Are you talking about money or finances? And what’s the difference?

Finances are about numbers.

Money is about values and beliefs – beliefs about what we can do, be or have with money.

And there’s a big difference.

When couples clash over money, it’s usually because they have different money beliefs. You can’t solve that with a spreadsheet. There isn’t a goal seek function for optimising beliefs.

If you’re a planner or adviser then, at a client level, you are dealing with both money and finances.

When a client doesn’t follow the financial plan, or won’t engage fully with the financial planning process, it’s because the finances side is bumping up against the money side.

Numbers are in conflict with beliefs.

And since beliefs drive behaviour, then beliefs win over. Every time.

If you want to move forward, then you need to understand the money side. You won’t get there by focussing on the numbers. Don’t think one more spreadsheet, pie-chart or cashflow forecast will help. It won’t.

You need to understand the underlying beliefs that are overriding the numbers.

“If I cut down my spending then ……”

Or

“If I spend that on a holiday then .…..”

Exploring a client’s beliefs can feel a little scary but if a client is stuck, then subconsciously they are also looking for you to help them find a way forward. Start by naming what you see, normalising it and then asking for permission to explore it. Think of it as 1,2,3, go!

  1. “We’ve talked before about going on that holiday you always wanted. I’ve checked the numbers and you can definitely afford it, but I can see you haven’t booked it yet.”
  2. “I find that a lot of people can struggle to change lifetime habits and spend a little more freely in retirement.”
  3. “Would you mind if I asked what’s holding you back or what you’re most worried about?”

Always remember – when you find yourself stuck or your client is stuck, you need to check if you’re talking about money or finances. The blocks are always on the money side.

If you’d like to explore how to help your clients, we have a number of CPD approved courses.

If you’d like to explore money or finance challenges, let’s start with a chat.