When it comes to money, we're all working from a few negative scripts that can hinder our finances. And while going off-script is hard, it is possible. That's what we're discussing today.
Today's question is from Kristin:
I come from a family that was poor and HORRIBLE with money, but I've been able to get my shit together to buy a house, pay off all of my credit card and consumer debt, and build the beginnings of a retirement account.
I've also busted my arse to have a great job that pays me well. The problem is I know I don't know jack about how to make my money make money and I'm frankly paralysed with fear about finding a financial advisor that I can trust and will help me.
I've read the articles about how to find a trustworthy advisor and I'm still terrified that it could end in disaster for me. I'm equally terrified about what could happen if I *don't* find an advisor.
Is it OK to just start with the guys at my credit union? What do I need to watch out for? More generally, how do I get out of a poverty mentality and figure out how the hell to have and manage money without being in constant fear?
This is what individual experts have to say generally about an issue that affects each person differently — if you want personalised advice you should see a financial planner.
Changing Your Money Mindset
The difficult part of your question, Kristin, isn't about finding a financial advisor — that's straightforward enough (and I'll list out the steps in a bit). What seems to be the bigger issue underlying the question is your relationship to money.
There's no easy way to change our money mindsets — what we experience growing up and the lessons we learn then will stay with us for life. But that doesn't mean it's impossible to build better habits, as you clearly already have.
First, recognise that you've done well by yourself: a house, zero debt and a burgeoning retirement account is nothing to sniff at. It's truly impressive — give yourself some credit. And since you've done so much already, there's no reason to believe you'd screw it all up now.
The sense I get is that you don't have confidence in your ability to manage your money and make decisions beyond the basics, like which retirement account to open — a feeling which you've indicated stems from how you grew up.
But it doesn't take any special skill set to be "good" at personal finance, and you don't need to worry so much about making mistakes that you do nothing, or default to what makes you comfortable already (in this case, your credit union).
You'll need to do research, sure, but anyone can do that. What you're lacking is the confidence to do so. Likely, you don't want to end up back where you were when you were growing up. That's a real consideration; I don't blame you for being cautious.
But it's also not a healthy mentality, for your money, which you could probably be better maximising, but more importantly for the stress it's clearly causing you. It won't be easy to suddenly make yourself more confident, but we have a few resources that may be able to help:
Change Your Money Habits By Changing Your Money Story
This is a multi-step process that may be able to help you rewrite your negative money scripts. I'd recommend buying Amanda Steinberg's book referenced in the post (she goes through the same sort of cycle you're dealing with) or at least checking out her website, Daily Worth.
How Your Mindset Affects Your Finances
Some bad money habits are hard-wired into our brains.
The Shift in Mindset That Will Help You Get Out of Debt
How practising gratitude can help you shift your money habits.
Think of Money as a Tool, Not an Ideal
Thinking of money in black and white terms will just make you feel guilty.
You Don't Need More Money Advice, You Just Need Advice You Can Relate To
It's all there in the name — if you're reading advice that makes you anxious or pessimistic, you need to read different money advice.
This is just a starting point, though. The right financial advisor may also be able to help you with your money mindset — and you definitely don't just want to trust whoever works at your local credit union.