As a financial advisor, I’m sure you’ve noticed that people out there have a lot of funny ideas about money. Our mindset when it comes to managing money and wealth is usually ingrained at an early age and affects how we spend (and save) our entire lives. It has a lot to do with how our parents thought about money and, if the habits we learned aren’t healthy ones, we can be at a disadvantage later on in life when we start making money of our own.

In my advice-based planning practice, I’ve noticed that those who have unhealthy beliefs about money fall into one of two categories: those who have trouble saving and those who have trouble spending.  Each have their own unique challenges that impact their lives and need to be mentored in different ways. For this article, we will focus on those who don’t have enough money put away.

For Those Who Have Trouble Saving

I probably don’t have to tell you the challenges that will be faced by those who can’t never seem to save money. They may get into debt, never be able to afford a nice house, and will be in lots of trouble should a financial crisis hit or they reach retirement age. Here are a few things you can do to help clients who need to save more.

Equate saving with freedom  Many people have trouble saving money because they think it is synonymous with deprivation. They don’t want to deprive themselves of nice meals or fun vacations or cool gadgets, so they consistently spend their whole paychecks. The key here is to make saving less about deprivation and more about freedom. Encourage them to think of the freedom they will be buying each time they make a deposit in their savings account. This freedom could come in the form of some day quitting a job they hate, traveling around the world, or simply the freedom of being free of debt.

Connect saving to goals  Saving money for the sake of saving it is a tough concept for many people to wrap their minds around. When you connect it to certain goals, however, it often flips the switch and allows your clients to visualize what their savings will do for them. Whether they are young and need to save for a first home or are in their 50s and are establishing retirement goals, you need to help them see the tangible results of their increased saving.  

Ask who they spend time with  One of my favorite books is Tools for Titans by Tim Ferriss. In this book, Tim states that we are the average of the five people we spend the most time with. If your clients spend all their time with friends and family members who are constantly in debt, live paycheck to paycheck or rarely save for future goals, it’s likely they will continue with the same pattern. This is where your role as a mentor comes in. You need to be one of those people in their lives who is responsible with and has a good attitude toward money. You can then encourage them to seek out more mentors who also have positive financial habits. As the number of people around them who are good with money grow, it’s very likely they will become better savers as well.

Do you work with clients who never seem to have any money left over at the end of the month to put into savings? Use the three above suggestions to help alter their views on what it means to save and you can begin building healthier habits for a more stable financial future. In my next post, I’ll talk about the other group of clients you’ll likely work with: those who have trouble spending. In the meantime, if you have any questions about mentoring your clients, please send me an email or give me a call so we can talk more.

Exclusive Training

How to Operate a 7-Figure Entrepreneurial Advisory Business

We won't send you spam. Unsubscribe at any time. Powered by ConvertKit