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.

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Reduce Money Conflict by Instituting These 2 Key Elements

Conflicts can arise in families with family businesses in many areas, but one that seems to be prevalent and I see in many of these families is: conflict around money.

When there are family members both in and out of the family business, the topic of money can become heated when differing objectives are striving to be served. As the business grows, the business “side” may very well need and want to re-invest profits in the business, pay down debt, or expand while those not in the business may want their distributions or dividends to grow. This is a natural tension that can disrupt any family enterprise and family heart.

Families who want to sustain the family across generations while continuing the family business have had to create successful models to keep the harmony of the family objectives in partnership with those of the business. A successful model is one that codifies the purpose of the family money with the purpose of the business so both can be understood and appropriately developed.

Because individual expectations can disrupt what is being built or developed, it is critical that purpose be defined and codified by all appropriate family members. It is also important to conduct annual reporting meetings so each “side” is aware of the sustaining objectives of each other and stay in high communication with known expectations. This will reduce conflicts between the two entities. Without purpose, cohesion gives way to individual agendas and behaviors which in turn, ignite conflicts.

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.

Responsible Stewardship is Key to a Successful Legacy

For families with businesses, there are issues that surface as the family grows and ensuing generations get involved or migrate away from the family business.

Conversations about the business that may have started in the living room at home, moved to the kitchen, then a conference room then to a board room, often become a struggle as families grow and as individual agendas develop. Working well together, across generations, can become tense when visions are not aligned, and responsible stewardship is not defined. Competing and contrasting priorities due to generational differences, ownership positions, and desires for the business as contrasted with desires for the family harmony, surface.

It is not natural to manage such complexity. Like a garden who needs proper care and maintenance to stay healthy, relevant, and vibrant, a family is best served by developing a disciplined and purposed component to their family and family business dealings and becoming responsible stewards of what they are growing and eventually, passing down.

Determining an initial purpose to both the family and family business initially separate the two entities so they can clearly define themselves independently. Agreeing on and articulating the value, vision and mission of each entity across generations is key to being responsible stewards. Adapting and becoming comfortable with change is the responsibility of each generation.

Questions to consider asking at home:
• Who do we want our family to be, as a family?
• What do we want our family to represent in the community?
• What is important to us as a family: what do we believe in? What do we stand for?
Creating purpose, mission, vision and family teams to develop the family’s success goes a long way to sustaining intergenerational trust and sustainability.

Questions to consider asking about the business:
• What is the purpose and mission of the business?
• Is the business meant to develop as a business or build family wealth?
• What do we need to do to support our working together?
• How do we communicate business information so it does not take over or interfere with the family environment?
Knowing the purpose of the business, communicating that to the family, developing trust in leadership development are all critical to successfully passing a business legacy and leadership from one generation to the next.

Leave me a comment on your thoughts or experiences on this important topic. I would be delighted to read your comments.

Partner with your Strengths. They Are Ready to Serve You

Without our strengths, we would not be able to dispel threats, dangers and alarms. We would not be able to demonstrate skill, or show off, or be able to intercede when necessary.  Strengths are like breathing. We need to use them and often do, without thinking. The problem is like breathing, if we don’t know how to use them in various conditions, they may not be able to serve us when we need them most.

If you were in a smoke-filled house, wouldn’t it be important to know how to hold your breath as you got past the smoke; the smoke that kills more people than fire?  Your strengths are also how you show yourself to the world around you. When you want to impress, when you want to show off, when you want to make a statement or add value to a situation, you call on your strengths to “introduce” you. Your strengths are how people see you. They are a tangible representation of who you are.  We use them to perform and most people judge us by our performances.

Researchers in positive psychology have discovered that when we identify and regularly use our signature character strengths, life becomes more satisfying and meaningful.

Strengths are what I call your “Outer Cloak.” They are what you “wear” when you are out in the world expressing yourself, when you want to make an impression, when you need to accomplish a task or serious endeavor. You use your strengths. For example, you might express your strength in generosity when you are out with friends, your ability to organize in accomplishing a task, or your ability to persevere when undertaking serious endeavor.

Most of the time, however, you are unaware of the strengths you are applying. Most of the time you are unaware of how others see these strengths in you.

How do your top three strengths add meaning to your life? Let me know as I would like to hear what you say.

The Importance of Living a Meaningful Life Through Your Values

Values provide us a compass by which we live our lives. Although values are always present, we rarely give them much thought. Much like a compass we use on an unfamiliar hike, values provide us the platform from which we direct our lives. We judge based on the consistency of values utilized by someone.

 

The Barrett Values Center, in 2010, found, in researching more than two thousand private and public institutions in more than sixty countries, that: “Values-driven organizations are the most successful organizations on the planet. They found that values drive the culture as well as contribute to the employees’ fulfillment. In the book Built to Last: Successful Habits of Visionary Companies by Jim Collins and Jerry Porras, the noted the same outcome in companies they observed over several decades.

 

Martin Seligman, a leader in the positive psychology movement, found, through his questionnaire, that signature strengths and values fundamentally contribute to a meaningful life.

 

I remember, many years ago, thinking that emotions were fleeting and mercurial. They seemed to be missing a key ingredient to living fully.  When I was first introduced to the concept of values I thought they were a wonderful state to aspire to.  Years later, when I identified my core values, I felt a strong resonance and connection to my life. I realized that I could live from my values and when I did, life was clearer and more satisfying, with richer meaning and depth. I realized that they were my compass, the one I had been missing and to which my emotions could not relate.

 

What are your values? How cognizant are you of them on a daily basis?

Change the Narrative of Money Conversations for Better Outcomes- Part 2 of 2

It is important for couples who are arguing over money to take a moment to change the narrative. Instead of rehashing the perceived problem, engage in a different conversation about money. Start your next conversation with a question.

 

The type of question you ask is critical. For starters, ask open ended questions as they elicit a more expressive response. Listen to the responses you receive, not merely for information but for feelings and intentions behind the words that the responder provides. Seek to understand them so you can create bridges to a conversation that brings you both to a satisfying outcome. Ask questions like:

  • “How did you observe about money when you grew up?”
  • “What did your Mother teach you about money overtly and covertly?”
  • “What did your Dad teach you about money overtly and covertly?”
  • “What did you like to do with your money as a child and how did that make you feel?”
  • What is an example of a challenge you have had with money and how did you successfully face that challenge?”
  • “What is something you are proud to have done that increased your savings?”
  • “What would you like to change with your current money management?
  • “What are three things that are important to you about money?”

 

There are many more questions that can be asked but I wanted to get you started. You may think of ones on your own as well. The key point is to remember to make your questions open ended and inquisitive rather than confrontational. A question like: “Why don’t you save money?” is more confrontational than “What is important about saving money to you?” which is more inquisitive and invites understanding. People want to be understood and it is important that questions be framed to do that.

 

Changing the framework of money conversation is beneficial for two big reasons:

  • It gives context to someone’s current views and behaviors around money.
  • It can transform the existing anxieties about money to understanding where the other person’s views on money derived.

 

Have your conversations be ones built on respect and understanding as you develop strategies to your productive conversations about money.

 

One final thought: share your responses to these questions as well…after the person you are engaged in the conversation with is done with their response to the question you asked. Trust is built when people feel listened to and understood. Here is an opportunity to listen, share, seek and offer a bridge to understanding.

 

Would you like more guidance as move your money conversations from mess to success? I would love to help you! Send me an email at bhaj@focusasndsustain.com and let me know an issue you are facing with your money. Let’s get you on track to having money conversations that work for you.

Change the Narrative to Connect in Money Conversations Part 1

Money conversations are not always easy. Surveys by the Certified Divorce Financial Analysts show that money is one of the top causes of divorce while Think Health Magazine finds it to be one of the top two causes of divorce.

 

Dr. Brad Klontz a financial psychologist and associate professor at Kansas State University has found that money anxieties are fostered because people are not generally used to talking about money in a substantive manner. Too often it can “seem like a mind field that can easily go wrong, Brad says.

 

Couples can find that there disparate upbringing, experiences and expectations around their money spill into their expectations and judgments of their partner’s habits and behaviors. Of course, their partner had their own set of money experiences growing up that they bring into the relationship. Because “much of their beliefs around money are held in their unconscious,” Brad continues, “they really don’t come out to play until you are in a relationship.” These money stories and scripts can play havoc on primary relationships when the current money habits and behaviors play out.

 

Allianz’s LoveFamilyMoney Study, conducted in 2014 with over four thousand adults, found that financial issues causing the most stress in spouses were: planning for future needs at 76%, covering current financial expenses at 62%, and getting out of debt at 56%. Allianz’s study further revealed that 28% felt they spent too much on unnecessary things, 29% said their financial baggage was difficult to overcome and 23% were not saving enough money.

 

Resentments can build when the right conversations are not held. It is important for couples who are arguing over money to take a moment to change the narrative. Instead of rehashing the perceived problem expressed by “the other person,” engage in a different conversation about money. Asking the right questions, which we will delve into in the next blog, make a big difference to feeling like you have a strong financial partnership.

 

How are money conversations in your home? Let me know. If they are precarious, our next blog will introduce conversation tips to transform your home money anxieties to understanding and resolutions.

Do Not Forget the Past; It Provides Mighty Support

When we forget those who have come before, like our great- grandparents, we forget our history. When we forget our history, we must begin again leaving new footprints that are themselves, swept away and forgotten as our great grandchildren look back at photos of us and wonder who we were.

 

Contrast this with those families who have captured, and meaningfully nurture the values and enduring traits of those who have come before them as a pillar to support their own lives today and tomorrow.

 

If you do not care how your family will thrive or if it will drift into a fog of insignificance, your family’s history will play out as it has for centuries for most families. Great grandparents have no meaning, they have been forgotten. New generations start afresh as if nothing came before them.

 

But if carrying on the spark of “what matters most” to your family, as a group of like-minded connected individuals, then your family story is an important element to your family’s success. And you must create that story. It will not create itself.

 

Researchers at Emory University found that “…family stories provide a sense of identity through time, and help children understand who they are in the world.”  When adolescents can see the values and traits they share with past family members, they form a stronger sense of well-being and a stronger sense of identity.  This Emory University study also showed that ​there is real benefit in sharing the stories about where the family came from, both geographically and through their values. Family stories keep families connected through generations by its narrative.

 

Your story, the one that will live on, will include how you met challenges, what successes have meant to you, what values you deem to be important and why and how they have guided you. Your story will describe how you came to value what you do value so those who come after you can understand themselves better by hearing from you. When they understand themselves better, they have more confidence and feel more secure in a world where those without this foundation, struggle to be seen and known.

 

Do you have a family story in your family, one that benefits its members, is shared because it came from the “author’s” experience?  Let me know. I would love to hear your thoughts on this important recommendation.

 

 

 

 

 

 

Preparation is a Great Inheritance Tool

I have been part of conversation focused on what the best thing to inherit is. Some think it is cash. Some think it is real estate. Some think it is a portfolio of assets to be reinvested. I suggest it is being prepared, being prepared to become stewards of an incoming inheritance.

 

Studies show that for 90% of families where wealth makes it to the 3rd generation, it is gone by the end of this generation. This is not due to a fault of this generation. They are merely responding to a lack of preparation and instead doing what is naturally the course, spend, squander or squabble over the inheritance.

 

Each generation has a unique view and interpretation of its partnership with money and the family. The first generation carries the vision, the passion and focus to build a new company. This generation tends to sacrifice their personal life for the business. They must do so in order to build a successful enterprise.

 

The second generation has a different perspective. They have grown up with explicit or implicit expectations placed upon them to build on the family fortune that often conflict with their own personal objectives. Understandably this can create great friction. Couple this with squabbling that happens between siblings over the purpose of the wealth and there lays a sure recipe for even bigger problems. Studies confirm that 70 % of families lose their wealth by the end of the second generation.

 

For those families, whose wealth makes it to the grandchildren, there is a new perspective. The third generation is farther removed from the creation of the wealth. They are accustomed to being wealthy. From their point of view, having wealth is a birthright. They have never seen or been exposed to the struggle or the reason of making money. They are free to dream and create. They have never had nor needed the tools to build a productive life. They are only familiar with spending money.

In three generations, a family’s past and all its treasures will be lost and forgotten. Memories will fade as new generations spend their precious time scrambling to build a-new.

 

But when a family prepares its present and future for its inheritance, it can grow its bounty. A family who conscientiously grows and develops its assets, is called a legacy family. This is a family where the money as well as the family culture develops and is transferred from one generation to the next with purpose and intention. This type of family uses appropriate systems, tools and activities to stay connected through generations maintaining shared purpose, understanding, and trust. This family becomes a prepared family transferring its wealth with confidence it will grow in the family for generations.

 

Let me know your experiences on preparing inheritances for long term family connection. I would love to hear from you.