Money - It has got nothing to do with numbers really

Put the latest statement for every account you have in front of me and I still won’t be able to tell you what’s good, bad or useless to you. It is about so much more than the numbers.

The amount of money, debt or insurance you have is useful to know, but this information doesn’t speak of your ambitions, concerns, the expectations, behaviours and attitude you have around money matters.

Recently I met a woman in her early 30’s who is enjoying a seriously awesome career. She owned a city apartment, enjoys a great lifestyle and is saving for the future.

When we ran through her outgoings, she was paying some hefty premiums for life insurance. I asked why and she told me a heart-breaking story about losing her dad unexpectedly at age 40. He had no life cover and the family faced severe financial hardship. At 13 and 15, she and her sister had to go and live with an aunt which was unpopular with her teenage boy cousins. The change of school and disruption to exams, the pitying gazes of well-meaning people and the resolution she made to protect her family against this horrible situation.

I felt her trauma.

The process of financial planning gradually revealed where her personal risks lay. She didn't need life insurance because she has no financial dependents, however, her lifestyle was dependent on her being well enough to work, so if her health let her down, she needed a plan B and so we arranged some income replacement cover.

She eventually agreed that she would donate the money she was spending on unnecessary life insurance to a charity that helps bereaved families. This addressed her resolution to take action to protect vulnerable families even though there was no risk in her own family circumstances. In fact, since researching a charity that would help families navigate the traumatic experience of her childhood, she has become a committed volunteer for them as well as donor.

She tells me she gets more from it than they do.

Financial Planning helps identify real personal risks, but it also helps provide reassurance when historic trauma is having an unhelpful influence on decision making. Powerful stuff.