By Barbara O’Neill, Ph.D., CFP®
Whether you have been a financial practitioner for decades or are fairly new to the field, there are always things to learn about effective financial education. Below are insights for service providers working with military families:
- Pandemic Acceleration – COVID-19 sped up changes already underway in many aspects of life. Examples include remote learning and meetings, use of apps, more awareness of wealth disparities, and more fluid organizational structures where people can assume leadership roles regardless of job title.
- Preparation is Key – There is no such thing as “future proofing” personal finances because “life happens.” However, there is “future preparing” where strategies are put into place to deal with potential life events. Examples include emergency savings, adequate insurance, and strong social capital.
- Lifelong Learning – Financial practitioners should consider themselves subject matter students, not subject matter experts. The world of personal finance is shifting so much (e.g., new laws, trends, and products) that there is a constant need to keep learning.
- No Blame, No Shame – Many people experiencing financial difficulty feel shame about their situation (e.g., lack of savings, high debt, and poor decisions). Reassure them that you acknowledge their truth and “the past is in the past.” Then empower them to take steps on a path toward financial stability.
- The Power of Small Wins – Help people build financial self-confidence by achieving small, realistic goals. Set goals together with clients by asking “what are you trying to change?” Then identify specific interventions (e.g., savings challenges, financial calculators, and powerful stories) to foster positive action.
- Help Clients Alleviate Stress – Cognitive load research indicates that stress is a drain on people’s ability to do things. It saps mental bandwidth and people often make poor (or no) decisions. When clients are focused totally on the “here and now,” they cannot think about what lies ahead.
- Flexibility is Key – People are “messy” and quantitative details about their finances (e.g., cash flow, net worth, and debt ratios) do not tell the full story. Financial practitioners must be flexible and let client goals drive education or counseling sessions. A good introductory question is to simply ask clients what they want.
- FOMO is Real – Fear of Missing Out occurs when people see others living their best lives in comparison to their own. Remind clients that most people do not become wealthy overnight. Rather, wealth-building requires four key components: time, patience, education, and discipline.
- Reframe Language– One speaker noted a positive response by clients to “opportunity fund” vs. “savings account.” It puts a positive spin on many possibilities for the money. A military leader recommended a separate “transition account” for PCS expenses and military separation because “emergencies can still happen too.”
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