We on the Globe and Mail personal finance team have our favourite contacts – the people we like to talk to the most because they offer value for our readers in clarity, insight and integrity. One of these people is Shannon Lee Simmons, a certified financial planner (CFP) who has been quoted in stories and interviewed on the Stress Test personal finance podcast for Gen Z and millennials. Ms. Simmons has a new book out – No-Regret Decisions: Making Good Choices During Difficult Times. On the basis that we’re living in difficult times right now, I invited Ms. Simmons to do a Q&A. Here’s the exchange we had by e-mail:

Q: Your new book is called No-Regret Decisions – what are the decisions that have caused your clients the most regret?

A: Panic-based decisions with high emotional and financial stakes. Sometimes, this is a home purchased, a home sold. A layoff, a job taken, a business started or ended, the handling of an inheritance, you name it. It’s not really about the nature of the decision or how it turned out that causes regret. The regret always stems from the fact that someone isn’t proud of the reasons they made they choices they did when looking back.

Q: We live in a time of extreme precariousness driven by the pandemic, expensive housing, soaring inflation, surging interest rates and probably a lot more stuff. What’s your best advice for helping people make calm, rational money decisions in these times?

A: Don’t make a panic-based decision. Find a way to pull yourself out of panic mode so you can think clearly, see options and make a decision that future you won’t regret, regardless of how things turn out.

Q: How much of our anxiety about making financial decisions is felt in relation to the fear of disappointing other people, of missing out on the great things they seem to be doing and not matching their status?

A: A lot, and I think that’s normal. Being good with money is actually just about spending less than you make each month. That’s easy math. The hard part is navigating the emotions behind what you earn, where you spend and the decisions you make every day. We are human. Our social community means so much to us. So, we don’t want to disappoint people and we don’t want to be left behind or not fit in with our community. This is biology at work, not poor willpower. It takes immense work to feel confident enough to say no to social obligatory spending or to not try to keep up.

Q: I like the idea in your book of setting micro-goals – it’s a comforting idea when long-term goals like home ownership and a fully funded retirement can seem out of reach. What might a micro goal be for a household that bought a house not too long ago and is struggling to keep up with rising mortgage payments and inflation?

A: Focus on living paycheque to paycheque. The biggest goal is to not go into more debt if you can help it.

Q: You discuss the idea of decision predictability in the book – choosing a course of action that gives you control, or at least the feeling of control. Can you tell us how you help clients make decisions that help them feel like they are taking control of their finances?

A: Breaking down what we can and cannot control is important. Stock market returns? Not in our control. Interest rates? Inflation? Housing and rent prices? Nope. So, focusing on what we can control comes down to the day-to-day financial decisions we make. How much to spend. What do we spend it on. This is all within our control.

Q: What are the financial decisions you can make in calm times to help you through potential future setbacks like a job loss, illness or, to use an example in the here and now, your mortgage payments go up by $700 a month?

A: I’ll say this until the day I retire – an emergency account. Life will throw you curve balls. If you have a bit of money set aside (not invested!) for this, it will help you feel more in control and confident when life inevitably gives you a lemon.

The Globe and Mail, January 10, 2023