Money talks – so learn the language of finance in 2023

The dawn of a New Year is always a time for reflection and often involves making declarations about improving our lives.

“This is the year I finally make use of that gym membership.” “This year, I’ll make sure to spend more quality time with the kids.” And if the popularity of Duolingo and other such apps is anything to go by, “this year I’ll commit to learning a new language.”

Why not also make 2023 the year to focus on the language of finance?

Parlez-vous financial security?

We’re going to assume you know a little bit about finance.

After all, you’re reading this blog. So you’ll feel confident that you understand at least the basics of how investment funds, pension rules and tax allowances work.

We’re certain that if you really put your mind to it, you could spend a few afternoons researching some options, come up with a rough investment plan, and then pop some money into an online ISA or pension.

And we know that if you can do all that yourself, then a financial adviser might feel like an unnecessary extra expense.

But it’s not as simple as that. Because like learning a new language, the grammar of finance is more subtle, and isn’t something that comes naturally to everyone.

Which is an issue, because financial fluency can be the difference between retiring at 70 and rationing your Werther’s Originals in front of Countdown, and semi-retiring at 55 to devote your time to your passion projects and family.

Make the most of your time in 2023

If you already know you can’t commit a few hours a week to learning some basics and then a few hours each month to overseeing your financial plan, then DIY financial planning isn’t for you. Simple as that.

I’d also be wary of DIY-ing if you know you’re susceptible to mainstream or social media “noise”. Every crisis of the day will tempt you to make decisions that’ll end up sabotaging your financial plan. It’s extra risk and stress that’s just not worth it.

It’s also generally hard to know which resources to trust although there some reliable ones out there. The MeaningfulMoney YouTube channel has almost a decade of solid guidance for you to pore through, and financial planners (including Arkenstone) create blogs designed to make things clearer for you. But again, you need to invest time in reading, watching and understanding.

Oh. One more thing. You can’t actually start making financial decisions until you know what your goals are!

You wouldn’t learn a language on a whim

Think about it. You wouldn’t buy a year-long gym membership, then decide on your second visit whether you wanted to lose weight, build muscle or train for a marathon. And you wouldn’t start learning a language before choosing where in the world you want to use it.

So you can’t make financial choices until you know your goals.

That means having a clear idea of what you’re about and what you want for your future. And there’s no point setting goals that aren’t truly meaningful to you. Because when human beings don’t believe in their cause, they’ll abandon all plans at the first sign of a crisis.

Setting goals is probably the hardest part of financial planning, so if you find you’re struggling, focus on what you don’t want for your future.

By defining what you want to avoid, it’ll help you work out what you do want e.g. I don’t want to end up having to work as long as my parents / find myself in the same financial position as so-and-so, etc.

Define and prioritise those goals and you can then start to make decisions to ensure you have the right money in the right place at the right time.

Easy right?

The French call it paralysie de l’analyse

Analysis paralysis. It’s what happens when you have all the information and just can’t take that first step towards using it. You’re afraid of change, so you’re afraid to start changing. You’re worried about making mistakes. And you’re all-too-aware that with nobody else offering expert opinions, you don’t know what you don’t know!

All that time spent, and you’ve fallen into that common trap of losing confidence at the last second.

It’s what can happen when you’re the only person accountable for your future. You freeze.

At this point, your only choice is to feel the fear and do it any way.

Or if it’s all too much, you could ask for help. You could free up all that extra time to hit the gym, spend quality time with family and  – yes – fire up Duolingo and sharpen up your French by asking for help.

An expert financial planner will challenge the beliefs that make you over-cautious or over-confident. They’ll fill in any gaps in your knowledge of investing, tax and pension rules (so there’s no money left on the table, and no unexpected surprises from the tax man). And they’ll be diligent, focused and proactive because you have accountability.

Yes, there’s a cost, but it’s an investment that provides not only financial gains over the years but something even more valuable. Your time.

So in 2023, you could learn the language of finance. Or hire a native speaker and focus more on your family, your passions or your career. Time well-spent that will pay you back in spades in the long run.

In the end, whether you decide to go it alone or work with an adviser, don’t let another year slip by – just take the plunge.

Life’s too short. Doing something is always better than doing nothing.

Wishing you all a very Happy New Year and all the best for 2023.

Simon Ben-Nathan