Cash flow planning in times of temptation

Finding it hard to follow your cash flow plan around friends and family?

Unless you explain why you’re managing your cash flow and how it works, you could quickly feel ostracized should others scrutinize your approach.

It’s common for people to work with planners, and you don’t need to share that you’ve bought a new mutual fund or insurance policy with anyone other than immediate family members.

While you’re managing your cash flow, however, you may have to dramatically change how you spend your money and live your life. If your friends and family have expectations of what you should do with your money, you’ll have to stand by your cash flow plan.

Below are two ways you can accomplish your goals without having to struggle with peer pressure.

1. Prepare for conflict. Consider a situation where friends are pressuring you to go off-plan and spend. You might be asked to go on an expensive trip, for instance, or be expected to order a bottle of wine at dinner or pick up the tab. To develop a response, role-play to work through the scenario. Have your advisor or someone else you trust take the role of your friends. 2. Learn to explain your plan. After role-playing, determine whether you need to better shape your responses. You might be tempted to simply say you’re on a budget or to become defensive, but the following response style would be better: “We’ve rearranged our financial priorities and are focusing on saving for our trip to [insert name of awesome tropical destination].”

It’s much easier for you to follow your cash flow plan when you can effectively resist temptation.

Stephanie Holmes-Winton is a Halifax-based financial services educator and speaker.