“As it turns out, personal finance is like touching an electric fence that you didn’t know what electric. Managing our money is not a math problem; it’s a behavioral problem.”

Carl Richards is a Certified Financial Planner™ and creator of the Sketch Guy column that appeared weekly in The New York Times (2010-2021). There, he used simple illustrations to introduce calming financial advice and counsel. He is also the author of The One-Page Financial Plan and The Behavior Gap resources — a book, website, and podcast that provide simple ideas to help us “Stop Doing Dumb Things with Money.” Carl’s goal is to demystify financial planning by focusing as much — or more — on the humans it serves as it does on the numbers.

 Topics discussed in this episode include:

• The crash of the housing market in 2008.
• The psychological underpinnings that influence money management.
• Using a tree as an analogy for financial counseling.
• Carl’s sketches as “shortcuts” and “souvenirs.”
• Simplifying the complex world of money management.
• “Conversation grenades.”
• Why Jeff focuses on curiosity.

Takeaways:

• If you want to understand money management, start by understanding fear and greed.
• When we talk about return on investment, emotional balance sheets are just as important as financial ones. The line between financial planning and therapy is super thin.
• Making the complex simple in terms of money management starts and stays with an unrelenting focus on one’s goals.
• Simple line illustrations can be used to engender problem-solving conversations outside the worlds of finance and money management.

 Links

• https://www.linkedin.com/in/thinkingcarl
• https://twitter.com/behaviorgap
• The One Page Financial Plan

“The Behavior Gap” resources

• Behavior Gap Radio (free site)
• The Behavior Gap website
• The Behavior Gap book