learning how your cultural background influences your relationship with money.
Thoughts, Feelings, Reactions
How you ‘feel’ about money. Recognizing and reframing our thoughts is key to having healthy conversations and behaviors. For example, feelings of fear, shame or guilt about money are incredibly powerful, and might lead us to avoid dealing with issues and/or effecting our wellbeing.
Learning how you feel about money is also incredibly important when managing finances with a significant other. Acknowledging each other’s emotions can lead to more productive and supportive conversations. This is just one of the reasons we created our digital tool TogetherTM and filled it with activities to help couples build better relationships with money and each other.
Habits, Actions, Routines
Your habits and actions. For example, knowing that you have a habit of online shopping after a bad day at work, can help you research ways to curb retail therapy. You’ll find that a lot of the habits and routines that we form result from our avoidance or preference to certain emotions. This is the beauty of these dimensions — while they are separate, they are also inherently intertwined.
Recognizing our behaviors around money and communication can help us establish healthy money habits, and overcome the not-so-nice routines. Just take Sherrian and Khaleef for example, as they uncover the five spending habits that drove each other crazy.
Savings, Spending, Insurance
How facts, tools and resources influence how you manage money. This is the “comfortable” spot for most financial companies as it deals with the nuts and bolts (aka products) that can help a customer gain financial strength. For example, if you’re looking at the practical side of your finances, you might say, “We bring in $3500 a month and spend about $2700 a month. We need to find an emergency fund to put some of our savings.”
The practical dimension is just that, practical. It’s only after unearthing how the other four dimensions play into your decision-making and lifestyle that you can confidently be in control of your financial success story.