Know when to discard your financial playbook

I recently gave a talk and much to the attendees' surprise, money was the peripheral, not primary, topic. That was not necessarily my intention when I started out, but as the poet Antonio Machado points outs in his poem "Traveller, There is No Path":

Traveller, your footprints

Are the path and nothing more;

Traveller, there is no path,

The path is made by walking.

This is a critical point when it comes to our money and why I worked it into my talk. We think that if we do everything right, whatever right is, things should turn out as we expect. But then life happens and we realize that our path is made by walking — the playbook gets discarded and we have to figure things out anew.

The tighter we hold onto our plans, the more likely they fall apart. This doesn't mean preparation is not useful, it just means that we have to prepare differently.

Choices always lead to two things — outcomes and conflicts.

If you want to increase your chance for outcomes that are more consistent with your values, planning helps. But planning needs to be comprehensive.

For example, one of our clients is trying to determine how much money they want to give their kids. The first choice is to choose representative language — give the kids rather than help the kids. The path is made by walking, not necessarily clearing the path. And is it really a gift? If you create conditions for it, then it is a contract.

The second choice is how much. If you are providing assistance for something that makes you more comfortable — making sure that they have health insurance, for example — then that may determine the amount.

If you want to give enough to make their life easier, then be careful what you wish for. If your child is coupled, how does their partner feel about the money coming in?

Most people have a different mind-set around bonus money rather than salary — your kids are probably no different.

The fourth choice is if you commit to an annual gift, how do you give it? If you give it monthly, the children are likely to include it in their cash flow. If you give it annually, they are likely to spend some of it on indulgences.

There are many more choices in what is a seemingly simple act, but the single most important thing to answer for yourself is why are you wanting to do this. If you can define the why, the hows tend to be straightforward.

Our conflicts around our choices tend to be fear-related. We save because we worry we won't have enough tomorrow. We may spend because we feel we have an image to uphold or we think it will bring happiness. We are reluctant to give because we don't believe we will be safe.

All of these choices are about our relationship with money. If we want to make better choices, then we should work on how our relationship with money serves us and how it harms us.

Today, like every other day, we wake up empty

and frightened. Don't open the door to the study

and begin reading. Take down a musical instrument.

Let the beauty we love be what we do.

There are hundreds of ways to kneel and kiss the ground.

It doesn't mean throw up your hands. It means there are hundreds of ways to kneel and kiss the ground. Don't get trapped by thinking you have to get things right.

If you get things more right than wrong, the path you make by walking will be toward happiness.