How many times have you been to the doctor with an ailment – perhaps a pain in the leg, only to be given pain killers? The hope then being, that the pain will be masked, and the ailment may well cure itself (for the time at least).
This is a short fix approach, and a quick solution, but who knows what is being stored up for the long term? What damage is being done by hiding the pain? Pain is generally there for a reason – perhaps to warn you, to make you wary, or to draw your attention to the fact that something is not quite right. Masking this serves you no benefit at all, there is no positive way forward in helping the repair or recovery of the injury.
In the same way that the figurative sticky plaster doesn’t necessarily help repair the broken body, neither does the same work for your finances.
Back in the nineties, when I worked in a bank as a mortgage adviser, I had a customer who could not control their spending. A couple who earned very good money for Cornwall, had a very nice property with plenty of equity and a small mortgage (to start with). The first time I met them, they had amassed thousands of pounds of credit card debt, and asking to add this to their mortgage. Of course, we obliged thinking that it was a one off. 12 months later, in they came again, more debt amassed, and again, asking to amalgamate this debt with the mortgage.
Not long after that, I moved from mortgages to financial advice, and to my horror, when I left the bank a few years later, found that these people were still regularly adding to their mortgage debt – living off the perceived (and now rapidly diminishing) equity.
A similar thing happens where people continually draw on savings without any level of accountability or planning – then when the money has run out, the uncontrollable spending habit is too strong to break.
All that was happening in both these cases, was a financial sticky plaster was being applied – no discovery to the underlying issue, no assistance or coaching to help with the problems which were so evidently arising. They were well and truly stuck in a bucket with no support or understanding to make their escape.
This is where life planning and financial coaching comes into its own. By looking at what is deeply important to you, figuring out how to get there, and being guided along the way, the cause of the financial ailment can be found, required remedy agreed, and then you can look forward to a healthier future.
It may be quicker (and sometimes more profitable in the short term) to find a financial sticky plaster, but it won’t help you in the long term – and that is how to escape that financial bucket.