I met with a client recently who was grappling with the following issues:
1. Wanting to refinance her mortgage to roll in current debt so could streamline her cash flow.
2. Could not do her refinance until her taxes were completed.
3. Could not complete her taxes until her business books were done (by her accountant)
4. Was soon to leave on a trip for a month to work on new joint venture (business) that might lead her to move to his new location.
5. Her heat & hot water was not working and was having difficulty getting it fixed. (all in one system).
6. Had a couple set to house sit, but was worried about the no heat hot water issue.
7. Was concerned about maintaining payments on current debt until item #1 was resolved.
a. She was thinking the “cost” of the loan was the entire monthly payment. Did not register that the monthly payment was mostly principle and a small portion was interest.
b. She was feeling that due to this she should sell some investment assets to pay off her debt.
c. She was concerned that if she did 7b above, it would jeopardize her financial future.
8. Wanted to be able to relax, enjoy her month long trip, focus on new business venture and relationships in new location.
A Long list! Lots of unresolved issues… This is a great illustration of how your finances can really impact your personal planning, thinking, and movement towards success!
Thinking might go like this:
· I leave on my trip in 5 days.
· I need to resolve my debt situation,
o But can not deal with refinance of mortgage till I get my taxes done.
§ But I can’t do that till I get my final figures from my accountant.
· Cash flow is tight,
· How should I deal with my heat/hot water situation?
o If I move to new location is it worth putting in a new system, or should I just get a fix?.
· How can I leave with no heat for my house sitters?
· How can I clearly focus on my new opportunity with all this bouncing around in my head?? (Key issue!!)
This is what I call “Mental Pinball”.
The visual is the metal ball bouncing back on forth between the bumpers, going faster and faster, dinging and pinging, basically making you NUTS!
The usual result is to just walk away from any decisions. It is just too difficult!!
So what can you do?
Luckily in this case my client already had a clear vision we could fall back on to create focus. (see this post for more detail). The Life Business™ approach is to have a clear vision of each area of your life and what a successful implementation would look like!
I then worked with her to clarify each of the items above on an individual basis, keeping the primary focus as our guide, a successful trip.
She was not allowed to add a “yeah, what about item #2 when we were discussing item #1. Each one was solved on its own merits.
For example, once I explained she was not flushing her $500/month debt payment down a hole, that it was roughly $475 in actual debt repayment, and $25 in interest (she was thinking it was all interest!), we could let that one go until her taxes, and refinance were done)
We discussed that the 20 something year old couple that does house sitting is probably not as effected by potential North Carolina “cold” for the month of March as my client is. (she is in her 70’s!) She agreed, this made perfect sense.
We agreed that it was important to get the heat/hot water fixed, but not do a rip out, new system at this time. This made no sense as was not yet warranted, and she might sell the house in 3-6 months IF she decides to move to location of new business venture.
And on we went, one at a time. Methodical, logical, focused on reaching the end goal that was most important to her, focusing on and enjoying and creating the opportunity to get her desired results from her trip in March!
We looked at her cash flow, her assets, and agreed that it was ok to spend an additional $ 500/month for the next few months until all the issues on her list were resolved. This would not be a hardship/burden to her situation, and she did not need to liquidate assets to meet cash flow and/or pay off her debt. (This would have been a huge error).
She left our meeting with a spring in her step, knowing she had a clear game plan for how to get the most out of her trip, how to deal with each item on her list, and how to calm her mind when the ball started to bounce quickly and noisily from one bumper (decision/question) to the other.
Peace of mind is a wonderful thing!
Jerry Bergner is a productivity and life satisfaction coach. His company is Integrated Life and Financial Planning. Jerry has been coaching since 2008. His sweet spot is working with business owners and salespeople to assist them in focusing on the activities they enjoy and love to engage in while increasing their results and overall satisfaction at the same time. Contact Jerry to book a consultative strategy session to learn how he can help you work toward your goals.