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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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.

Sometimes, Money is Hard to Talk About. But…

When money can be talked about without the added emotions of hidden blame or unrelenting shame, money conversations can become like other productive conversations: meaningful and connective.  When money conversations become supportive rather than decisive, money conversations can be engaging and powerful. Instead of blaming others for their behaviors or shaming ourselves for behaviors and habits we are exhibiting, we become supportive of another’s and our own objectives with money. We become engaged in conversations as we understand others and our own motives and intentions with their and our own money. We can then put in play powerful actions to attain our common objectives. What makes this transformation from feeling divided to feeling unified around money?

When we understand each other’s views and stories about money, we become more engaged with their struggles and triumphs with money. When we take money “out of the closet” of isolation, blame, or shame, and bring it into our shared lives, as partners and as a family, money becomes a productive tool.

What restrains you from talking about money? Is it lack of confidence on your ability to make consistently good decisions about money? Is it an inability to engage your partner in conversations you think are important with your money?   Is it an inability to know how to approach planning your financial goals? Is it an inability find time to spend on financial matters and if you had the time, not knowing how to frame a conversation on financial matters? Is it a fear that conversations about money will lead to tension or disinterest from your partner? These can be dealt with productively and effectively.

The first question you can ask someone you share finances with is:  What is important about money to you? And let them response without interruption from you. You can learn a lot by asking this one question.

When you find out what is important about money to yourself and to those with whom you share financial interests, money will transform from being hard to talk about to being a welcomed subject of conversation in your house.

Let me know what keeps you isolated with your money or, how you have created a bridge from isolation around your money to it being a productive tool in your and your family’s life.

 

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Consumer Debt Gnaws at the Fabric of Freedom and Self-Worth

Debt is back, big time. The tightening that occurred after the crash of 2008 has been replaced by debt approaching $1 trillion dollars. And it shows no signs of abating.

 

Student loans and credit cards may be good for the issuers who capture more revenue through high interest loans and late fees but they are creating a pool of consumers sinking deeper and deeper into debt.

 

Credit card debt has already surpassed the pre-2008 crash levels, per WalletHub. Thirty-four billion dollars was added to credit cards in the last quarter of 2016 alone WalletHub found. To add to that increase, in the same period there was a record low payback of debt.

 

In my conversations with Millennials, I hear a range of concern about their debt. Some do all they can to avoid debt by delaying college until they can afford to pay for it or work for companies that will pay for their college education. I know one Millennial who has $300,000 in student loans. She told me that it is the price she has had to pay to attain her law degree. Although the debt does add stress to her life, she does not want it to confine her life to just working. She figures she will have this debt all her life and hopes that the government will one day forgive it.  

 

What have we done, where we have created a society saddled with debt as a way of life? Is this a sustainable model? I do not think so. It may seem to work for a generation but it is not a sustainable model for financial strength. Ongoing and mounting debt gnaws at the edges of the fabric of freedom, independence and self-worth. Debt is a burden. It may not direct all our actions but it directs our thoughts on how we think of ourselves.

 

Tell me your thoughts and how you deal with debt in your own life. I would love to hear your thoughts on this mighty subject.

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Statistics Show We are not Raising Financially Literate Kids

Kids, ages 10-14 scored a 54%, ages 15-18 scored a 60% on a 30 question national financial literacy test. This test measured their ability to save, earn and grow money.

 

Kids have access to money but do they understand how to use money? According to this financial literacy test, no. Of course, they know how to spend but can they count the change they have received? Is it the correct amount?  Next time you have a transaction where you give a $20 bill for an item costing less than $10 watch the change making ability of the cashier. How easy or hard is it for your child to determine if the cashier gave them right change when the register does not tell them what the correct change should be?

 

Do kids check their receipts to make sure they were charged correctly?  Research conducted in 2012 by uSwitch found that 70% of consumers were overcharged on a bill in the last year…and did not know it until it was pointed out to them.

 

Just how familiar are kids with making change, with being charged correctly, or with being overcharged? When they see these habits in adults who show them how to model behaviors, it is easier for them to do the same. When kids do not see a model to imitate, checking receipts or counting change can be embarrassing. They feel uncomfortable not trusting or believing the cashier. They have not been taught how to properly deal with this.

 

It’s time to teach kids about money. After all they use it every day and checking their receipts and counting their change is a good habit to learn. You might even decide to reward them for discrepancies they find.  This will go a long way to raising health financially literate kids.

 

Leave a comment and tell me what you do to encourage and build your kids’ healthy money habits? Let me know if you need help with this endeavor. We can help.

Pay Yourself Second, You Will Come Out Ahead

Everywhere you go there seems to be a line whether you are buying your coffee or tea, getting through airport security, waiting for a table at a restaurant, there is always a line.

 

It may not be as visible, but your money has a line forming for it also. Who is always first in line for it? Why, your favorite uncle, Uncle Sam. Uncle Sam demands to get paid and does what he can to stay #1 in line for his portion. Taxes always come out first in a financial transaction. Uncle Sam demands immediate compensation from a deal. But who is second in line for your money?

 

It depends. For many it is the merchant like the grocery or retail store. For some it is the account that you have agreed to pay second like a settlement, alimony, or a collection payout. I want you to reconsider who should be second in line and if this person is not already there, I want you to put them second in line.

 

I want you to place yourself second in line, after that demanding Uncle.  I want you to be as adamant about being second as Uncle Sam is about being first in line.  And be as adamant about that as Uncle Sam is about being first. I want you to take your position seriously and responsibly by having a plan and manifesting that plan so the money you have for yourself builds and supports the life you want.

 

Think of the 5 S.I.D.E.S. of Money© and determine how you are going to allocate the money you will have by paying yourself second to Saving, Investing, Donating, Earning, and Spending. When the money comes you then are ready to allocate it as you planned to those five S.I.D.E.S. of your financial life.

 

Be fanatical about putting money into those 5 S.I.D.E.S every time you have money pass through your hands-without exception and you will become a steward of your own money. You will come out ahead.

 

Leave a comment on how you make sure you pay yourself second.

Is the Financial Retirement Model Broken?

A recent article from Motley Fool revealed startling numbers about retirement savings. While ten percent of 55-64 year olds have a nest egg of $730,405 or more, the vast majority have $305,302 or less in their retirement nest egg. The Government Accountability Office released a report last year ( http://www.gao.gov/assets/680/670153.pdf ) which, in part, spoke to the financial status of people ages 55-64. They found that 41% of households had no retirement savings while an additional 20% had up to $100,000 saved.

Rather than lash out at potential consequences to this today, I am going to look at it from another point of view.

We are now looking at the third generation of retiree’s preparedness for retirement and finding it the same as the last two: not enough in savings….by a long shot. Why?

I think this is so because I think that the financial retirement model is primarily geared for three paradigms: the rare individual who saves like crazy, the individual who is lucky in the company they keep (stock grants) and those individuals who either inherit or have a career, winnings, pension, or golden parachute that ensures their financial security.

I am going to go out on a limb and say saving for retirement is not within reach of most people. Our culture, while promoting saving does little to encourage it. Instead, our culture invests a lot of effort to help and guide people to part with their money.

We have tried to “make” and encourage people to save. They are not or cannot do it There is something broken here.

I’m just sayin’. What about you? Leave me a comment on your reaction to this.

When Roles Are Reversed and the Kids Pay…Cool, Right?!

When asked about what impact their money would have on the lives of their heirs, a recent study found that 65% of the responders said there would be too much focus on material things, 55% said their heirs would not understand the value of money, 52% said their heirs would spend beyond their means, and 50% said that their heirs’ initiative would be ruined by money.  It looks like money does carry emotional baggage with it.

How do you teach your children about money when it can be a source of contention within your own homes or even worse, you hardly talk about it because you and your partners’ views on money are so different?

We use the 5 S.I.D.E.S. of Money© concept (save, invest, donate, earn and spend) to build strong and productive habits with money. Because money comes with so many emotional charges, it is important to know what money means to you. As money is a resource, it is important that there be conversations about the impact to the 5 S.I.D.E.S. of Money© can have in your life.  In learning how you view, succeed at, are challenged by these “sides” you learn a lot about your stories and sustainable behaviors around money.

To illustrate this, here is an example of an exercise a family devised for themselves. The parents were frustrated with their children’s casual view of money. They decided to reverse roles with their children for one night. One evening, the parents told their two children that the next allowance was going to be treated differently. Rather than give an allowance outright for whatever the kids wanted to use it for, this time the allowance was going to be used to treat the family to a night out with dinner and a movie.  “Cool”, the kids thought, until they were reminded their chore money was being used for this.

As their parents explained, this was going to be a “see how the other half lives” experience. “Cool”, the kids again thought as they felt a generous splurge washing over them as they decided where to eat and what movie to see. Cool, right?!

At dinner the children ordered their usual meals. Their parents, instead of ordering their usual fare, decided to order like their children did when the meal was paid for by the parents. In addition to the entrée, the parents each ordered appetizers and dessert.  Once they got to the theater, the parents said they wanted more food and ordered large popcorn, large drinks and extra candy, just like their kids would.

Like their children, the parents did not eat everything. They left most of their entrée on the plate while eating all the dessert. They spilled the drinks at the theater. They tossed some of the candy and popcorn out too…just like their kids. Cool, right?!

Their children were shocked that their parents left food on their plates, food they ordered but didn’t want to eat. The kids couldn’t believe their parents wanted more to eat at the theater. When they saw how much had been spent that evening, the kids were blown away at the total they, the kids had to spend. 

This turned out to be a life lesson for the kids on the value of money to them. It changed their perspective and behaviors with money. Sometimes all it takes is a new perspective. Cool, right?!

Your children want guidance on how to best deal with their own money. Give them experiences with built in lessons for them.

 

How do you teach the 5 S.I.D.E.S. of Money© with your kids?

Thank You for Being Part of My Fulfilling Year

Reflecting

 

Thank you for who you are to me—people of grace and profound commitment to bringing a richer weave to the fabric of life-your own and the world around you.

 

When I reflect on you,

You who have deliberately chosen to direct your lives

Purposefully and with great meaning

I see shimmering stars lighting my path

I see the beauty of persistence and determination in you.

 

As I think of you

I feel the essence of the freedom you feel

When enduring strength and power replace your initial fears and doubt.

I am touched by your commitment to being your best

With your Legacy, your Life and your Money

 

HAPPY HOLIDAYS

We welcome your comments

Are You Allocating Your Money to all 5 S.I.D.E.S.?

What S.I.D.E.S. of money are you favoring? In the second of three levels of our Money Focus program, we ask the question: “What sides of money do you use and which do you favor?”  We ask this so people can determine how they currently attend to what we call The 5 S.I.D.E.S. of Money©. Theses 5 S.I.D.E.S. are:

Saving

Investing

Donating

Earning

Spending

 

Most people find that the sides they use the most are spend and earn. A big drop off occurs before I see either saving or investing as the next sides people attend to with investing and saving last.

 

Where does donating fit? Surprisingly, it is not last. It comes before investing. The World Giving Index found, that as a percentage of population, the U.S. ranked ninth in 2014 among approximately 140 countries. This index found that about 68% of the U.S. population donates money. The Gallup Poll found that as of April 12, 2015, 55% of adults have money invested.   USA Today, in March of 2015, found that 66% of the population saves but 47% reporting that they only have enough to cover living expenses for 90 days or less.

That is important information which illustrates how fragile and tenuous people’s financial lives are.

How do you address money at home so these sides are attended to in ratios that sustain a healthy lifestyle? What S.I.D.E.S. do you attend to and in what percentages?

Research has found that many of the top earners have their money allocated to the 5 S.I.D.E.S but they don’t share healthy stories or teach their children or grandchildren about productive money habits. The next tier of earners, tend to allocate money to earning, investing, spending and donating, with only extra money, when it comes, allocated to saving. They don’t teach their children or grandchildren much about money either.

Below these thresholds, people skew their financial allocations towards spending, earning and donating only if there is extra. Saving is rarely attended to. This oversight can lead to lifestyle upheavals should a disability or loss of income occur.

When children are not exposed to all of these buckets early they tend to give them scant attention as adults. The cycle of poor financial habits is reinforced and passed on to another generation.  You can end this by mindfully allocating your money to each of the 5 S.I.D.E.S. of Money© deliberately, purposefully, and continually.

What S.I.D.E.S of Money© allocation do you exhibit and in what percentages? How is this compromising unforeseen financial challenge such as illness or loss of income?

Tell me how you allocate your finances to the 5 S.I.D.E.S. of Money© and what risks you are subjecting your financial wellbeing to.

 

I would love to hear from you.