Acknowledge Your Money Behavior

financial management

I’m trying to get to the root of money behaviors. This topic is becoming an annoying bug buzzing around the inside of my head.  Because I spend so much time reading and researching money issues, it’s outside of my faculties to conceive that others don’t make responsible money decisions.  I am constantly reading that more than 50% of pre-retirement workers have little or nothing saved for retirement, and I can’t wrap my mind around it.

Money scripts, just like any other psychological scripts, are clearly the driver, but it’s also about education, or the willingness to learn.  Most adults are struggling to manage their finances, and many concede that they don’t know the basics.  For young adults, there’s no formal education for personal finance, and high school graduates have no idea what to do regarding self-support.  College graduates are burdened with student loans without any idea how they’re going to manage the payments.  Many don’t know how to anticipate real-life expenses and get quickly overwhelmed.  They get blindsided by the multitude of costs, using credit cards to pay for necessities, and enter the danger zone of perpetual debt.

By not knowing the first step, or knowing how to manage all the pieces that make up a comprehensive, effective financial playbook, individuals retreat into ignorance.  That’s never good.  Those that choose not to address their financial issues too often find that eventually their money issues are running them, not the other way around.  Credit that’s not managed properly, spending money that one does not have, letting emotions control money decisions.  These are just a few.  Some money issues are so extreme that they upend a person’s life, leaving the individual with lifelong debt or substantial losses of savings.

Money Scripts

In conjunction with education, the money script of the individual deserves acknowledgement.  If you’ve read any of my previous material, I’m a huge fan of Dr. Brad Klontz, the psychologist responsible for coining the phrase.  All the education in the world will get thrown to the wind if the person possesses a destructive money script.  The money script will collide with the education, and will win in the end.  That’s because the money script is generated from subconscious beliefs.  The person may not even realize they’re displaying certain behaviors.  The human brain works that way, it’s part of survival.  We learn things that work for us and there’s always a payoff for doing what we do.

I intend to be a teacher of the elements that result in a sound financial setting.  Once the elements are part of everyday awareness, it becomes easier to process the combination working together.  Starting out may not be easy, but a strong goal with small rewards along the way will result in an increase in quality of life and overall contentment.  By chipping away at understanding one aspect at a time, it all comes together.  The sum is truly greater than the parts and financial harmony can materialize.

Money Behavior

Money decisions are controlled by money beliefs.  The financial mindset, or money script, is responsible for what goes right or wrong in a person’s money life.  Because money scripts propel actions, they deserve acknowledgment and recognition.  Money scripts are based on unconscious beliefs and can be tough to uncover; it requires deep thinking and self-reflection to jiggle these views from the brain tunnels where they’re nestled.  Some are good, some are bad.  Everyone thinks they are right in their own head, therefore, recognizing false beliefs and irrational judgments calls for a mature attitude adjustment.

Ideally, money behavior must fit the environment of the individual.   When the actions don’t fit the scenario, chaos ensues.  For example, someone needs to save up to move into their own apartment because their parents are selling their home and they must make arrangements for their own residence.  Instead of saving, they continue to spend irrationally.  That individual’s actions are not in accord with their needs.  They continue to blow all their money instead of saving to cover a basic need (shelter).  Similarly, someone that wants a new home or a new car fails to save, despite their frustration.

Because their money scripts are so deeply embedded, they will continue to trigger detrimental behavior even if the results are disastrous.  Unfortunately, the victim of their own behavior doesn’t see their role in the movie.  Others are blamed for the circumstances without a clue as to how to apply alternatives or initiate another possibility.  The key is to find a script that fits the stage of the person living it.

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Intuitive Christmas Spending

Christmas spending

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Christmas time is coming and it’s my favorite time of the year.  I love the lights, decorations, and parties.  The celebrations bring people together, maybe for the only time in the year.

It’s also when retailers start salivating, anticipating crazed shoppers grabbing as much as they can hold.  For e-tailers, the online ads and Black Friday emails have already started rolling in.

In light of money management, we should take the consumerism down a few notches this year.  Back when malls were the popular shopping venue, I remember reading an article about post-Christmas overload.  The mom recounted that the mall puked on her living room floor.  Her kids didn’t know what to play with first.  Her regrets led to a personal promise of a different Christmas Future.

I know how much fun it is to watch kids unwrap gifts.  Sometimes, they’re so excited they mean to throw the wrapping paper in the air but instead throw the gift in the air and hold on to the paper.  Parents like to give and give, maybe giving more than they got when they were growing up.  That makes Mom and Dad feel better about themselves, but overindulgence isn’t always necessary.  Even children, the little wanting scamps that they are, value relationships more than things.  You’ve never heard anyone say that they didn’t get enough toys when they were growing up. Continue reading “Intuitive Christmas Spending”

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Financial Planning Workshop Is A Success

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I’m conducting a personal financial planning workshop at a local bookstore.  In three sessions, I plan to provide an overview of the following aspects of financial planning: saving, spending, investing, retirement, and insurance.

The first session, this past Thursday, was a success.  A small group showed up representing all age groups.  I started with my usual introduction, explaining how each person’s mentality towards money drives their money habits.  With the following visual, I outlined the topics that, when combined, result in balanced financial management.

financial planning

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4 Super Easy Ways to Start Investing – Today

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Start Investing Now

I continue to hear that people are confused about how to start investing.  Honestly, I don’t understand such bewilderment.  If you ask me, investing has never been easier.  Maybe before the Internet, but not now.  There is so much information out there, no one should be at a loss. However, money mentalities are responsible for this.  Everyone has their priorities and if managing their money is not near the top of the list, it gets forgotten.  If someone is immersed in their career or other priorities, their money mentality takes a back seat.  Totally understandable.

Learning how to invest can be a lifetime endeavor, and a confusing one.  With the number of available investments, it can be dizzying to even attempt to understand it all.  Dizziness leads to zone-out, and ultimately, non-action.

Here are a few remedies to ensure that you are participating in the world of investments.

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Retirement Planning – Learning Checklist 5

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Planning For Retirement

“I have to work after I die to pay for the funeral.”  I overheard this comment from someone that looked like time was not on his side.

What’s happening?  How are people stretched so thin that they feel they can’t even afford to die? I know, salary growth issues are depressing and wealth inequality is making headlines on an almost daily basis, however, we still live in a country where jobs and opportunities are alive and well.

For the people living paycheck to paycheck, there’s a need to closely examine why that is.  If incoming money doesn’t cover all living expenses, it’s time to make a change.  That means moving where income meets or exceeds the cost of living or an increase in income sources is needed.   Translation: better job skills in the form of education or training.

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Money Learning Checklist 4 – IRAs

money management

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An Individual Retirement Account (IRA) is a great way to accumulate a retirement stash.  It’s also a great way to protect asset growth and investment earnings from taxation.

I highly recommend contributing as early as possible.  IRA contributions can begin when an individual has earned income.  Therefore, it can begin with a teenager’s part-time earnings.  Visit your favorite bank or online broker and open an account if you don’t already have one.

Learn what your maximum contributions are

IRA contributions come with conditions.  There’s a maximum amount that can be contributed and it can change every year.  Know what yours is.  It’s based on your filing status, married vs. single, etc.  The next condition to reach is eligibility for a tax deduction.  Again, it depends on your filing status and whether you participate in your employer’s retirement plan.

For employees that participate in their employer’s retirement plan, a full or partial deductible contribution is still a possibility if the amount is less than the range specified for the type of filer.  You can easily find the current year’s table for the income ranges by filing status by doing an internet search or by looking in the IRS publication.  Notice that I’m not spelling it out, it’s up to you to gain some awareness.

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Money Learning Checklist 2 – Spending

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What a time to be writing about spending.  As I watched Hurricane Irma wind its way toward Florida, I can’t wrap my mind around the amount of emotional and financial devastation.  This would be a good time to think about an emergency fund that is funded slightly or not at all.  Yes, I know insurance covers some costs and FEMA comes through, I lived through Hurricane Sandy.  But I saw a Facebook post the other day from a Florida resident explaining that she wasn’t evacuating because she had no funds to leave.  I remember the same from New Orleans residents when Hurricane Katrina blew through Louisiana.  I can’t imagine not having an emergency fund to escape a dire situation, but, according to the stats, it’s a common position.

Let’s get this straight: Less spending = more emergency fund.

I request your fixation on the next two suggestions.

Entertain the “Enough” mentality in your life

If you reach the Enough mentality, mark the day on the calendar.  It’s a worthy milestone of your financial maturity.  Too many people don’t know what ‘enough’ means.  Marketers love these people and are happy to indulge your lack of ‘enough’.  ‘Enough’ means that you have reached a saturation point with your personal merchandise, take-out dependence, or whatever it is your bank account is hemorrhaging from.  It means that you’re happy with what you have and don’t need to cure boredom by spending endlessly.  Start feeling OK with what you have.  You don’t need any more clothes, furniture, shoes, wall hangings, candles, tablets, monthly subscriptions, sunglasses, makeup, cologne, curtains, or car accessories.  Live with what you have and realize that you can live without, too.

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Check out my Facebook page

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If you haven’t visited my Facebook page, you are missing out on some great money information.  I pull a variety of interesting money articles from all over the World Wide Web.

Check it out and Follow or Like!

Thoughts on the money Facebook page

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