3 Tips to Developing Money Stewards at Home

An effective way to view  money at home is to regard money education as a process rather than as a single event instruction. When money education is set up like this, money behaviors can be talked about, tweaked and managed more easily.

Here are 3 tips to get you started in developing money stewardship at home:

1        Begin by asking your family members what money means to them. Once the question has been asked, listen, without interruption to their response. It is critical that you not interrupt so your family members feel listened to. They do not want to feel this was a set up question for judgement and commands. When your children feel heard rather than feeling like they are being judged, they will more likely be candid with you in their response.

2        Put together an agreed to plan of action to develop valuable money habits in these areas: saving, invest, donating, earning, spending, what we at Focus and Sustain call the 5 S.I.D.E.S. of Money©. You will find your children are drawn more to one or two “sides” more than others. Explore these with them. Create limits and challenges for them to explore their interests.

3        Talk about money. Set up money nights where you talk about topics like: budgets for vacations, issues your children are running into, budgets, how to make money choices, etc.  Open  up the dialogue with welcomed feedback, with parameters around accountability, develop measurability to plans. All these will develop stewards to money at home.

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Don’t Let Money Confuse You

Money habits and behaviors have great impact: if you spend and don’t save; if you save but don’t invest, if you invest and can’t share; if you have money but can’t generate money all have their consequences. It may take some time to see the consequences, but they are there. Money issues eventually surface, most frequently when we are in a relationship with someone else and their habits and behaviors differ from yours.

  • If you spend and don’t save, you may find that you don’t have the resources you need for retirement, for medical tests or costs that insurance will not pay for. Strive to save 5% of your net income for that emergency saving. Determine your “zero,” a number you never fall below. Use 5% of your gross income as an initial “zero” if saving is difficult for you.
  • If you save but do not invest, you will find that inflation and taxes will eat away at your savings. Partner with a financial advisor who can help you learn about investing. Make 15-20% of your gross income, your investing objective. Define a purpose for your investment and develop an active relationship with your advisor.
  • If you invest but have not yet helped others with your financial generosity, you might be surprised at how good it feels to assist someone in need. Organizations and causes you believe in can use your generosity in ways that do make the world better. Individuals, down on their luck appreciate your helping hand at an extremely difficult time in their lives. Make 5-10% of your net income a goal for giving.  Find an organization that aligns with your passions and beliefs and enter a giving program with them.
  • If you give money, and do not yet understand the value of generating your own finances, start a project that you personally fund. Become an entrepreneur. You will learn a lot about business and yourself! Alternatively, develop skills that are marketable and search for an opportunity in a field of interest to you. Be creative and bold in your search for work.

Money rocks! Don’t let it confuse you.

 

3 Key Questions to Ask Yourself about Money

Money has been around a long, long, long time which leads me to ask these 3 questions:

#1: Why are we as clueless about keeping money today as we were yesterday and hundreds of years before then?

In my work with families, I find that one of their biggest stresses is around money. Often, parents and grandparents see poor money behaviors in their children and grandchildren, habits they wish they hadn’t inadvertently passed on. To attempt to ameliorate the problem, they pass on financial information or directives without a basis in understanding and experience for the young ones to mimic.  Modeling what they see rather than what they hear, is the child’s norm.

#2: Why is money so hard to keep?

We need this, we want that, we want an upgrade. No, really, I need it…really! Because it is so easy to part with, the government makes sure taxes are deducted before paying ourselves. Keeping money takes commitment to a different paradigm.  The benefits to committing to this paradigm include a sense of freedom, and calmness about money.

#3: Are you passing on to your children and grandchildren the financial literacy you wish you had been given?

Passing on financial literacy is not something to be afraid of, timid about, or embarrassed about. The stakes are too high to risk repeating cycles of financial confusion. Financial literacy is about learning how to use the 5 S.I.D.E.S. of Money © with purpose and habit.

Please comment on your thoughts to these questions. I would love to hear from you.

man holding u s dollar banknotes and black leather bi fold wallet

Photo by Artem Bali on Pexels.com

Quotes about Money to Start the Year

• The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought, and so broadens the mind. -T.T. Munger
Saving is a beneficial life-long exercise.

• You can’t manage what you don’t measure. -Bhaj Townsend
It is important to know what your money is for, so you can determine how to manage it.

• Wealth consists not in having great possessions, but in having few wants. -Epictetus.
This still rings true centuries after this Turkish slave, who grew up to be a formidable Greek philosopher, said it.

• Money without meaning is like candy without a wrapper. It’s too easy to devour without restraint-Bhaj Townsend
Now that rings true!

• If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed. –Edmund Burke.
How true this can be.

• This year, money and I will be friends, and not part company as easily and as often as last year. -Bhaj Townsend
An excellent decision to follow through on.

• It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for. Robert Kiyosaki.
Yes, indeed.

• Money is gone, for most families, by the end of the third generation because the system for understanding its purpose wasn’t built, or communicated or sustained. -Bhaj Townsend
This is so sad because it is avoidable.

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.

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.