Tuesday, October 30, 2007

financial confidant

Making the rounds of the personal finance blogosphere today is the question “Do you have a financial confidant?” It’s an interesting question, because while I don’t really have one, I feel like I end up being one pretty frequently.

I’ve been pretty transparent about money in my own life for as long as I can remember. Part of that is probably because I’ve always been good with money and I’ve been working since I was 15, so I’ve been handling money for a long time. For example, many of my friends, including my roommate, know exactly how much money I make. My boyfriend also knows how much I have in savings and investments (and I know what he makes and his net worth). My parents know how I’m doing; I was so excited at my first job that I told my mom exactly how much I’d be making and she said it was more than her! I don’t know if we’ve discussed it since then, but I’m sure she knows it’s going up. My dad asked me point blank, and was shocked—he expected it to be double or more what it really is, which irritated me. Both of them know that I’ve been completely independent of them since college.

Almost everyone knows how much my rent is—it’s sort of a pastime in New York to talk about how much you’re paying, whether you got a good deal, if you had to pay a broker’s fee. My coworkers all likely know the range my salary is in, though I think I’m at the top end of theirs. Everyone knows that I also freelance on the side for extra money, and I’ve given explicit information for getting involved to some people. Most people know that I’m very interested in personal finance, though none of them know about this blog.

But to me, “confidant” implies someone whose advice I seek, who I go to with problems or goals, perhaps for accountability, or otherwise someone with whom I’m sharing information I keep from others. I don’t have that. And I don’t know that I’m terribly interested in finding someone to fill that role.

I gather a lot of information online, from books and radio shows, and from a meeting with an investment advisor at Fidelity when I rolled over a 401k, and then I compile it and try to make sense of it in my own life. I’ve developed systems for tracking my goals, my spending, and my budgeting success, and generally find that this process works very well for me. And I seem to be doing ok, for my age and station in life. I guess because of all that, people have started coming to me for advice, and while all I can give is the experience of “this worked for me” or “I’ve read that…”, people seem to find that sufficient.

My roommate, for example, has asked me for help with learning to budget and figure out how to live on her own (she moved out of her parents’ house into our apartment, and had never been on her own before, whereas I’d been on my own for about six years when we moved in together). She sees a personal finance coach as well. My boyfriend asked me for advice when negotiating his current job’s salary and in dealing with taxes and benefits. We have wildly different styles of managing money but the same basic philosophies—debt is bad, do what you love and the money will follow, be self-sufficient. My sister and I talk about money, in large part because our parents are still helping her out a little financially and she feels bad about this for a couple of reasons. My best friend and I talk about money, especially because in the last year our lives veered in such different directions that we now have different goals. I’m learning from her about money and parenting; things I never much cared about before I suddenly see the importance of (like affordable health care for pregnancy, birth and early childhood as well as buying a house). My ex-boyfriend would not take my advice (or anyone’s, for that matter) even when he asked for it and how his life is turning out is evidence of that.

Are financial confidants necessary? Maybe for some people, or maybe for some situations, or maybe for some specific issues. I certainly wouldn’t rule one out when contemplating a big purchase or dealing with a windfall or something like that. For now, I’m ok, and I don’t mind being the one people come to. It forces me to be more transparent about my own situation—I can’t very well give advice while cloaking my own choices.

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