Guest Post: Where Do You Get Stuck With Money?

As a Certified Financial Planner™ practitioner, new clients come to me because they want advice on specific issues like:

What can I do to get better control of the cash flow in my business?
How can I develop a budget that allows me to spend and save?
Can I afford to get office space?
Am I on track to retire?
How should I invest my portfolio?
How can I get ahead in my financial life?

I bring up the definition of insanity – doing the same thing over and over and expecting a different result. As I begin to answer these questions, my clients realize that most financial decisions they must consider somehow relate to making a change. They become more aware of what’s getting in their way and begin to reflect on the notion that something has to change.

Our human brain is wired to resist change because we like the status quo. But sometimes making a change is the right thing to do.
Financial planning forces us to prepare and anticipate for change – which usually can improve our financial lives. Financial planning also gets us closer to reaching our goals – buying that vacation house, feeling financially secure in retirement, starting a new business, or even starting a new hobby.

James Prochaska, a Ph.D., writes about the 6 stages of change in his book Changing for Good (James Prochaska, John Norcross and Carlo DiClemente. New York, NY: William Morrow and Co. 1994). Take a peek below and think about some issues that you are stuck on – and which stage of change you think you may be in.

1. Precontemplation – We have no intent to change. We are in denial. People are putting pressure on us to change. We think its too late to change. For example, we need to quit smoking, save more, take less risk, spend more time talking about our finances with our financial planners, or spouses.
2. Contemplation – We are getting around to acknowledging that we have a problem and are willing to think about what we should do to solve it. This could still take us months or years to make a decision. We may even know what we need to do but we aren’t ready to do it yet. For example, we know that we need to renew our gym membership and get back in an exercise routine.
3. Preparation – We are almost there. We will be making this change in a few weeks. We are developing an action plan and may even rehearse it. For example: We are going to ask for a raise by the end of the year. We are going to do our financial planning by the end of this month.
4. Action – We are taking action based on some type of gameplan we developed. We are making our move and doing something about it. An example would be meeting with our estate planning attorney to create a family living trust, or rebalancing our portfolio based on our financial goals.
5. Maintenance – This stage is where we need to stay in the zone, keep the same new routine, and maintain our desired level of change. It’s where we need to meet with our financial planner every quarter to make sure we are on track and moving towards reaching our goals.
6. Termination – This is where this new change is so deeply rooted in our lives that we don’t go back to our old ways of doing what we changed. It’s a new routine behavior like balancing our checkbook every week, or stretching before and after we exercise.

Life is a journey and change is a constant in your life. The next time you are trying to make some type of transition, especially a financial one, consider reviewing these 6 steps. You’ll be more aware of where you are with regard to change in any direction, and you will understand what it will take for you to get to the next level.

Justin Krane is a Certified Financial Planner with Krane Financial Solutions. Follow Justin on Twitter @justinkrane.

About Justin Krane

Justin Krane is a Certified Financial Planner professional and the President of Krane Financial Solutions. His savvy, holistic approach to financial planning allows clients to unite their money with their lives and businesses with sound financial decisions. Using a unique system developed from his studies of financial psychology, Justin partners with entrepreneurs to create a bigger vision for their business with education and financial modeling.