When I first started writing personal finance articles, I was still on active duty. To help me figure out what everyone wanted to read about, I joined a relatively small group of military personal finance influencers. These were largely people who had been there, done that, and were trying to show other military folks how they could do it too.
Over the years, I’ve often thought the following question:
“Why would someone pay me good money, as a financial planner, when there are people out there showing you how you can achieve these results…for FREE?”
This very question forced me to think long and hard about my value proposition. This article outlines one of the reasons why someone should hire a financial advisor-accountability.
What is Accountability?
According to Merriam-Webster, accountability is simply the obligation or willingness to accept responsibility for one’s actions. But why is that important? After all, we’re all free people (generally speaking), capable of doing whatever we want, provided we abide by societal norms and the rule of law. In a sense, we’re already accountable to society. And given the wide berth of things we’re able to do, that’s a pretty low standard (ever watch the Jerry Springer show?).
But sometimes, we want something a little more. Perhaps it’s to be in better physical shape, or to achieve a certain goal. For most people, the natural inclination is to partner with one or more people with similar interests or goals. And there are any number of ways to accomplish this.
For example, let’s look at a man who wants to get stronger, but isn’t getting the most from their gym membership. They might decide to start going to the gym with a partner. Perhaps just working out with another person will keep him on task. Instead of sleeping in and blowing off a workout, our gym rat now has someone else keeping tabs on him to make sure they’re going to the gym. Or, if they’re really looking to break through, they’ll hire a coach. Nothing inspires action like paying someone to see if you’ll actually show up. More importantly, a good partner (or coach) pays attention to when you’re taking shortcuts or putting in the work to get results.
Similarly, a runner might join a running club.
You can see this in all walks of life. People with pets live longer. Married people life longer (cue the jokes about how married men don’t actually live longer, they just think it’s longer).
Personally, I’m absolutely horrible at writing articles. When I first started writing, I had no shortage of ideas. However, I’ve been writing for a while, and aim to publish one article a week. And the only reason I am able to do so is because I hold myself accountable to my wife, Tania. Tania edits and distributes all of our online content. She expects an article that she can release each Tuesday. If I did not have that accountability built into my editorial calendar, I’d be much less disciplined than I am.
I recently met with one of my favorite clients (they’re all my favorites). When we started working about a year ago, they were financially stressed. While they had made a good deal of progress before meeting me, they were still a little stressed about paying holiday credit card bills and replacing a vehicle. Also, they had a lot of other questions:
- Are we saving enough for retirement?
- Where does all our money go?
- What else are we missing?
When we started meeting, I simply asked, “What is it you want to accomplish in the next year?” They set some modest goals, like paying down their credit card balance and saving more for retirement. However, instead of anything concrete, I simply asked them to commit to two things:
- Agreeing to saving a certain amount of income. Since he travels a lot for work, this included his overtime pay and any per diem that he would get while on travel.
- Each time we met, I wanted them to have a cool story to tell me about what they were accomplishing.
The first meeting, we kind of stumbled out of the gate. They sheepishly told me about how they bought her replacement car, even though we had decided to postpone that purchase until they'd saved some money.
I shrugged it off, because as a financial planner, you’ve got to roll with the decisions that have been made and focus on what you can still influence. There were some other stories that didn’t seem directly related to savings (like helping relatives who were impacted by Hurricane Maria). The best story was when they told me that they were pregnant with their fourth daughter. I was honored when they told me that they hadn’t even told their parents yet!
Fast forward a year. Not only did they have enough for the holidays, they paid cash for everything—no credit cards! Not only that, but they accumulated over $10,000 in their savings account. While increasing their retirement savings. And maintaining a 10% tithe commitment to various charitable causes.
Why did this work?
I don’t pretend to think that I did any of this for them. In fact, they could have done this all on their own, and had a little more money to set aside by saving my fee. But it seems that the sense of having to tell a story to their financial advisor inspired my clients to want to tell the best possible story.
Each time they sheepishly tell me, “we didn’t save nearly enough as we could have,” or “we still go out to eat too often,” I actually get to let them off the hook by reflecting on all the things they’ve accomplished. Things that they might not have accomplished had they not had the sense of accountability to someone else.
There are many people who do not need external motivation to achieve their goals. But it appears that most of us need some sort of external accountability to achieve especially difficult goals. And it’s no different when it comes to achieving financial goals. If nothing else, hiring a financial planner might help you hold yourself to those good financial habits that are key to long-term success.
A habit, good or bad, takes two weeks to create or break. Let us help you start developing those good ones now. Schedule your initial consultation here.