2 Steps to Take Now to Reframe Unproductive Money Behaviors

According to a survey by Wells Fargo, nearly half (44%) of those surveyed said that money conversations were the toughest to have, more difficult even than religion, politics or death. If you find that you are one of those who find it difficult to initiate or be in important conversations, you will want to read further. Money holds a lot of judgmental emotions and tension as inappropriate behaviors can usurp the initial intention of the money topic.

Let’s examine the following situations: You are at a dinner with friends and the bill comes. What happens next? Do you grab the bill? Do you wait for someone else to make a move? Do you talk about splitting it in half or per everyone’s individual order?

And how about this situation: You are invited to join an “By Invitation Only” group on a long weekend retreat. The group really wants you to join them but you know you do not have the extra money put aside for this. What do you tell them? Do you make up another “reason” for not being able to join them? Do you tell them you will think about it as a way to avoid talking about it? Do you put it on a credit card knowing it will take you eighteen months to pay it off as well as the other items on your credit card accruing interest each month?

It is so easy in these situations, and many others, to keep your thoughts to yourself; those thoughts like: “Let’s split the bill per each individual’s order.” “I can’t come this year, but let me know the cost for next year, so I can save up for it.” You do not want to appear different, inadequate, or bothersome. You want to do what everyone else is so seemingly agreeable to doing.

Unresolved money conversations create tension because you add a perspective of shame, guilt or judgment about you and money. But when you start talking about money openly and without the shame, guilt, or judgment built into the conversation, you can develop respect and understand around money and your role with it. But how do you do this?

There are two steps you can take immediately to begin to reframe your behaviors with money. The first is to understand what money was like growing up for you. I call this understanding your money stories. Begin by asking yourself: “How was money talked about when I was little?” “What did I do with allowances or financial gifts that I received when I was growing up? How did I talk with my friends about money when I was a teenager?” These and many other questions will give you insight into your own early views on money. You will probably recognize patterns you use today due to your early associations with money.

The second step you can take is to determine how you are going to handle money situations when others are involved, before the event happens. If you are going out for dinner with others, you can send a quick text to share your idea of splitting the bill. Prepare a response when you are asked to join events you cannot afford. Letting people know you have not allocated an amount for a particular “retreat” or other event to your budget presents a sense of responsibility with your money.

I know this just scratches the surface of changing money behaviors and habits but I thought it was important to talk about this.

Let me know how you handle money so money is an ally to you and your goals in life. I would be delighted to hear from you.

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Key Strategies to Keep Money Intact Across Generations

When the subject of passing money to the next generation is broached, a question that is often asked is: “What are you going to do with the money?” Although this is a great question, I think there is a farther-reaching question to ask as well: “How is the recipient being prepared to receive their inheritance?” What make this question so compelling? Because it redirects the subject from being about the money to being about preparing the inheritors. And this is so important yet often omitted.

There is a common phenomenon taking place around the world. This phenomenon even has a phrase associated with it. It has to do with the common consequence to inherited money: inherited wealth does not tend to survive beyond 3 or 4 generations. Independent studies have found that 70% of families lose their wealth by the end of the second generation while 90% of families lose their wealth by the end of the third generation. The common phrase that accompanies this horrible unintended consequence is: in the U.S., shirtsleeves to shirtsleeves in three generations; in China, rice paddies to rice paddies in 3 generations; in Italy, barn stall to stars to barn stalls in 3 generations. Although this may be a common consequence to wealth, thankfully, today, this common phenomenon is being addressed head on. Families are looking to change the statistical probability to their accumulated wealth.

Let’s look at two strategies families are using to keep their wealth intact as it moves across the generations.

The first strategy is the passing down of the story, the one that describes how challenges ere overcome, how successes were dealt with, and what it meant for the creators of the wealth to build that which they can pass on. This is important for a family to have because each generation is farther removed from the wealth and having the story reminds them of their roots and of the principles it took to accumulate the wealth future generations have become accustomed to having. When succeeding generations understand what it took to build the wealth in an experiential rather than in a didactic fashion, there is a much greater chance for financial stewardship across generations.

The second strategy is to pierce the veil of sheltered silence, that silence protecting the status quo and instead, talk about the purpose of the money and supporting money stewardship in the family. Teaching money skills, like the 5 S.I.D.E.S. (Save, Invest, Donate, Earn and Spend)© of Money, help family members feel more confident with money conversations. Developing family philanthropic initiatives give families a formal method to talk about how their money impacts their community. Holding Money Nights, where one topic about money is discussed without judgment or interruption, develops deeper trust and more engaging conversations around money.

Find tools to use with your family so that the money you accumulate can stay intact across generations.

How do you view money as a family? Let me know your thoughts.

How Could My Parents Blow It?

As the multi trillion-dollar asset based makes its way from one generation to the next, in what has been called the biggest asset transfer in history, I hear a repeating question that has plagued families for hundreds of years: “How could my parents blow it when my grandparents had so much money?”

According to the Williams Group, a wealth consultant group, 70% of wealth families lose their money by the end of the second generation and 90% of these families find their wealth has been squandered, spent, or squabbled over by the end of the third generation. And they are not the only ones to have uncovered troubling findings. U.S. Trust found, in their survey of high net worth individuals, that 78% of the wealth holders feel that the next generation is “not financially responsible enough to handle inheritance.” 64% of those surveyed have disclosed little to their children about their financial wealth.

I have heard many stories due to the work I do with families, keeping them connected across generations, when money matters. One family’s senior generation, turned over all financial decisions, after receiving a large payoff for the sale of a product, to their financial advisor. The financial advisor has become the arbiter of family and friend loans. The financial advisor decides how and when the money is to be used. The family has not established its own purpose to the money. There are no family conversations about money. Although the sale of the product was completed two years ago, there are already disagreements about whether or not to let the next generation know about their wealth, where to send their children to college, and whether or not to help an older generation with their mounting health care bills. The financial advisor is not equipped to help the family build a framework of purpose to the money so family conversations about money can be neutral rather than tense.

Another family, whose story I know, doesn’t want their children to know about the money they received from the sale of a business. They decided, after receiving their initial check that nothing would change at home. But within a few months, one parent had quit work, wanted to move their parents to live near them, and was adamant that they did not want their older teenage children to know anything about “the money” as it may ruin them. The other parent has found that they cannot engage in a meaningful conversation with their spouse about their money. It has created a gap between them.

Money, in families, needs to become just another topic conversation or more families run the risk of finding that their money becomes a “home wrecker.” When money is not talked about and understood for its role in the family’s life, data supports the fear that the next generation will “blow it.”

“How did my parents blow it when my grandparents had so much money?” is a question I am often asked. “They didn’t know any better. Nobody taught them about what money meant to them nor helped them construct a framework of purpose that the family shared, developed and sustained across generations.

What can you do to affect a framework of purpose and financial smarts in your family? Let me know I would like to hear your comments.

Starbucks Offers More than Coffee and Tea

In his book, Onward, Schultz wrote: “Stick to your values, they are your foundation.” He said these were key to rebuilding Starbucks.

Schultz demonstrated the fundamental benefit to a company having values, and using them to build their presence. “It is our mission to make sure the world sees us through those lenses.” He wrote.

Starbuck’s values are: Community, Connection, Respect, Dignity, Humor, Humanity, and Accountability. “They are visibly evident and often referred to in meetings and prior to key actions.

Values not only impact a company; they also impact our individual lives. What are your values? What role do they have in your life-are they directors in your life, or merely white noise around your life?

In a fast-paced world of deadlines and expectations, where impatience can override wisdom and expediency overrides understanding, values can get swept aside for “later.” This can have disastrous consequences in communication, in decisions and in the choices one makes.

Values are part of an intentional life. They form the foundation of success. Howard Schultz recognized the essential nature of this. Like Starbucks, how do you make your values the cornerstones to your life?

3 Essential Tips to Overcome unproductive Money Habits

Over time, money becomes a system of repeated behaviors. If you grew up spending money, you are most likely to continue that habit, as an adult. If you grew up with philanthropy as a meaningful way to help causes that are important to you, you are most likely to continue doing so as an adult. If you were accustomed to asking your parents for more money as a kid, to supplement what you earned or what you were given, this behavior will likely continue with credit cards substituting as your parents’ source for more.
It is not easy to change a habit once it has been ingrained, even when you want to. You may have discovered that as you have attempted to change food, exercise or your own money habits. Why is it so hard?
Well, it seems to be all in our head. Researchers have found a small region of the prefrontal cortex responsible for switching on and off our habits. This area, as the command center, also controls planning and thinking.
Using rats as their subjects, researches at M.I.T. (Massachusetts Institute of Technology) found that some habits are flexible rather than ingrained. The IL (infralimbic) cortex can form new habits from the constant moment to moment decisions and actions we make. As we all know, who have ever changed habits, it takes time, patience, support when the “old habit” kicks back in and a method back to the new habit.
One of the toughest things to deal with is changing a habit or behavior once you figured it doesn’t work for you. When it comes to your money, If you know you have a habit that needs to change, such as a chronic pattern of over spending, consider these 3 essential tips to help you form new productive habits.
Begin by asking yourself these three questions:
1 What does the overspending give me (what is the emotional pay off this overspending provides)? We have to examine the emotional payoffs as this is often the contributor to our habits. You may have to really examine this closely. There is some need the overspending is filling. What is it?

2 What habits do I want to have with my money spending?

3 What first step can I take to model the habit(s) I know will be productive for me.
Although this is merely a primer to help you change a habit, if you can begin here, you will have taken powerful steps to changing your money habit. You can thank your IL cortex for the role it had later.
Tell me what you discover about the money habits you commit to changing.

The Purpose of the Family Money is a Key Ingredient to the Family’s Mission

You probably know, or at least have read, about the benefits to developing your own purpose and having your own mission. It clarifies your life, making your life simpler. You build direction, energy, and an added dollop of vibrancy. Phil Knight said of purpose, in his memoir, Shoe Dog, “If you’re following your calling, the fatigue will be easier to bear, the disappointment will be fuel, the highs will be like nothing you’ve ever felt.”

Now, what if this idea of creating a purpose or mission was added to a family’s culture? Would that be novel? Although it might be for your family, it turns out that most families who have stayed connected across generations, have done just that, created their sense of purpose and/or mission. Why? Because doing so creates a bridge of connection in which a sustained feeling of harmony and unity is fostered. It has to. Each family member has bought into this sense of purpose. They are all supporting this mission in ways that mean something to themselves personally as well as for the benefit of their family in generation after generation.

A key ingredient in this family purpose is the purpose of the family money. Money moves and without purpose, it moves aimlessly. When there is a purpose to the family money, it becomes easier to talk about money. This is so because there is a framework around the money with its boundaries and limits, opportunities and possibilities. When family members are included in developing the purpose of the family money, they can determine how and when to use it and as importantly, understand the relevance of this shared money as contrasted with their own money.

Tell me what went through your mind regarding your family’s purpose and the purpose of the family money to the family spanning generations. I would love to hear your comments.

It’s Time to Alter the Traditional Financial Security Model

People are living longer lives. More years are being spent post work. And the current model of financial security funded by 401ks and social security is cracking.  Three out of five boomers, according to a recent report from Transamerica Center for Retirement Studies, are forced to retire due to “layoffs, organizational changes, health concerns and family responsibilities.” Only one in six can retire early, with a secure financial net to carry them through their golden years.  The 2008 “Great Recession” hit the boomers hard as many found their retirement savings severely reduced, were laid off, or could not find increasing salaries above inflation adjustments to fund their lifestyles.

 

Boomers are not alone.  The Generation Xers, born between the mid-1960s and the early 1980s, are concerned about their financial security. According to the Transamerica 17th annual Retirement Survey, only 12% of Xers are confident they will be able to retire comfortably, 30% have taken a loan or an early withdrawal from their retirement accounts an 86% are concerned that social security will not be there for them when they retire. Their median retirement savings is: $69,000.

 

It is time for a change to the financial model we have in place.

 

I think it is odd that people can work and then find themselves without enough money in their sunset years, after they provided great benefit to companies they worked for. I find it egregious that companies skating on the thin line of ethical standards, can jeopardize the financial security of their employees, while the founders or CEOs raid the company to line their own pockets. I think it is not right that so many retirees do not have a secure financial base at a time of life when they are more prone to disease, increasing costs, and shrinking opportunities. Dementia and Cancer are potentially major financial requirements that can reduce a couple’s assets to almost nothing. I think it is terrible that very capable workers are unable to find jobs due to efficiencies of businesses and now find themselves falling further and further behind financially. These stresses do not help people live productive lives.  

 

It is time for a change.

 

Some countries are looking at alternatives. Canada and Finland and Switzerland, for instance, are looking at a base universal income. Switzerland is talking about a guaranteed income of 30,000 Swiss francs for its citizens. Here in the U.S., Alaska has been paying its residents a dividend since the 1980s. This dividend is based on the oil revenue it produces.

 

What are you experiencing in your community as it examines its own economic security? Let me know. I would love to hear what you experience.

We Are Not the Only Ones Who Feel Injustice

The Capuchin Monkey, a small and baby faced primate has some curious behaviors and habits. No, Michael Jackson’s Bubbles was not a Capuchin Monkey, but Justin Bieber’s Mally is.

It is very intelligent with skills ranging from hustling as a street performer to providing assistance to quadriplegics. It is trained to serve much like an assistance dog is trained to do. It can perform everyday tasks like opening bottles and microwaving food. But that is not why I wanted to introduce you to the Capuchin Monkey. REALLY!!!

This monkey, which likes to live in big colonies and wander wide areas, was chosen for a study: Determine how it responded to rewards. This particular study was conducted about ten years ago, at Emory University, by renown primatologist and professor Frans de Waal. He called this research, which involved studying the behaviors of two Capuchin Monkeys under a specific setting, The “Fairness Study.”  

He assigned the same tasks to these two monkeys. Whoever was finished first was awarded a cucumber. The winning monkey took its prize willingly but not with any extra glee. And that made sense because the Capuchin Monkey considers the cucumber to be an acceptable reward but not as rewarding as receiving a grape.  

The dynamics between the two monkeys was copacetic as long as the winning monkey received the cucumber and the other monkey received nothing. But the dynamics between the two monkeys changed when Dr. de Waal gave grapes to the monkey who came in second at the same task. When the” winning monkey” saw the other one receiving grapes for doing the EXACT same task but slower, the “winner“ had a fit. It rattled its cage, it pounded the table in protest, it was not going to let such an “unfairness” go unnoticed.

The monkeys clearly understood the distinction between the two prizes, and the “winning monkey” thought it had been given a lesser reward for finishing its tasks first.

How do you deal when you are provoked by injustice? Do you rant and rattle like the “winner monkey?”  Do you confront the provider of the reward for their “inequity?” Do you not care as all rewards are good rewards? Do you ask to see the “rules” before you play “the game?” Injustice is ever present. Do you deal with it on an emotional level or on a principled level?

And we thought we were the only ones who felt injustice. I thought you would want to know what I found.

Buried Emotions around Money were Revealed When…

Because I often host money workshops, I do not have the experience that my workshop attendees (mostly intergenerational members of families) have. It was a delight to be able to participate in a workshop hosted by a therapist.

 

In this money workshop, we all pretended to be a family. Although none of us were related, it did not take long for emotional dynamics to come into play between us.  

 

The first direction was to take the bills out of our wallets and give these bills to the host. Immediately questions of trust were unearthed. Would the money be returned? Should I hold back any bills? Who cares, it’s just money, right? were just some of the dynamics that came up.

 

Next, the host asked for a volunteer to count the money the host was holding. That brought comments like: “How can we trust the counter?” “Are they going to keep the money?” “Can I count the money too to be sure they counted it correctly?”

 

Next, the host asked for a volunteer to divide the pile of money into seven uneven piles (matching the number of participants.) The host then picked up a pile, gave it to the first person, picked up the next, gave it to the second person and continued to distribute the piles like this until all the piles were distributed.  As you can imagine, this created quite a stream of comments as some felt short changed while others felt like they got a good deal from the initial amount they had given the host. One person felt like a weight had been taken off his shoulders as the pile he got was more than what he had borrowed from another player to give to the host (he did not have any bills in his wallet.) One person left the game frustrated that this was “going nowhere. You’re just moving money here and some of it was my money that I no longer have.”

 

The host then told us to put any money that we had above the smallest amount a player had in their hand, in a pile on the floor. Each participant now had the same amount of money in their possession. Tension turned to relief and awkward laughter.

 

The host asked everyone to talk about their favorite charities which we did, one at a time. The host then had us talk about what should be done with the money in the pile on the floor. Should it be returned to the participants or should it be given to one of the charities mentioned by us? We had seven minutes to reach consensus. We did not reach consensus. The host then had everyone pick a number from a hat. He called out a number and the person holding that number was identified. The host then told us we had another five minutes to reach a consensus about what to do with that money or it would go to the person holding the number he called. Still no consensus so the host gave the money in the middle of the floor to the person whose number he had announced.

 

Two people were okay with the outcome; two people were outraged that their money had been “taken from them”; one person asked what the person who was awarded the money was going to do with their new money? The person with the money said they would either give it to the charity they had defended or they would return it to each participant so they could be made whole. But the group had to come to a consensus on which choice to make. The decision was to give it to the organization that the person holding the money had talked about.

 

We then debriefed on the exercise, paying close attention to the emotions we exhibited and the feelings we had during the various sections of the money exercise. I found myself noting reactive behaviors triggered by feelings I had as a child around money.

 

Money exercises are a wonderful way to experience beliefs and emotions around money. You can identify patterns of behaviors that are unproductive and introduce new patterns of behaviors that encourage productive habits and behaviors around your money. Often, we hide and bury these feelings but they can come up in the oddest places.  

 

If you would like to explore a money exercise with your family or group, let me know. I would be delighted to develop a money workshop for you.

Connections Matter

December wanes as another calendar year closes.

In the spirit of appreciation at this year’s end, I want to share with you my gratitude of having you in my circle.

Thank you so very much for the acknowledgement you have given me this year.

I appreciate the emails I have received and the questions that opened into conversations on the consequences of making meaningful choices.

I love the stories you have shared about your observations and challenges on legacy, life, and money matters.

I am grateful for the introductions to your clients and the impact I have had the chance to have on their lives.

Most of all, I am grateful for your partnership as we do all we can in providing our clients with the direction, tools and encouragement to do the best thing for their families.

One word encompasses the qualities  I appreciate in you:

Committed

Observant

Notable

Nurturing

Exemplary

Clear

Thankful

Insightful

Open hearted

Noteworthy

Thank you for the CONNECTION we have.

May 2017 bring great success in the significance we cultivate.

Happy

2017

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