It's during this time every year when it seems like everyone is more joyous and friendly.
Haloween is a nice segway to Thanksgiving, and after Thanksgiving, before we know it, Christmas is here!
And perhaps your family's Christmas traditions are similar to mine as they involve exchanging gifts, eating food, drinking some adult beverages and spending time with loved ones.
But there is one thing no one signs up for during the holiday season, but it seems to always be abundant…. that thing is bad financial advice!
Uncle Joe says things like “You're too young to invest,” and Aunt Claire exclaims “You will never be debt free so don't try.” But the truth of the matter is this:
We all need financial mentorship in our lives, just not the kind we keep hearing!
Why We All Need Financial Mentorship
Maybe, it's just me, but I can convince myself just about anything in life is a great idea. Like the time I decided that buying a brand new $40,000 truck on a random Thursday in 2014 was a good idea.
Just how the little voice in our brain tells us it's ok to eat the brownie on day two of our new healthy eating kick, the natural human tendency we all must battle is saying no to ourselves.
Which leads to reason #1 as to why having financial mentorship in our lives is vital:
Rule 1: A financial mentor holds us accountable.
It's easy to cheat on your budget, buy the brand new iPhone or splurge a little for your birthday when you're only accountable to yourself.
However, when you know you have someone holding you accountable, it's a lot harder to let yourself off the hook!
I remember when I signed up for a half marathon in early 2019. Knowing the race was just 14 weeks away kept me honest to my training program. I ran 15-25 miles a week for over 14 weeks!
Fast forward to after the race, and I run maybe five per week. Why? because I am not accountable to anything or anyone for that matter!
In addition to accountability, the benefits of financial mentorship that most underestimate is this:
Rule 2: You will get better advice from a financial mentor!
Real quick, ask yourself this question:
Who do you currently and who have you listen to when it comes to financial advice?
In my short 32 years I have come to learn that financial advice comes in many forms but here is where most people receive their financial mentorship:
- Co-workers (If they make as much as you, this is not a good idea)
Now that you know that, keep these stats in mind as you continue to read:
- 78% of Adult Americans live paycheck to paycheck.
- 70% of Americans have less than $1,000 in savings.
- Social security will soon be obsolete and experts predict millennials will need at least 1.5 million to retire.
So in a nutshell, the correlation here is that most financial advice sucks, or we suck at implementing what we hear. Either way, some financial mentorship will go a long way by either:
- Giving you the right advice for you!
- Helping you stay accountable
I can honestly say I never once heard a parent or family member talk about living paycheck to paycheck – I just witnessed it.
I never had a parent or friend say “Make sure you max out your 401K and pay off your debt,” I learned that from my friend's rich friend.
My point in saying all this is that at the end of the day the right financial mentorship in life will get you ahead in life.
Uncle Joe's financial advice won't!
Which leads to the final rule when it comes to finding the right financial mentorship, what is best for someone else isn't the best for you.
Rule 3: You need to have personalized financial mentorship!
Hypothetically, let's say it is January 1st and you want to start a new workout, but you haven't run in five years.
Would you get on the treadmill and do a walk/run workout or what you try to set a personal best mile time?
The sudden jump from neutral to 5th gear is why most people fail to resolve when it comes to their New Year's Resolutions. You probably catch my drift… but when it comes to your personal financial advisor in life, all mentorship needs to be personalized.
Opposite of the general advice you might always hear when it comes to money, what financial mentorship does for you is irreplaceable.
Take, for example, our $300,000 student loan problem.
Many would say refinance and pay the minimums, then take all supplemental income and properly invest. However, the financial mentorship we needed to hear for our personal situation was completely opposite.
For us, we needed to pay down our student loans, because the interest was costing us over $1,000 a month – way more than any investment returns we would be getting in the next five years!
Just make sure whenever you hear any financial advice, you keep in mind that it might not apply to you!
However, now that you know YOU NEED a financial mentor… you might be asking, how do I find one?
How do you find a financial mentor?
Finding the right mentor in any type of mentoring relationship starts with you being what I like to call, “A Fruit Inspector.”
As mentioned, we all need checks and balances outside of our own household when it comes to finances, however, we also have to be mindful of the advice we receive and where it comes from.
However, step 1 in finding a mentor is pretty simple, just follow this logic:
Never take financial advice from someone who does not have the proverbial fruit on the tree.
- A co-worker tells you the reason they have car payment is that (insert any good reason) and now you think maybe a $350 car payment isn’t so bad, don't listen
- A close friend says there is no point in paying off student loans and they are just paying the minimum and now you are questioning whether your goal of debt freedom is worth it – stop comparing yourself.
- If a family member tells you to just take out a personal loan or to consolidate your consumer debt and not to worry about, ask yourself if they have what you want?
Catch my trend?
Always take financial advice carefully. For example, I could pretend to know a thing or two about investing, but the truth of the matter is I don't know squat.
However, when it comes to paying off debt or creating income with a sidehustle – well then I might be able to help, but even that depends on your personal situation.
This leads to the next step in finding a financial mentor…
Find a mentor outside of your parents!
Parent Trap (not the movie)
Parents are typically the number one influencer of most people's finances, political views, health views, and so on (besides ourselves).
As we get older our viewpoints might change or we might do a complete 180 and follow the team our father hates, but most of the time our money habits are innately given to us!
Our spending, saving, and mindset when it comes to money are often derived from our parents.
So when you're looking for financial mentorship, it might be time to look outside of your parents, even if that might hurt a little to consider.
Unless your parents have the proverbial “Fruit on the tree,” when it comes to money, you might need to expand your sphere of influence when it comes to money.
And chances are, even if they have been successful with earning and saving money, the times have changed and their advice might actually be irrelevant in the current digital age.
So here is the steps to finding a possible financial mentor outside of your parents, friends, and family!
Steps to finding your mentor:
Your friends are great and so are your co-workers. But I once overheard a wealthy individual say something along the lines of;
Never take financial advice from your co-workers or neighbors. Chances are they have are in the same financial postion you're in, so how much can they reall help you?”
At the time I didn't truly understand what the person meant, but the more I thought about it, his statement just made sense. If my co-workers and neighbors make the same amount of money as I do, could they really help me level up?
Another way of looking at this is using a sports analogy! Would you rather have an average run of the mill coach teach you how to play golf or say one of the premier golf trainers in the world?
So start your journey of finding a financial mentor by first making a list!
1. Make a direct contact list.
The first step in finding a financial mentor is to make a list of possible people whom you have direct contact with.
For example, maybe a friend's mom or grandfather is super-wealthy. That would be someone you could put on your list – Chris's mom.
- Create a list of as many names as possible of people you could POSSIBLY reach out to.
- Try to make your list consist of at least 10-20 people, the more the better
2. Make a stretch list
Now that you have your direct, or perhaps somewhat indirect list, the next list of possible financial mentors you will want to create should consist of persons with who you have no direct access too.
Perhaps it is a top CEO in your industry or an expert in an area of personal finance you want to know more about. Maybe you want to learn more about the real estate industry, in that case, add the names of the pros in that niche to your list.
This can mean people like Chris Hogan or Dave Ramsey, or even authors like David Bach. Try to focus on creating a list that is big, even if it doesn't seem feasible to reach out to them.
Next, here is how to go about reaching out to a possible financial mentor!
3. Create a gameplan for approaching your possible mentor.
Now that you have your list of possible financial mentors, it's time to create a plan to reach out to them.
Start by circling the top three on your list that you have direct access too. Then, figure out their love language as far as communication goes. For example, if your friend's grandpa is a super-wealthy individual that doesn't text, ask your friend if you can call him one day.
Be sure to reach out and be purposeful with your conversation. Ask them if you can buy them coffee and get an hour of their time!
As far as your stretch list, don't be afraid to reach out to them on social media. Luckily for you, there is an amazing tool called direct messenger that didn't even exist 20 years ago! Use it, the worst thing that can happen is they don't respond!
Don't be afraid to be honest:
On another note, some of us might be scared to open up about our finances to another person. For example,
- Ask someone about their health and they will tell you what they are doing to improve it, how they’re doing this new workout and so on.
- Ask someone about their finances and they will tell you things are great and no they have no worries (Even if they are upside down on just about everything related to money).
Keep in mind that being honest and open with your mentor about your finances is vital to them giving you the most accurate advice for your personal situation.
Without accurate information, it is hard to mentor someone. Which leads to the final point in finding a mentor, be sure to:
4. Add value to the mentor!
Be sure once someone agrees to mentor or coach you, that you add value to the relationship on your end too!
Don't take their time for granted. If they agree to mentor and help you, make sure you follow through on your end with their requests. Case in point, if they say to lay out all your financial statements when you meet up, don't forget or show up unprepared.
That is a great way to lose financial mentorship in a hurry.
On another note, a true mentor knows that they had success in their life because others helped them too. Chances are the right mentor and you will click. The biggest tip when finding a mentor is this:
Don't be afraid to reach out and ask for help!
For more ways to find a financial mentor, here is a great resource from Money Under 30.
Don't pay for a financial mentor.
On a side note, when it comes to finding a financial mentor, paying for one isn't necessarily a good or bad idea, but chances are – you shouldn't be paying.
As a general rule of thumb when starting out on your quest for finding a mentor, be sure to avoid the “Mentors for hire.”
For one, sometimes like those online custom workout plans that are sent to every person on an email list, financial mentors for hire typically are not specific enough.
Only when you start reaching the higher-level financial type stuff (For example you're investing thousands of dollars at a time or buying multiple real estate properties) should you consider paying for mentorship.
The best way to sort out a financial mentorship scam is if it's something you must sign up for and pay, hence why you should tap into your power base/network anyways!
Final take on financial mentorship!
Want to know the biggest offering a financial mentor can provide you?
A Birds Eye View
The real meaning of a mentor, “An experienced and trusted advisor,” is someone who has accomplished what you're hoping to accomplish. They are someone who can give you a birds-eye view from the top of the mountain you're proverbially trying to climb.
Finding the right financial mentor can help you figure out many answers to all the questions you might have that involve money such as:
- Want to start a business? Find a mentor.
- Want to get better with money? Find a mentor.
- Looking to pay off your debt? Find a financial mentor.
The word mentor is highly overused and even more misunderstood. A mentor is someone who can give you the advice you need because of the experience they have.
Aside from marriage advice, when it comes to money, a financial mentor is probably the most important mentoring relationship you can have. Just be sure to keep these last few things in mind:
Final thoughts on financial mentorship:
Q: Do you have someone you listen to when it comes to money?
Josh writes about ways to make money, pay off debt, and improve yourself. After paying off $300,000 in student loans with his wife in less than five years, Josh started Money Life Wax and has been featured on Forbes, Business Insider, Huffington Post, and many more! In addition to being a life-long entrepreneur, Josh and his wife enjoy spending time with their newborn son, their chocolate lab named Morgan, working out, being outside, traveling, and helping others with their finances! In case you were wondering, Josh uses Personal Capital to track his net worth and his first investment account ever was an Acorns account 😎