June 23, 2011
Finding Motivation to Control Spending
In a May 5 Squared Away blog post, I provided a list of financial planners’ five favorite tools for helping people control their spending. In this post, I’m providing their motivational suggestions.
Here are the five tips, based on my informal survey of planners. Each tip includes the psychological rationale behind it.
Find the “Aha! Moment.”
Some clients respond when they see, in detail, how much they’re spending and what they’re buying. Bonnie A. Hughes, a northern Virginia planner, is a big believer in mild shock therapy. She’s had great success by showing clients how much their income would fall if they were laid off, divorced, or dropped out of the workforce. Or she shows them just how much they’ll need in retirement, and it’s usually a big number.
Reason: The Aha! Moment provides the self-motivation that clients must possess and that planners can’t provide. …Learn More