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Personal Finance column: Financial curiosity opens doors

My granddaughter, Zaylee, is almost 3 and talking up a storm. “Why?” tumbles out of her mouth like water flowing over rocks — continuously. Experiencing that deep quest for understanding the world is refreshing. I also admit it’s at times humorously taxing as her questions are insatiable. As a parent or grandparent — can you relate?

Curiosity can wane as we put life under our belt and experiences in our back pocket. Financially speaking, we acquiesce to our days — bringing money in, spending it, sharing it, growing it and protecting it. What if we were to pause and ask why around the financial tools, temperaments and techniques we have put in place and take for granted? Dig in, drill down on the purpose, reason or motivation of our cash causalities. I contend that by asking questions we will make better decisions around our dollars.

Why do I have this career?



Why do I want to retire?

Why draw money out of this account versus a different one?



Why do I have this life insurance policy or these employee benefits?

Why did I make that purchase?

Why do I give to these causes?

Why do I own these stocks?

Why can it be difficult to discuss money?

If your why doesn’t address current tax environment, legislative policies and the economic season, you may be missing out on opportunities. If your why doesn’t align with your integrity or core values, you will probably experience some financial or relational angst somewhere down the road. If you don’t ask why, money will leak out of your life like a slow, unnoticed drip under your sink. It will cause damage, and the sooner you discover it, the less costly it will be. Asking why questions around money will lead to more questions, unveiling hopes, joys, fears or regrets.

Let’s play this out. Q: Why do I own this stock portfolio? A: Because I want to make money in the markets. Q: Why do you want to make money? A: So I have security for the future. Q: Why do you want security? A: I don’t want to be burden on my family or community.

Attention is followed by intention. When you pay attention to the why of your financial life, you will be increasingly intentional about the who, how, what and where details of your dollars. You will make subtle yet poignant shifts in your monetary mindsets or modalities.

Why do I own this stock portfolio? Your answers could head in a multitude of directions as you unpack the how, what, who and where questions. You may find yourself digging into tax efficiencies either in the vehicle you are utilizing (401K, SEP, IRA) or as you manage tax loss gain or harvesting techniques. It may lead you to look at your cash flow needs and how it is being produced in our current economic climate. This same question could start conversations with family members or friends around what you want your fall season of life to look like. It may facilitate a discussion around what does security look like or how much is enough. You could also head down the path of investing in or staying away from certain companies as a matter of principal. Everyone’s why answers are unique and warrant investigation.

Asking why is about taking responsibility for your financial choices — small or substantial. Asking why builds on your financial agency as you do the best you can with what you have. You let go of blame — of the government, the markets, others and yourself. You embrace possibilities and potential. You take steps to move forward on your financial journey.

Try it: With the enthusiasm of a 3-year-old and the sophistication of an adult — embrace financial curiosity and start asking “why.”

Danielle Howard is a CFP® and CKA® with Wealth By Design LLC in Basalt. Check out her retirement podcasts and blogs at daniellehoward4u.com.

 


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