My friend Taylor and I were talking recently about why folks seek out financial advice, and he summed it up like this: "They want to feel like they are making the most of their money."

At first blush, it sounds like our job is to help people make more money, but that's not what he meant. Everyone wants to know that they're making good decisions with their money, that they're not missing out, they’re not exposing themselves and their families to undue risk, and that they're not being taken advantage of.

Taylor went on to explain that making the most of your money involves balancing three skills:

1. Knowing what to do (technical skills)

2. Actually doing it (behavioral skills)

3. Puting it towards the life you actually want (spiritual skills).

(See Personal finance is simple, but hard — Taylor Stewart)

Actually doing these three things is hard, and not in the way the way that much of the financial industry tries to sell you.

How the financial industry markets

Financial industry marketing tends to focus on our special technical knowledge and often only deals with behavioral topics on a superficial level (e.g. “if only you would stop buying lattes!”). We tend to follow a simple script: you have a complicated money problem, and only we have the know-how to solve it. Whether it's an investment manager claiming they can beat the market, a tax service promising the biggest refund, or a complex insurance product that’s touted to remove all downside risk. It’s a well-known playbook, and it sells.

There's also an unquestioned assumption that more money is everyone’s chief goal. Yet, as most of us know (though we often forget), money is just a tool: a means to an end, not the end itself. Like a hammer, money can be wielded in both effective and ineffective ways, depending on your skill and temperament. The same basic tools can be used to create a wide range of projects. But unlike shipbuilders following engineers’ blueprints, we’re largely building the ship while sailing it!

That’s why it’s so important to start with the last of the three skills that Taylor mentions, what he calls spiritual skills. These are not necessarily spiritual in a religious sense, though it could be. More broadly, we’re talking about your financial purpose.  What is it that gives you the most meaning and joy in life? How can we use your resources to get closer to that ideal?

Limited Resources

We all have limited resources, and not just in a physical or monetary sense.  Our time, money, energy, and attention are the primary personal capital resources we have to work with. It’s not a zero-sum game, but investing our capital toward one goal often means we’re diverting it from another.

For all of us, our time is perhaps the scarcest resource of all. And while money “can’t buy me love,” one thing it can be spent on is time, whether it’s a babysitter for a much-needed night out, an emergency fund that gives you the time to recover from illness, enough savings to leave a job that’s draining you and the time to find a better fit, or the ability to retire while you still have the energy to pursue your passions and keep up with the grandkids.  

Financial Purpose

I try to begin every client relationship with a discussion about these big-picture goals and values. It’s remarkable how often the ability to control one’s time appears in these statements of financial purpose.

Here are several real examples:

“Focus on making more time than money. Value experiences over things.”

“Bless our children, our community, and our church. We do not want to be in love with money. We value time to deepen relationships over money.”

“We want to be the house where friends and neighbors gather and have the freedom to pursue meaningful work without worrying about money.”

For me, the key to making the most of your money is to start by getting clear on what you value. Unlike a company mission statement created on some corporate retreat and then relegated to a seldom visited page on the website, clarifying and applying your values is an ongoing endeavor. It’s too easy to get lost in the technical minutia and the emotional pull and tug when dealing with money decisions in real life. We must repeatedly remind ourselves of this purpose and what gives us joy instead of temporary amusement, appeasement, or distraction.

Lest you think I have some special knowledge here, I must confess that I need to hear this message repeated just as much as anyone else. Sometimes, it’s just too easy to keep climbing the ladder, peering into the neighbor’s garage, or curating the trappings of success.

I’m the chief of sinners!