Confessing Financial Sins

I often do not disclose to people that in my past life, I was an investment professional.  Similar to a Physician, I find that this information leads people to ask for quick and dirty (and free) advice about their own personal situation which makes me uncomfortable.  My friends who are doctors seemed to be used to this and when asked at a cocktail party about a sharp pain in some stranger’s left leg, will offer some gentle sympathy and referral to a physician for a real appointment.  With the housing market in the doldrums and retirement accounts slimmed by the market declines to March 2009, I found myself deluged with people seeking financial advice.  Actually, I’m not sure they were seeking specific advice, but wanted to confess their financial screw-ups and blunders: too much credit card debt, speculative ARM mortgage, or over-spending for years.

Like the doctors, I would not have offered financial advice (I wasn’t a personal financial advisor, but that’s besides the point) without knowing sufficient background information. However, I am troubled that so many people wanted to unload their financial dirty laundry to me before informing their spouses, family members or business partners.  This is some generic advice I would give to those in need of the financial confessional booth:

–Stop avoiding the problem — I found that most people felt much better simply telling someone about their financial woes, as they felt they had been leading a double life, hiding their problems from others.

–Find someone to talk to — there are a number of non-profit organizations that are set up to help people navigate their credit or mortgage woes and to explore possible relief options.  In many cases, though, family members will be much more understanding than people expect and can help to transition from the denial to the active coping phase. It’s also helpful to know that so many others are in a similar predicament.

–Create a plan — I have skimmed but have not used the plans of well-known financial advisers like David Ramsey, Suzy Orman, or David Bach.  I have heard from lots of people who swear by them and attribute their turnaround in financial situation. What I do think is quite positive about these advisers is they have clear framework that help to structure realistic plans out of debt.

–Be less afraid of hard choices – I realized that a lot of people who ostensibly were seeking financial advice, were really looking for affirmation of a hard choice that they knew was right, such as letting go of too big of a house or selling the car.

shared at this week’s Carnival of Personal Finance