Pete the Planner: Why your personal finances are not really that personal

Personal finance is personal, as the saying goes. But recently I realized that idiom isn’t exactly true. Well, at the least, it doesn’t tell the whole story.

While I usually don’t talk about my day job in this column, I’d love to share some things I’ve learned as the CEO of a fast-growing fintech company and how those lessons are applicable to all of our personal finances.

The magic word is stakeholders. Not shareholders, although shareholders are certainly stakeholders. Stakeholders. My job as CEO is to understand the needs and wants of the stakeholders, find alignment and navigate the waters as waves of imbalance constantly knock the needs and wants of the stakeholders out of alignment. It’s one of those jobs you don’t realize is your job until things get out of whack.

A stakeholder is any person or entity that has an interest or concern in the direction of an enterprise. For my business, this includes employees of the businesses we serve, their employers, my co-workers, our distribution partners, our community, our investors and our board of directors. And I’d be doing my college philosophy professor an injustice if I didn’t also mention the greater good, a concept developed by 19th century philosophers Jeremy Bentham and John Stuart Mill.

It doesn’t take a conspiracy theorist with a fresh batch of red string to see how quickly some of these parties can find themselves on the opposite side of an important issue. But that’s where my role becomes important. My job is to create an environment in which we can all row in the same direction. A CEO can fail spectacularly when they don’t understand this and then get a tad too much credit when things go well. CEOs might be the composers, but they still need musicians to play the right notes.

If I get tunnel vision trying to serve a particular stakeholder, I can easily alienate others and send the entire mission off track. Sound familiar? Our personal finances aren’t terribly different from this.

To even begin to understand how this stakeholders principle applies to your personal finances, we need to take a moment to identify the stakeholders of your personal finances. The list is so much bigger and more complex than you might think. First, you’ve got you and every member of your current household, including your pets (I’m not kidding). Don’t forget the people you don’t live with anymore. That massive list includes your parents, grown children, ex-partner(s), co-parent(s) and a smorgasbord of other people in and out of your daily life. And now for the tough ones: your past, your present and your future. Of course, if you’re so inclined, you can add some other elements such as your God (respectfully), your community and even the greater good.

If the above list increases your blood pressure, welcome to the club! Your inclination is to try to dismiss some of these parties; however, that’s where your future problems begin.

You need to take time to inventory the wants and needs of all parties involved. It’s unlikely you’ve done this in the exhaustive manner required. Ultimately, you must decide how to deploy your financial resources (time, money and attention) to maximize the outcome for each stakeholder. Honestly, it’s overwhelming. But that doesn’t mean you shouldn’t try.

What you will find is, you’re likely working against your own self-interest of maintaining stasis. Clearly an eye-opening revelation if you believed personal finances were simply personal.

I believe the best way to handle a desire for balance is to do the work to unearth both the expectations and realities of your stakeholders. Do your best to step into their shoes and view the relationship from their perspective. How do your decisions impact them? And how does that change the trajectory of their reality?

Again, this is not an easy task. What’s even more challenging is knowing you’re still going to get it wrong from time to time, no matter how much you try to adopt the perspectives of others.

Your personal finances are personal, but they are also personal to all the other stakeholders in your life. That’s the rub. That’s why it’s so darn hard to find balance. This is why parents support adult children too long, why some couples find themselves seeking a divorce and why the pleasures of now usurp the funding of your dreams for your future.•

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Dunn is CEO of Your Money Line powered by Pete the Planner, an employee-benefit organization focused on solving employees’ financial challenges. Email your financial questions to askpete@petetheplanner.com.