Hannah McQueen - The Perfect Balance: How to Get Ahead Financially and Still Have a Life

THE

Perfect

BALANCE

THE

Perfect

BALANCE

HOW TO GET
AHEAD FINANCIALLY AND
STILL HAVE A LIFE

HANNAH MCQUEEN

Every effort has been made to provide accurate and authoritative information inthis book. Neither the publisher or the author accepts any liability for injury, lossor damage caused to any person acting as a result of information in this book norfor any errors or omissions. Readers are advised to obtain advice from a licensedfinancial adviser before acting on the information contained in this book.

First published in 2012

Copyright Hannah McQueen 2012

All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without prior permission in writing from the publisher.

Allen & Unwin
Sydney, Melbourne, Auckland, London

83 Alexander Street
Crows Nest NSW 2065
Australia

A catalogue record for this book is available
from the National Library of New Zealand

ISBN 978 1 877505 18 8

eISBN 978 1 74269 618 8

Internal design by Brittany Britten
Set Post Pre-press Group, Australia

To my boys

Contents

ACHIEVING THE PERFECT BALANCE IS SIMPLE,ITS JUST NOT EASY.

Myth: the more money you earn, the easier it isto get ahead.
Theres an old saying, Money doesnt buy happiness. No. But it certainly helps.

Money is supposed to help you live the life you want and allow you to reach your financial goals pre- and post-retirement. Yet this perfect point of balance eludes most people. Instead, many of us incorrectly assume that the two ideas are incompatible. We too easily accept that if we want to enjoy our lives, our financial goals wont be achieved, or if we commit to our financial success, we are not going to be able to do the things we love.

Many of us presume that the more money you earn, the easier it is to get ahead. However, those of us who enjoy higher incomes realise quickly that income levels and financial progress do not go hand in hand. Getting ahead has less to do with income and more to do with sustainability, the ability to keep going. To keep going you need to feel like you are living a life you enjoy, otherwise your momentum will wane fast. Finding the perfect balance is when you achieve that very precise point of having a life and getting ahead as fast as your circumstances allow.

MANAGING MONEY IS SIMPLE,
IT IS JUST NOT EASY

Money is important in our lives, yet most of us gloss over it. Many books, when talking about wealth creation and getting ahead seem to brush lightly over our understanding of, and our ability to control, the basics of money. They presume we are already in control of our finances, or that we should be. For most people, this is not the case. Interestingly, if we could master the basics of money management then many wealth creation techniques would not be required.

It isnt that easy. Implying that we all should have our money sorted and that managing money is an easy thing to do is simply misleading. For many people, money is a complex subject. Often it is intrinsically linked to self-worth, and self-esteem. It plays a significant part in our lives and relationships, yet we never really discuss it openly with others, except to complain about increasing petrol prices or the price of milk. Sometimes in a crisis, we may discuss the state of our finances, but it is not a topic for everyday conversation.

Not discussing money and not talking about how much we earn is one of lifes long-standing unwritten rules. Society once thought it vulgar to discuss the subject even though it is used to indicate how successful we are. In modern times, most of us continue to keep it privateit is personal, after all.

We dont want to introduce the money dynamic into relationships where it doesnt already exist. However, there is a risk that you may be in denial about how well you are doing financially or, if you are less confident with money, you may believe that money is bigger than you. Both these beliefs are dangerous.

People can feel frustrated and intimidated by money it can even cause anxiety and stress. Many of my clients often complain that, despite earning more money than they have ever earned before, they do not have a sense of getting ahead any faster. The idea of finding the perfect balance between lifestyle and financial progress eludes them. They simply accept this as their current and future reality.

If left unchecked, holding onto misconceptions about money can become like a disease with an extensive reach. The stress of your relationship with money can affect your health and your other relationships, especially your intimate relationships. Whether you have a lot of money or not much, its difficult to escape its reach.

Back in the day, marriage was a financial transaction. Today, marriage tends to be more about falling in love, finding a soulmate and spending more than you should on a wedding. I am all for finding your soulmate, but you need to think about what drives a long-term partnership. Although it can help to have similar money values, it is not critical. I have worked with people across the spectrum, from shopaholics to manic savers. I have worked with a married couple, one of whom was a prolific shopper and the other an assiduous saver, yet because they grew to accept their different money personalities, money wasnt an issue. One of the partners suggested things worked nicelyone of them brought in the money, and the other spent it. It is not common, though, for such diverse money personalities to have so little conflict.

In the above situation, while the acceptance of each others money personality was good for the relationship, little progress was being made towards the couples financial capability. Equally, even clients more aligned in their money personalities can be unhappy with their financial position. The money comes in, and the money leaves almost as quickly. Unfortunately, elevating the role of money in a relationship isnt enough to create sustainable change (although it is a good first step). More often than not, confronting issues can either cause deep frictions in the relationship, or lead to heads being buried deeper in the financial quicksand.

Irrespective of your money values, you have to be able to work together to make sure you are getting what you need from your finances. You both need to be living a life you want and still be on track to achieve your financial goals. Shared financial goals are more important than shared money values.

Many of my clients surprise me, at least initially, with their ambivalence towards money. People tend to take a hands-off approach to managing their money. It is as if they think that somehow everything is going to be alright. As if someone, at some stage, is going to come and rescue them financiallycue Rich spouse with trust fund. For most of us, this wont happen, yet we dont wake up and acknowledge this until retirement is a hairs breadth away. By then, it may be too late.