Science and Art

When people rearrange income and expenditure through automating their banking a couple of wonderful things occur.

Where once anxiety prevailed with stress the outcome, a calmness comes over financial management because a sense of control dominates.

This one single act of financial planning is the catalyst for all that follow.

The second result which magically comes out of income and expenditure control is that surpluses begin to appear where once only deficits were the norm.  These phenomena are as equally effective for young as for old because no one demographic of age or gender or occupation is more efficient than any other – including all cultures.  They share similar habits brought about by the effectiveness of banks to facilitate and manipulate options and choices for spending and saving.  The savers convince themselves they are saving when they are really simply spending out of their savings accounts and the spenders convince themselves they are really not spending because they have surplus left in their revolving credit facility or credit card limits.  A rationalisation which has taken years of practise and many hours of self delusion.

Peoples net worth position gives them away, especially when housing inflation is stalled or reversing such as has occurred in Wellington over the last few years.  Whilst a period of low interest rates has enabled consumerism to continue post GFC – for those with debt, retirees on the other hand have been struggling because their savings yields are down.  Automating income and expenditure through a banking structure is not hard to initiate but it takes about three to six months to bed in – a little like preparing and planting a garden because you want to eat your own fruit and vegetables.  The benefits of which are seldom experienced in the short term – apart from the positive affect on your soul and the taste.

Most banks and well meaning budget advisers including mortgage providers proffer software analysis for self help financial analysis. Like sun tan, it’s seasonal.  Only the very disciplined or the very mean can budget.  For the rest of us, temptation is too great and our strengths this month are sorely tested by our external influences next month.  And so the cycle goes on.  For most people this process lasts forever and it has a great deal to do with social inequality, poor family relationships, chemical dependency, medication, ill health and violence.  Surveys show that money worries are the leading cause for much of the breakdown of home and work harmony and peoples tendency to anxiety and stress.

The answer lies in human intervention and interaction not in science and medicine.  Just as mental illness is best served through peer understanding and rapport rather than locked doors, shock treatment and mind numbing drugs – so to, financial well being.  Good health and fitness is not dissimilar – when we measure we can manage but just turning up to a gym, leaping onto a stepper and doing sessions repetitions will not last.  It takes intervention from a personal trainer that takes an interest in your objectives and results that ensures a better than even chance of long term success.  The same happens in schools and churches.  It’s the personal touch which makes the difference in our lives.

In each instance there will be a template.  A set of principles which form the foundation for growth and development.  Knowledge, religion, health, relationships and money – it’s the guidance from a mentor or minister which turns a science into art and it is emotion which will determine how we will ultimately act or react.

That’s why budgets don’t work.  They lack emotion.  Whilst scientifically exact they are emotionally void.  They require people to record them, monitor them and action them – humanly impossible for most, over a protracted period of time especially if the benefit is some abstract goal of ‘surplus’

Back to the template and the science of controlled banking surplus.  The answer lies not in the structure although it is integral to the outcome, but in the rationale and the desire for an outcome (a lifestyle) which is superior to that being experienced.  In other words – measurable improvements and achievements which are emotionally satisfying.  Some can manage that on their own I’m sure - but after 40 years of asking and interviewing I haven’t met anyone who has that strength of character and discipline, but I’ve met and enjoyed the company of lots who like me enjoy interdependency and accept guidance in critical areas of life.   Which for me has been advising people about how they can secure their financial futures. 

Financial Planning is a calling and I am privileged to have been able to make it my lifes work.