Generosity Can Pay Long Lasting Dividends

Wow, money is going out to individuals, businesses, institutions, and non-profits. This not to say it’s enough, that’s another conversation. It is to say that is a gesture of help in crisis. This is a tremendous gesture, certainly the first time in my life to see the government allocating money so broadly. I think this could be a game changer. Time will tell. What do I mean by being a game changer?

We thrive on our independence, our sense of self-reliance, making something of ourselves. We applaud these traits. But sometimes, things can happen out of one’s direct or immediate control and assistance is greatly needed. We are there. This is when generosity is welcomed. 

I think this can become a defining moment when we understand the importance to assisting, quickly, to ease some tension. This is distinct from enabling or casual hand-outs. This is about casting out a net for those for whom a net keeps them afloat rather than falling into the mode of surviving.

For further thought, I pose this question: How can we be generous, supporting growth and self-reliance without sacrificing security, without enabling unhealthy behaviors?

The Key to Help you in this Financial Quagmire

The stock market feels like it is uncontrollably gyrating. One day it’s careening downward. Then it tries to recover only to slide down again, then inch back up, then…

It’s situations and times like these, uncertain and alarming, that can bring out deep emotions towards money. Some of you may feel like your plans for retirement have just been shattered, and not because of anything you’ve done. You might feel at a loss about how to make your finances better; you might feel that someone “did something to you” because this is not anything you would have done to yourself! Others may feel that plans you were making with your money just got ripped apart and again, not by your own doing. You feel resentful or victimized as you can’t “normalize” your financial position. These feelings of victimization, of resentment, of anger towards a condition you did not create can leave you vulnerable and reactive when talking about daily money responsibilities and needs with a partner, spouse, or family member.

Although these reactions are common, they are often not productive and can result in actions or conclusions that can be destructive. Yes, the market is down. Yes, you are angry about it. No, this does not have to trickle into other areas of your life. When it does, I recommend asking yourself this question: “What is actually making me feel __________ (angry, frustrated, out of control…?) And listen to your response. Get clear on what it is that is bothering you. Then, address that specifically. 

For example, if you feel like you have lost opportunities with your money, acknowledge that feeling. You may have. I lost opportunities both in the crash of 2000 and the one in 2008. But, as much as I wanted to wallow, I realized it would not benefit me to do so. I regrouped. I had to.  Let this tremendous disappointment become a catalyst to build stronger resilience and resolve.

If you are frustrated and feel hopeless because you cannot change your financial portfolio, or your monthly income, this is the time to hunker down and reframe your financial picture. Reduce the extras, get creative, and find support by talking to people in your communities about  how they are reallocating their financial resources. Watch movies to see how people have persevered through unlikely odds (Touching The Void or The Dawn Wall come to mind). Rebuild your “center” so that you feel more in control of your life, more than you were before this financial whammy hit.  

You can come out of this stronger than you came in, more in control of your life. It will take asking yourself some important questions, listening to the answers that can guide you to rebuild your strength and your center. It will take focus and resolve. You can do it! Contact me if you need further conversation to assist you.

mother handing key to daughter [PNG Merlin Archive]

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.

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

Learn Where Life and Money Intersect for Money Mastery

I received a call from a gentleman who was referred to me. He was concerned about what his kids would do with his money, once they inherited it.

He told me he spent fifteen years building a company that he sold to another company for a generous profit. He said this new cash and stock infusion was significant to him. It represented an achievement he had worked hard to gain. He knew that the money was enough for he and his wife to live on and enough for his kids to benefit from but that’s not what he wanted the money to do. “I don’t want the money to provide so much security that life becomes a series of reality tv like experiences for my two teen age kids, caught up in the moment without any particular drive or interest. They’re already putting pressure on us about increasing their allowances and buying them new cars. It’s gotten tough on my wife and I to deal with this without feeling resentful.”

As our conversation continued, he revealed that money was never given to him as a child. He had to work for it. His wife also never had a lot growing up although she was given her parents’ car when she was 16 with the knowledge that she would have to turn it over to her brother when she was nineteen and he was sixteen. They couldn’t understand or appreciate their children’s covert and overt demands for money.

After a couple of meetings to understand their concerns and objectives, we decided to put together a 3-part financial program for the family. The first section was the “Financial Conversation.” This gave the kids an opportunity to express what money meant to them, their experience with money and what challenges they had with money. Their parents could only ask questions if they needed clarification on what was being discussed, not questions to judge or criticize. Then the parents had a chance to talk about what money meant to them, their experience with money and challenges they have faced with money.

Doing this in an environment where each participant felt like they could say what they wanted without fear of reprisal or judgment was crucial.  Each member came away from that meeting with a greater understanding of what money meant to themselves and to each other. This created a bond between them which we are now using in an exercise which involves an experience around money that the kids are doing as a team. They will report on their outcomes at the next meeting.

It is important for life and money to intersect so they can support each other rather than conflict with each other. It is critically important to do so in families where money matters so money and life can each be talked about with understanding and purpose rather than with judgment and directives.

3 Tips to Sustain Family Wealth for 7 Generations

Passing wealth is usually done with the help of well-crafted documents by estate planning attorneys. But is this enough? It is if all you want to do is pass assets. It’s not if you want to keep the family intact for generations because wealth is more than the assets.

Wealth encompasses, in addition to your financial assets, your values, your philosophy and beliefs, your family culture, as well as the story of your significant experiences and how they shaped you. All these are just as important when passing wealth to future generations, as passing assets. Without these additional components, your family runs the risk of losing its wealth and all it stands for, within 3 generations. Studies by the Williams Group have corroborated this unfortunate outcome. Phrases like shirtsleeves to shirtsleeves within three generations have pointed to it.

Families have concerns about how money will affect future generations. Will wealth make their children/grandchildren/greatgrandchildren lazy, spoiled, unmotivated, rudderless?  Many families do not talk to their children or grandchildren about their wealth, their (the children’s and grandchildren’s) roles with the wealth or what the purpose of the wealth is for the family as the family grows from the first to the second, and third generations.

It is difficult to have these conversations without a road map and without the appropriate tools to use when talking about sensitive and difficult topics. How can you start?

First, begin by identifying what is important about the wealth to your family. Develop and communicate the “why” of the wealth. This will include talking about your family values, the purpose for the wealth, how your values impact the use and growth of the financial wealth

Second, engage in experiential teams to develop and nurture leadership strategies for the use of the family money such as philanthropy, higher education, or funding homes.  Educate the family about financial literacy and productive financial behaviors.  If family members are young, start them on a course of financial stewardship. If they are young adults, have them team up and develop a philanthropic family initiative and lead this initiative through its formation.

Third, hold meetings where you use active listening to understand. Let each person speak on the topic at hand without interruption. Make sure intentions are communicated and understood by all family members. Seek to connect rather than to win an argument.

Sustaining family wealth so future generations can thrive is about supporting collaboration, respect, trust, and retaining an environment built on communication that develops the family’s agreed upon common purpose.

When 2 Should Become 1 with Money Allocations

When we partner up with another person, we tend to retain our separate phone numbers, two earning sources, our own credit cards and our unique views on money.  Often, it’s our unique views on money that can create tensions and undermine relationships. After all, money is one of the top reasons for divorce. And as a mediator, I am often called upon to facilitate new money frameworks for families, ones they can agree to and build upon for financial peace.

In dual income families, I find that one person’s salary is often used for basic living expenses while the other person’s earnings are used for discretionary expenses such as vacations, restaurants, entertainment and home furnishing upgrades.

This may work well initially but as earnings, lifestyles, and interests change, conversations about money end up lost, avoided or become weapons of assumptions. Because earnings can change for one person more dramatically, or more often, than for their partner, allocating percentages to the family budget can avoid or reduce the tension that personal finances has on the family’s tranquility.

What is easy in other parts of a partnering life, such as separate cell phone numbers, separate hobbies, and different cars, money needs to become an area in which there is harmony for peace to reign at home.

I recommend that you set up a time to talk about how to use percentages of your separate earnings for more harmony with your blended financial life.

It’s Important for Women to be Confident with their Money

I have always enjoyed being a steward of money. Even as a kid, I would count my money; I was excited to open a bank account; I would plan on money expenditures, I thought about money and how to best use it.  As a young adult, I thought about how to ensure I had extra saved money; I enjoyed the world of investing, although, as a woman, back then, there was not a lot of support for women in money matters.

So, I was stunned to recently read an article about women and money that included sobering findings from a Fidelity Investments Money FIT Women Study. Surveying 1,500 women, this survey found that 8 out of 10 women don’t talk to family or friends about money. That is chilling to me. The study also revealed that 50% of those interviewed, mostly Gen X and Yers, said they are nervous talking about making financial decisions! What the what the?!

Even today, where so much is available and expected of us, it seems we don’t include financial literacy as an area to master. As a result, and according to the Fidelity study, women have a confidence gap when it comes to financial literacy.

Is this true for you? Do you feel yourself avoiding money conversations? If so, what can you do to change this behavior and mindset. Here are three tips to begin your positively affect your relationship with your money.

  • Take a moment to answer this question: How do you want money to play an active an enabling role in your life? Answering this question allows you to finally understand what money means to you. Knowing this gives you clarity about how you really view money. It may be that you don’t get money, or, you don’t respect it or, conversely, that you want to get a handle on it but don’t know how.
  • If it is easy for you to accumulate debt and spend more than you have, ask yourself: What is in it for you to continue this habit? Really stop and respond to this with clarity. We tend to do things either because there is a benefit to doing so, because we want to sabotage ourselves, or because we are avoiding dealing with the topic of money.
  • What first step can you commit to make a, one, not all, just one, present unproductive habit move into the shadows of your life rather than being in the driver’s seat to your life? Taking a small step can begin a journey of steps that eventually become a pathway to sustainable and successful habits and behaviors around money.

Need more help? Contact me. Having women be successful in life with their money is important to me! I hope it is to you, too.