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Financial Planning

How to Overcome Your Fear of Financial Planning

Starting something new can be scary, but if you're patient, have a good support system and learn to make it fun, you might just discover a passion that can improve your life.

Don't be scared to start something new in life, whether it's financial planning or a do-it-yourself project.

My daughters, Karolina and Sarina, enjoy making projects together and visiting the craft store. They wanted to learn how to knit because they love infinity scarves, but they were apprehensive about starting something new because they were afraid of making a mistake.

Clients often have the same bout of fear when they first start investing or planning for the future. Lack of experience can make people feel vulnerable or anxious. To help them overcome their fears, I told my daughters the same thing I tell my clients: Never let fear of the unknown prevent you from living your best lives.

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I encouraged my daughters to read the manual and then try to follow the example. The same is true for the financial planning process. Although many people know that saving for their financial future is important, many don't know what steps to take to accomplish their goals. Whether you're aiming to purchase a home, pay for college or save for retirement, you have to figure out how to properly manage your financial resources in order to achieve your life goals. It's important to know that financial planning is a process, not a transaction.

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Here are some other ways to feel more confident about planning for the future:

1. Have patience.

My younger daughter, Karolina, was so excited about her project that she rushed her knitting and got her yarn twisted. I spent about 30 minutes to an hour untwisting $5 worth of yarn. (What was I thinking? I was so tempted to quit myself! After all, time is money.) The infinity scarf may have been too advanced for a beginner. Karolina said, "Mom, I learned my lesson."

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Careful analysis and preparation are essential elements of any sound financial plan. I have heard stories about folks so eager to start investing that they become impatient and rush into investments that aren't right for their situations. The unpleasant outcomes of doing so breeds resentment, and they become discouraged.

Well-planned diversification is key! Don't put all your hopes into one investment idea. And don't be afraid to start slowly by investing smaller amounts of money on a regular basis to build financial confidence.

2. Learn to enjoy the process.

Once the colorful yarn was untwisted, the girls could see the intricacies of the process. They were inspired and discovered a new passion. Karolina felt as though she had started a new trend. She is thrilled to bring her yarn and loom to use in between her events at swim meets because it is calming. My older daughter, Sarina, loves the flexibility of knitting anytime and anywhere.

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In financial planning and investing, clients should enjoy milestones, such as paying off student loan debt, creating an emergency fund or contributing the maximum amount to their retirement accounts. If you can find pleasure in the process, you will be motivated to do more.

3. Make it a family affair.

I'm not exactly the craftiest person, but I encourage my girls to try something new and cheer them on. I reminded them what it was like when they started to learn how to play piano and swim butterfly.

It is no different with clients: I support their decisions and motivate them to take risks. As parents and financial advisers, we need to recognize people will make mistakes. Whether you do the wrong stitch or accidentally incur an overdraft fee, the most important thing is that you learn from your mistakes, apply your knowledge and gain confidence.

4. Celebrate the successes.

The scarf is almost done, and my daughters can clearly see the product of their hard work. With financial planning, it is an ongoing process. Celebrate the small victories and learn from the challenges. In no time, you will be wearing a beautiful infinity scarf or have financial peace of mind.

About the Author

Marguerita M. Cheng, CFP®

CEO, Blue Ocean Global Wealth

Marguerita M. Cheng is the Chief Executive Officer at Blue Ocean Global Wealth. She is a CFP® professional, a Chartered Retirement Planning Counselor℠, Retirement Income Certified Professional and a Certified Divorce Financial Analyst. She helps educate the public, policymakers and media about the benefits of competent, ethical financial planning.

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