The One Big Tip to Use for Healthy Money Communication

Money and relationships can be difficult to negotiate. One person thinks they are the saver while the other is an unnecessary spender. One likes talking about money while the other avoids the subject, repeatedly.  Because money styles can create disharmony in a couple, here is a huge tip to alleviate tension in money relationships.

Money conversations may be easier to avoid than to have but avoiding money conversations are a detriment to strong relationships. Instead of avoiding money conversations, bring up a topic where you can learn about your partner’s financial upbringing. Ask a question like: What was money like growing up for you? How was money talked about when you were little?  What did you do with money when you were little?  And just listen, without inserting a judgmental or comparative comment. It is essential to understand each other’s attitudes and behaviors around money before trying to affect these attitudes. Nobody wants to feel shame or guilt around a habit they want to break but can’t. They want compassion, encouragement, and empowering support. They want to feel capable not unable.

Money is a very personal area in our lives, so learning to talk about money and how you can put frameworks around money in your relationship, is key. When considering frameworks to build around your financial life, ask each other questions like: What does budgeting mean to you? How have you successfully used it in your life? Where has budgeting been an issue for you? How can we create limits that work for each of us and support what it is we want to accomplish financially?

Money is a topic that can become a strong partner to relationships. Transform judgments, accusations, and disappointing attitudes to questions of inquiry, encouragement, empowerment and support.

How Sustainable is Debt, Really?!

Debt has become ubiquitous but is it sustainable?

Just one year ago, the Feds reported that consumer debt had increased by another trillion dollars since 2013. $1.6 trillion in school loans, $1.4 trillion in auto loans and $1 trillion in credit card debt.

Young adults pay for education as if it were a home with no promise of jobs at the end of the college experience. Car financing has become so easy with leases instead of ownership, and credit cards are almost a prerequisite to doing business with some companies.

It was only two generations ago that baby boomers were introduced to the “magic’ of credit cards. Before then, it was cash or a benevolent extension of credit between a known retailer and customer. Today, credit cards finance lifestyles, rather than fit into a financial plan or strategy for financial control.

Accumulating debt can be easy while getting out can be very difficult. Some find they must declare bankruptcy to right their financial behaviors. Some gain help from debt reduction programs.

I think it is important to keep your financial picture in front of you, so you are aware of your spending habits versus your earnings. Watch over your spending monthly with quarterly and yearly actual monitoring of your spending against its budget.

As money is not all about spending, it is important and beneficial to add a component of savings and investing to your financial behaviors. Having savings will give you a sense of freedom and responsibility as you watch money accumulate in your own account for emergencies. Investing gives you a sense of getting ahead and feeling of confidence.

Are you like the Egg Farmer or the Chicken Farmer with your Money?

There once were two chicken farmers. Each had a different perspective on the value of their product.

The first farmer valued his eggs. These eggs not only fed his family, they were also a hit in the markets where they were sold. He enjoyed the income his eggs produced He knew this was his security. He counted the eggs every day, minimized the breakage and got them to market quickly. He did not pay great attention to the chickens as he saw them merely as means to an end. He focused on the eggs. If a chicken didn’t produce the targeted number of eggs he had for that chicken, he replaced it with another chicken. His product was the egg.   

The second farmer raised chickens. Her chickens had diverse values to this farmer. They represented growth as the chickens themselves could multiply, providing her a permanent renewal source of fertilizer, food, and little chicks that grew to be chickens. They could be sold or added to the flock. These chickens also represented a source of nutrition to her family and the public, when their egg laying days were over. The chickens also produced eggs, another source of nutrition and income to this farmer. These chickens were well cared for and protected from predators and viruses.  The cost of the care was worth the diversity of income and sustainable growth to this farmer.

With money, some people are like the first farmer. They tend to look at money as having one use: income. like the egg farmer. Other people are like the second farmer. They view their money with a diverse perspective, encompassing growth and income.

Which farmer are you most like?

Which farmer would you like to be?

If you want to transform your money perspective, the Money Focus program is a program you may find useful in transforming your money anxieties to money mastery.  It takes you from where you are with your money behaviors and habits to where you gain control and mastery over your use of your money.

The egg or chicken farmer, which are you? Which do you want to be?

3 Smart Ideas to Manage your Money for Two Incomes

It’s one thing to gain mastery over your own money behaviors and habits but what about when you are in a relationship and the other person’s history, stories and standards with money may be very different than yours. Then what?

In my decades long work with people in helping them gain mastery over their money, I have seen many scenarios undermine couples’ trust with each other over money. Usually it’s a lack of an agreed upon system for money that undermines relationships with money and derails communication between them about their finances.

It’s common for couples to use one person’s income for the basic needs and living expenses while the other’s income is used for the extras like vacation, entertainment, home improvements and upgrades.  But what happens when one person loses a job or has a long term illness, or is on commission and earnings drop?

This system, like many system, may work, when things run “as planned.” But it is smart to think of a contingency plan.

Three alternatives that I like people to consider are:

1      Allocate percentages of both incomes to basic needs, discretionary spending, retirement/investing, donations, and savings. This way, the one with the variable income, knows their contributions are always part of the family “budget” and overspending is reduced when windfalls come in.

2      Determine a yearly budget for savings, investing, donating, basic needs and discretionary spending. Then allocate who and how each will be responsible for that area. Be clear about expectations and possibilities that could impact commitments made by each of you. Develop a system on how to deal with these possibilities that work for both of you.

3      Put all your money in the same account, then allocate to your categories according to agreements you have previously made. Be sure you allocate money to your own spending account about which you do not have to justify to the other person.

No matter which of these systems, another you adopt when there are two incomes, be sure to check in with each other monthly, to see how you each feel about the system you have agreed to use and tweak your agreements as appropriate. Remember to talk to each other respectfully and with the intention of finding a solution when one is needed, rather than attacking each other. It’s smart to manage your money.

Get Comfortable Talking about Money, Because Money Rocks

Money is still seen as a taboo subject. For some it’s considered rude to bring the subject up. I think some of this is because people are uncomfortable on how to broach the subject of money.  They don’t want to appear intrusive or jealous, or prying so they shun the subject or take it to the other extreme and become judgmental. They become reactive rather than responsive with money.

I like money and I like talking about it. It is fascinating to me to learn how people view money, what they do with it, what their fears about money are, what they like about money, how difficult it can be for them to talk about money in a relationship without setting off triggers.

Money is so much more powerful when you feel comfortable enough with it to be able to talk about it to discover what money means to you, how you can better deal with it. It is much freer than talking about money under judgment and unspoken expectations.

To take money out of the drama club, keep conversations about money inquisitive rather than judgmental, neutral rather than adversarial. Consider your intention before talking about money. Is it to scold, to judge, to imprint your money principles on another? If so, turn that judgmental attitude on yourself and ask yourself why this bothers you to the degree it does? What does the other person’s behaviors threaten in you? Is the money conversation to understand another’s perspective on money? If so, this can be a great pillar of support to them on their journey to money mastery.  They will be more likely to let you in to their life with money and partner with you on strategic conversations about money.  

Three sets of questions I like to use and bring to you for more engaging conversations on money are:

Question 1: How did you see money being used, when you were a kid? Follow this up with: How did you use money when you were young? How do you use money differently today?

Question 2: Which is easier for you: spending or saving? How is that affecting your life with money? This is followed up with: What two habits are you proud of sustaining for a productive life with your money?

Question 3: What does money mean to you? How does that align with what you want money to be in your life? How can I support you in what you want your money to be for you?

We tend to regard money in our own unique perspectives with our own history, stories, and experiences around money. It’s freeing to invite someone into a supportive conversation about money because… Money Rocks

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.

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.

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.

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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