Anyway, in my youth, I did not have any interest in finance, personal or otherwise. That changed in my early 20s when a bankruptcy shocked me into reality. I decided I needed to pay attention to my own finances. However, I found personal finance is often presented in an overly complicated manner. I just want it to be simple (like me).
Now that I have five grandchildren, I am back to watching cartoons — mostly because my grandchildren have completely commandeered the television set in my house. During one of those brain-numbing sessions, I discovered the most profound financial advice was right in front of my face. Dora the Explorer taught me everything I need to know about financial planning.
Here are five easy steps that appear in each episode:
Step 1: Have a goal
Every episode begins with Dora receiving an assignment. Somebody needs help. The assignment is her goal. Once she decides she will take on the task, she enlists the aid of her closest confidant, Boots the Monkey.
Too many times people are focused on just accumulating a pile of money without looking at what the money is supposed to do. Start your financial planning by identifying your end goal(s). Your goals might include such things as setting a path for your career, establishing a secure retirement, getting out of debt, or buying a car. During this time, consult with your friends or family to gain their buy-in, support and encouragement. Do not try to do it alone. Even the Lone Ranger had Tonto.
Step 2: Make a plan
Dora then establishes a written plan. She uses the map in her backpack to set out the steps she must take to her goal. It is always a simple plan. There is the final destination with intermediate stops along the way.
Map out a plan to meet your financial goals. Be specific and put it in writing. Use a systematic approach to decide what the intermediate goals are along the way. First A, then B. Dave Ramsey is the master of this, using baby steps to get people out of debt. People may argue whether the optimal strategy is first paying debts with low balances or low interest but in the end, what matters is paying off the debts. Keep your steps simple. Also, don’t try to achieve all your goals at once. Dora has an entire season to work on her goals one at a time. You have your entire life to do the same.
Step 3: Ask for help
You too should seek out help from those who have specialized knowledge, skills or experience you need. This can be as simple as reading blogs or listening to podcasts. At the other extreme, you could hire someone to help you. Always remember the purpose of helpers is to assist you in making decisions. Keep in mind the roles. They are the advisors but you are the explorer. Be careful to never abdicate the decisions about your finances to someone else. It is your financial plan we are talking about and no one cares about your success more than you.
Step 4: Watch for those who will frustrate your plan
You will find lots of people out there who want to ‘help’ you with your money. Many advisors are not required to operate with fiduciary trust. That is, they are permitted to advise you into a product that will earn them a commission but may not be in your best interest. Dora knows Swiper when she spots him. Who’s your Swiper? Someone selling ‘secrets of the rich’? Insurance salesmen pitching confusing products? High priced brokers? Relatives who tell you investing in stocks is too risky? When you spot them, say what Dora says: “Swiper, no swiping!”
If you watch enough episodes, you’ll discover that despite Dora’s best efforts, sometimes Swiper is successful at swiping. When that happens to you, follow Dora’s example. Dora does not give up, but she keeps on toward the objective with a new intermediate goal of recovering what was swiped.
Step 5: Review your journey
When you achieve your goal, reflect on what went well and what didn’t. If everything did not go as planned, do not be discouraged. Just as Dora returns each week with a new adventure, you have an opportunity to start over from wherever you are today.
Through it all, Dora demonstrates excellent character qualities that will help you along your path. First, she is always optimistic. She sees every adventure, not as a problem, but as a challenge that she can overcome. Pessimists are focused inwardly on the obstacle, but optimists are focused outwardly and often discover an inventive way over or around the obstacle. Finally, Dora is always grateful. Always be thankful to those who helped you along the way and be generous in sharing your successes with them. You wont hear Dora utter the pronoun “I.”
At the end of the show, she celebrates her success with this song: “We did it! We did it! We did it! Yaay!”
Follow these five steps and you’ll be well on your way to financial health.
Bonus tip: It never hurts to be bilingual. Dora says: “Finanzas es divertido!“*
* Finance is fun!
About the Author: Timothy Hoff retired from civil service after a 35-year career in federal government contracting. He is currently an adjunct professor at Bellevue University in the College of Business. He has an interest in personal finance, spurred on by some massive failures early in his life and fed by a constant barrage of financial podcasts. His grandchildren introduced him to Dora the Explorer.
Photo Credits: Nickelodeon Studios