behavioral finance

How To Make Worry Melt

How to make worry melt: As an expert worrier, I often wonder why I worry, even when I know the answer: Worry gives me a (false) sense that I will be prepared and in control. It’s my fallback when I feel out of my league.

Take this example. One of my biggest worrying times happens before I head to the airport. What am I so worried about? Unlike many, it’s not the actual flight. It’s about missing the plane. It feels silly to even write this.

And yet,

Butterflies in my stomach.

Little waves of nausea.

Tight chest.

It happens nearly every time.

And I have coping mechanisms: I tell myself things like, “Breathe.“ “Calm down.” “It’s going to be ok.” I even have a special spirit animal – a deer – that I think about to help me feel better.

Additionally, as a result of this predictable worry, I have an irrational need to leave home at least two hours ahead, get to the gate an hour before the flight, and, when I get there, to sit where I can see the gate agent and the boarding door.

Then there is this acute physical transformation. Once I can see the gate and hear the agent, my entire nervous system relaxes. It feels like the worry just melts.

Expected and Unexpected Worries

How silly this feels. And yet, it seems I am not the only one to worry about expected and routine things like a departing plane. It’s expected and routine, yet a source of great worry, that teenage children will start driving, and that 90-year-old parents should probably stop. In working with money, it’s a source of great worry, yet expected and routine, that stockmarkets, interest rates, and gas prices will rise and fall repeatedly.

Upcoming retirement is expected and routine, yet a source of great worry (and excitement). Understandably, it’s a big step into an unknown future. That can especially bring on the jitters.

Adding to everyday events are unexpected random ones, like pandemics. Further, sudden market meltdowns, tsunamis, cancer, dementia, layoffs, election surprises, terrorists, and hacker attacks are all things we know aren’t probable, but are possible.

Just checking in – how’s your heart rate now? Butterflies? Tight chest?

Although we might prepare as best we can, worry on top of preparation helps some feel as though we are doing something about the problem. But what toll does worry take? Does it help us to prepare that much better? As a result of worry, I’m quite sure I have shortened telomeres and life expectancy. That’s a pretty high cost.

How To Melt the Worry Away

When I get to the gate and see the agent, I feel the worry melt away.

But it’s strange – I don’t think too many airline employees worry about the same thing I worry about. There’s something about having exposure every day to systems and knowledge that produces confidence. Aviation is now one of the safest modes of travel in the world. While airplanes are subject to all kinds of random threats, there are protections in place against as many as possible. Some are fairly simple, such as passengers wearing seatbelts. Others are fairly complex, like running through a 57-item cockpit checklist before every takeoff and landing. That’s what professionals of many stripes get paid to do – develop and run proven processes, and then amend them as lessons arise.

In other words, having a specialized understanding and process makes it easier to

  • distinguish what’s actually controllable,
  • accept what’s not, and
  • feel confident the process will handle 90% – 95% of unexpected random events.

Airlines have meticulous training and checklists, but accept there will be equipment failures, unruly passengers, weather delays, technological shutdowns, and other events we haven’t yet seen.

Melting Money Worry

Similarly, what most people worry about with money isn’t what most financial professionals worry about for them.

Most financial professionals know what can be done to reduce risks, and what can’t. While we might make client-specific plans, we also know there will be unexpected random events. We put plans in place to prepare for both as best we can. For some people, having that kind of professional help and confidence helps money worry melt away.

For me, worry melts upon seeing that I’m part of the boarding process. For others, it’s being part of a financial planning process.

Either way, the exhalation of a deep sigh, unwrinkling eyebrows, and shoulders unhooking from our earlobes send the signal the professional and the process have provided what we come for after all – the feeling it will be ok and we will get where we want to go.

When have you felt worry melt away? Who were you with? What seemed to be the key for you?

Leave a comment for readers below.

For more psychology of money, tax, and funny video tips, subscribe to the award-winning monthly e-letter, “The View From the Porch,” at https://bit.ly/3t2uwfn. Or check out Chapter 6 of the book, The Mindful Money Mentality: How To Find Balance in Your Financial Future.

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What’s Your Closet Type? Thrifty Penny, Generous J-Lo, Savvy Suze or Imelda Galore

What’s your closet type? Thrifty Penny, Generous J-Lo, Savvy Suze or Imelda Galore

On a 2004 visit to Ghana, a west African country, I noticed lots of people wearing second-hand Western clothes. While others donned beautiful traditional garments of their country, it was equally common to see second-hand t-shirts, khakis and jeans. The second hand clothes were sold in nearly every street market. My hosts told me these were commonly called obruni waawu, which literally means, “dead white people’s clothes.”

I understood that the clothes looked like those of white Westerners, but “Why dead?” I wondered. Before long, an answer dawned on me. Maybe to Ghanians, many of whom don’t have closets, the only reason a white Westerner would give away perfectly wearable clothes would be because they are dead. To them, clothes might be something you use up until the day they are no longer needed at all.

I don’t know if this is the actual reason, but it led me to compare and wonder how often we buy new clothes and get rid of old ones. For some, it’s quite frequent, and not so much for others. Having seen over 400 budgets in my lifetime, I’ve noticed spending on new clothes that ranged from $2,000 to $50,000 a year. But what I have not asked and do not know is, how often are the old clothes being thrown out or given away?

Money Velocity and Money Supply: Closet Velocity and Clothing Supply

There are two concepts in economics that come to mind – money velocity and money supply. Money velocity refers to how many times a dollar changes hands in an economy. There is also money supply, which is the amount of money available in an economy to be spent at any time.

Taking this to the closet analogy, what would closet velocity and clothing supply be? Let’s say closet velocity refers to how often the clothes on hand are changing. This would mean not only how often new ones are bought, but how often old ones are discarded or donated. Correspondingly, the amount of clothes we have on hand at any point in time would be our clothing supply.

Taking four combinations from these two concepts and having some fun with the names, what’s your closet type?

Closet Type: Thrifty Penny, Generous J-Lo, Savvy Suze or Imelda Galore

If you have a low clothing supply and low closet velocity, you might be a Thrifty Penny closet type. This means:

  • you have a small number of clothes that you wear until they have holes, stains, or are otherwise unusable before you replace them
  • you feel ok not being trendy
  • there aren’t a lot of choices of what to wear, and
  • you don’t require a large closet.

Conversely, if you have a high clothing supply and high closet velocity, you started with lots of clothes, are buying lots of new clothes, and are also giving or throwing away old or never-worn ones fairly frequently. This would be the Generous J-Lo closet type.

  • You have a large closet with lots of choices and
  • the latest looks, and
  • you feel ok only wearing a few items a few times, once, or never because you are going to give them away anyway.

If you have a low clothing supply and high closet velocity, you have a small, actively-traded closet. This would be the Savvy Suze closet type (after Suze Orman, who claimed to own one pair of earrings, her signature diamond studs.)

  • New clothes are entering constantly, getting worn, and old clothes are constantly going out.
  • You always look up to date from a carefully curated closet.

If you have a high clothing supply and low closet velocity,

  • you have a large closet of seldom-worn items, with plenty to choose from, and
  • not many clothes going out.

This would be the Imelda Galore closet type, as in Imelda Marcos, the in?famous Phillippine first lady with an enormous shoe collection.

What Could Closet Type Say About Your Money Attitudes?

How we spend on clothes can indicate one aspect of our attitudes about money. In her work with Money Habitudes(TM), Dr. Syble Solomon identified six primary attitudes toward money: spontaneous, selfless, targeted (as in with goals), security, free spirit, and status.

Anyone with a puritanical upbringing might see the last one – “status” – as a negative. Status is something many people want but are supposed to pretend not to, right?

Rather than taking a strictly negative view toward status, though, Solomon recognizes that status purchases like clothing are needed to help us make a good impression. However, if you tend to spend lavishly on clothes you will never wear, or spend more than you can afford for the sake of trendiness, you may have a tendency toward status overspending. Conversely, if you show up in old or frayed clothes a lot, you may have a problem with status underspending. Spending enough so you can suit up and show up when it matters, with care, fun and spontaneity, shows a healthy attitude about status spending.

What About You?

With Dr. Solomon’s more balanced view in mind, I am going to take a second look at my closet. I don’t plan on being a dead white person anytime soon, but I may find potential obruni waawu destined for Goodwill or, ultimately, Ghana.

Which closet type do you best relate to? Did you find yourself spending more or less on clothes during the pandemic? How did the pandemic change your closet? Have you changed your donation or throwing-out patterns? Leave a comment below.

For more on conscious spending patterns and balancing old with new, read Chapters 2 and 4 of The Mindful Money Mentality: How to Find Balance in Your Financial Future.

And for monthly tips on money psychology, tax savings, and good humor, subscribe to the award-winning e-letter, “The View From the Porch.”

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Financial Anorexia? Stuck like Scrooge

blank stare or self-doubt emoji

Financial anorexia: Stuck like Scrooge. What is financial anorexia? Financial anorexia is a type of spending disorder. People who suffer from the eating disorder of anorexia may obsess about food and the number on the scale. People who suffer from the financial disorder may obsess about money and the number on their bank statement. For those suffering from financial anorexia, they never believe they have enough to enjoy what they’ve got.

According to Ken Donaldson, LMHC, a licensed mental health counselor in Seminole, Florida, “Anorexia is characterized by a distortion of perception.” Someone suffering from the eating disorder believes they still need to lose extra pounds, when to everyone else it’s clear they are harming themselves. Someone suffering from the financial one believes they still need more money, when it’s clear they are depriving themselves.

While the eating disorder of anorexia is deadly serious and can be fatal, financial anorexia can be dangerous in other ways – to mental health, friendships, and family relationships. Financial anorexics can seem to be more engaged in extreme deprivation than in enjoying life’s simple pleasures. Family members are most often affected by the wealthy relative whose reluctance, reclusiveness or reticence are, at a minimum, puzzling, but more often, hurtful.

Where Does Financial Anorexia Come From?

According to Donaldson, anorexia is fueled by isolation – the more the sufferer depends upon their own distorted perception, the worse their condition becomes. Ebenezer Scrooge (in the beginning of Dickens’ tale) is an isolated penny-pincher and money hoarder. He is the stereotype of the financial anorexic.

Another root cause can be fear. What are anorexics often afraid of? Stated fears might include:

  • a catastrophic world event;
  • a very expensive health issue;
  • hyper-inflation; or
  • “spoiling” family members or friends.

Certainly some of these things can and do happen. Yet our societal messages, and brains wired to look out for danger, emphasize catastrophic scenarios like these past the point of their actual probability.

Yet, other fears might be at work that aren’t as overt. Unstated fears might include loss of self-worth or security.

Anorexia is also fueled by our cultural norms. Western society still worships conspicuous wealth and Twiggy-like figures. “You can’t be too rich or too thin,” sums it up.

Most people understand the “too thin” part, but “too rich”? Is it possible to be “too rich”? Financial anorexics, like Scrooge, typically amass abundant resources. However, their wealth does not come from a healthy relationship with money. They might be “too rich” for their actual needs. Further, the more they have, the more they have to fear losing. The hoarding-like behavior only gets worse the more successful they are at it.

What Can Be Done About It?

At some point in life, many financial anorexics realize, to their immense regret, that they worried more about what might happen, and didn’t, than enjoyed what they actually had.

Exposure to new information sources is one method of help. According to Donaldson, “New information will disrupt the pattern.” Support groups, a counselor, and therapy can provide external points of view. For financial anorexia, a visit with an understanding financial professional, who can provide concrete reassurance, often is a good first step. All of this exposure also helps break the distorted perceptions brought about by isolation.

Sometimes the new information has to come from, unfortunately, a painful life-altering event. How did Scrooge turn around? The Ghosts of Christmas Past, Present and Future showed him more to be afraid of – and how his isolation and withholding were harming others – than the fears he made up for himself.

At some point, it makes sense to ask a few questions:

  • What have all the years of saving been for?
  • How much is too much to spend on seeing family or friends? 
  • How soon is too soon to leave a stressful, unhappy job if it’s taking years off of your life?
  • What is it truly worth to take the trip you have been dreaming about for so many years?
  • How much is too much to spend on self-care like massage, therapy sessions, or a manicure?
  • What if the thing you are afraid of is completely unknowable? What if it wouldn’t be solved with money anyway?

Working With an Understanding Professional

A 2017 study sponsored by the CFP Board supported the psychological benefits of working with a financial professional. The study concluded, based upon a survey of over 800 consumers, that, “Working with a CFP® professional ultimately removes the negativity consumers experience relating to their finances and instead elicits feelings of confidence, optimism, ease, and security.”

Confidence, optimism, ease, and security. Those sound better than catastrophes, worry, and fear.

How do you want to feel about your financial future? Share your thoughts below.

Want more information about financial psychology? Sign up for our monthly e-letter, schedule a call, or check out  The Mindful Money Mentality: How To Find Balance in Your Financial Future.​

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How To Let Go of Money Self-Doubt

blank stare or self-doubt emoji

How to let go of money self-doubt:

What is money self-doubt

Money self-doubt is an inner belief that one cannot trust themselves with a decision about money.

Sometimes these beliefs operate in the background, quietly driving decisions when we don’t realize it.

Other times they’re front and center.

What does money self-doubt sound like?

Money self-doubt beliefs often sound like critical messages:

  • “I knew I’d screw it up.”
  • “I’ll never be good with money.”
  • “If I can’t manage my own finances, I’m a failure.”  
  • “Why am I so stupid with money?”

Money Self-Doubt Origins

Where does money self-doubt come from? 

It could be a single traumatic event or a repetition of harmful moments that lead to flawed beliefs about our financial capabilities. One time being taken by a scammer, or many times being told by an abuser we aren’t capable.

Without counterbalancing mantras like,

  • “You’re still OK.”
  • “You just made a mistake.”
  • “You can do this.”

the self-doubt can take hold.

Society and media also don’t help, offering a choice of money self-image as either, “good with money,” or not. Individual instruction is rarely given in school, or in families, much to our society’s detriment. While financial professionals are often proficient in finance, many are not good educators. A few even try to make money more complex than it is, to keep clients feeling less than sure about themselves.

Case Study: Sondra (not her real name) is a highly educated and accomplished professional. Her parents came from Depression-era families where money was tight in their younger years. Money was never talked about in Sondra’s home, although she was given everything she needed. She grew up with the belief that her parents didn’t discuss it with her because they believed money was something she was not capable of handling. When she went to talk with a financial advisor, he threw so much jargon at her that she was too uncomfortable to admit she didn’t understand what he was talking about.

Money Self-Doubt Results

Without realizing these beliefs exist, we can allow them to influence what actions we take or fail to take. Self-doubt can affect who we allow into our lives, and who we don’t. It can affect our choice of career. Or how we spend, or choose not to, on our own needs, wants, and wishes. Ironically, money self-doubt can lead to overspending with some people, and over-deprivation with others.

Sondra chose a career where she was assured a salary and the chance of a bonus if she worked hard enough. She worked longer hours than she wanted to. She lived minimally, foregoing many comforts and rewards of her hard work. Her dreams of having more work-life balance were put on hold because she never felt financially secure. In her personal life, she chose friends and partners who also didn’t talk about money, leaving a gap in her closest relationships.

How To Let Go of Money Self-Doubt

If you’ve been operating under flawed assumptions, and now you know it, you’ve taken the first step to reset your relationship with money.

What else can you do? Here are 4 suggestions:

1) Be aware of body messages. Self-doubt, sometimes manifesting as shame, has a feeling to it. It might be tightness in the chest, throat construction, shortness of breath, nausea or butterflies. Instead of trying to get rid of the feeling, breathe through it and name it: “I am feeling shame/doubt about a money issue.” Redirect your thoughts to positive truths: You are smart. You are capable. You know how to ask for help. This is something you can handle.

2) Ask yourself a simple question: “Is this true?”

For example if you have a belief that “I’ll never be good with money,” and you had to prove that in a court of law, what evidence do you have? Sometimes asking this question can be one way to help our brain separate facts from fictional beliefs.

3) Call someone supportive to talk about your feelings. (But make sure they truly are supportive.) If you’d like professional help specifically about money psychology, check out the Financial Therapy Association.

4) Become aware of those in your life who are too willing to reinforce doubt-based messages – family members, partners, friends, or even (especially) financial professionals. Instead, seek the company of those who say, “I am confident you can handle this,” and will walk alongside you, not put themselves ahead or above you.

After talking with a friend, Sondra decided to educate herself about money. She began to read books that explained things simply, and take online courses that took a simple approach. Patiently, she interviewed many financial professionals. The more she talked about money, the more confident she became. In the end, she found someone who prioritized her financial education and independence. She began to feel more secure, and gained the courage to consider a daring career move.

The Gift of Letting Go

Letting go of money self-doubt can be one of the greatest gifts we give ourselves to reach peace and security about our financial future.

For more on unspoken money messages see Chapters 2 and 3 of The Mindful Money Mentality: How to Find Balance in Your Financial Future, or this 5-minute video with mental health counselor Ken Donaldson on Money Shame.

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Honey, Ain’t Money Funny? 4 Conversation Ideas

Couples and money honey ain't money funny

Honey, ain’t money funny? Sometimes, not so much.

As Valentine’s Day came and went, a couple struggled with questions about consumerism, the meaning behind gifts, and how money affected their relationship. Whether it was financial inequality, overspending, or miserliness (a la Scrooge), humor was hard to find at a time when they were surrounded by hearts-and-happiness messages.

What can couples do to have a better relationship with money? Following are 4 ideas.

As you try each one, it’s a good idea to plan a special fun reward or celebration at the end. The more you practice at these, the easier the conversations will get. You may find your differences become predictable, manageable, and even laughable.

Idea 1: Monthly Money Date

For monthly money dates, quickies are best. These are for checking the dashboard indicators in your household finances. Agree to limit the conversations to about 15 minutes.

Build in fun and humor by focusing on your progress, positive wins, and gratitude for what you’ve got so far. For big ideas and thorny issues, make a separate date to discuss those using one of the following 3 formats. Then move on to the “real” date part!

A 2 1/2 minute video on 3-Part Money Dates can be found here: https://www.youtube.com/watch?v=7TWFKfF0vRQ.

Idea 2: 48-Hour Relationship Conference

No you don’t have to talk about money for 2 days. What a buzzkill!

Instead, in a Relationship Conference, each partner takes a turn being a pure listener to the other partner’s issues. Being the listener in a relationship conference means saying nothing while your partner talks. You can decide on the timeframe, but make it somewhere between 15 and 45 minutes. You can take notes.

After the first partner shares, take a break from anything money-related for 24 to 48 hours. Allow thoughts and feelings to arise to reflect on what you heard. Then reverse roles. This is the first partner’s turn to simply listen. Then wait again for whatever timeframe you decide – 24 to 48 hours.

Finally, take turns to summarize what feelings and issues came up. Make sure you give space for listening to each partner’s perspective, checking in to make sure you heard them well.

Remember to have an activity planned in advance to celebrate your ability to tackle tough stuff.

Idea 3: Take Turns Active Listening

Another option is to take turns all in one setting being the active listener. Active listening means being fully present to your partner’s issues and emotions without bringing up your own responses or emotions. (Tip: This is really hard for most people who have never done it before.)

You do this by

  1. repeating back what you heard,
  2. checking in to make sure you got it all (“Did I get it all?”), and
  3. asking to hear more about the emotions underlying each statement (“You said you felt excluded. Tell me more about that.”) Once your partner agrees they feel completely heard and understood, then it’s your turn.
  4. Again, remember to have something planned in advance to celebrate and give yourselves credit for your progress with active listening about money.

Idea 4: Ask For PracticeHelp

Are there some money issues in your relationship that seem too difficult to talk about on your own?

Sometimes each of these exercises work best if practiced with a counselor first. And that’s ok. Sometimes we need training wheels before we’re ready to ride the conversation bicycle on our own. Give yourselves the gift of an enhanced relationship by getting some professional tips on how to have a healthy conversation about money.

Finally Feel Free

Remember when you learned to let go of the bike’s handlebars? Imagine feeling that free in your relationship with money and each other. One’s Scrooge to the other’s spending might actually be something you learn to laugh about for years to come.

You know you’ve arrived when you find yourselves saying, “Honey, ain’t money funny?”

For more tips on the psychology of money, subscribe to our award-winning monthly e-letter, “The View From the Porch,” at https://bit.ly/3t2uwfn.

Or, check out Holly’s book: The Mindful Money Mentality: How To Find Balance in Your Financial Future.

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When She’s Better Off Than He Is

when she's better off

When she’s better off than he is: Some couples find finances difficult to discuss when she makes or has more money than he does.

In the July/August 2019 issue of Psychology Today, Esther Perel, a New York psychotherapist, said that women’s liberation has freed them from dependence on men. “But it hasn’t prepared women for men’s dependence on them. Women often have a lot of resentment when they find themselves responsible in the way men have for generations.”

In his blog post, “Why Wealthy Divorced Women Don’t Remarry and Men Do” dating coach Evan Marc Katz wondered whether women might rethink their expectations for the man’s financial contribution to the relationship. This makes sense especially when all other aspects of the relationship are equal. After all, many wealthy men remarry to women who are not as financially well off, and why? Companionship, compatibility, and physical attraction.

If a wealthy man is happy to pick up the tab for trips and dinners, why aren’t wealthy women?

Case Studies Where She’s Better Off

Here are a couple of cases to illustrate the dynamic. I asked Licensed Mental Health Counselor Ken Donaldson for his thoughts on some fictional case studies.

Alan and Donna: Donna is a 53-year-old professor who became disabled after an accident. Her disability is not evident to most people, but at any moment she could be hospitalized. She received a large settlement from the accident. She is making a new life for herself and wants to live well while she can. Alan, her 55-year-old boyfriend, is a painter. He is handsome, romantic and kind to her. Alan does not know Donna’s financial situation. He does know he cannot always afford the restaurants where Donna wants to eat, though. Much of the time she picks up the tab. They both feel awkward about it.

Janet and Harold: Janet is a 52-year-old retired author. Her books have sold enough copies that she can live comfortably without working. Her boyfriend, 58-year-old Harold, had an IT career before he was downsized. Since then he has not found a new job or career that seems to be a good fit. Janet loves Harold’s athleticism, his sense of humor and tenderness. They connect on many levels. The problem is, she wants to travel with him to places like Australia, Alaska, and Europe. Neither Harold nor Janet like the idea of Janet paying for the whole trip. Harold does not know Janet’s financial situation, but he does know she is better off than he is.

Q & A With Relationship Counselor Ken Donaldson, LMHC

Q: How does avoidance of the activities that both couples want to do affect their relationship?

A: This would only add to distance in the relationships. Although both people will benefit from doing separate activities that they enjoy, there is much to be lost by leaving the other out when it is motivated by fear and/or avoidance.

Q: How could each couple stay together in a healthy way?

A: Every healthy, harmonious and lasting relationship is built on the HOW factor: Honest, Open and Willing. Those are the cornerstones that prevent the termites of deceit, deception, distance and breakdown. I believe these cases both require a lot of extended processing and perhaps the assistance from both a marriage counselor and a financial expert would be extremely helpful.

Q: What kind of paradigm shift might they try, and how could such a shift be brought about through seeing a professional?

A: As mentioned above, a qualified marriage counselor, especially one who had experience with these types of cases, can only help. Openness, although not rocket science, is always the best policy in cases like this. If either or both can’t handle “the truth” it says something about the foundation of the relationship, which signals that it needs to be strengthened. Harville Hendrix, author of Getting the Love You Want, has some great dialoguing tools I use often with in couples counseling and in all conflict resolution and intimacy-building situations.

Q: What is your opinion about the line between sharing financial information and keeping financial secrets?

A: It is a fine line at times, but it is also based on trust. Trust is probably the cornerstone of all cornerstones. It’s like poker: Sometimes you have to hold your cards for a long time before you show them (or fold them). But, when the time is right, right action is the only move.

Avoidance leads to more avoidance, and openness leads to more openness. However, it is all based on the level of relationship they want. If they only want a level “7” then maybe total transparency is not needed. But if they want a “10” then, again, nothing will be better than open, honest and willing.

Questions to Ask

Are there aspects of your financial relationship that you would rather keep at a “7” than a “10”?

How have you handled the transition from cards-folded to open-hand in your finances with a significant other?

What would you advise others in similar situations? Leave a comment here to help the reader community.

And if you’d like monthly tips on the psychology of money, subscribe to our award-winning e-letter, “The View From the Porch.”

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Holiday Spending Hangovers

holiday hangovers

Holiday spending hangovers: What do holiday overdrinking, overeating, and overspending have in common? We can get stuffed in over our heads before we know it, leading to regret later. The holidays can test our temptation to overcelebrate. While holiday alcohol- or food-induced hangovers are commonly discussed, spending hangovers can bring about equal regret.

Thinking Ahead

To avoid regret, it helps to think ahead. You might call it an “awareness strategy.” What events are coming up that might bring about a temptation to overspend?

Nowadays, that strategy might start in October. Halloween is now the second biggest holiday for consumer spending after Christmas. What used to be a couple hours of candy collection with a homemade costume and a paper grocery bag is now practically a national holiday. Multi day trunk-or-treating. Elaborate costumes. Yard decorations needing extensions upon extension cords. On November 1, where does all the Halloween stuff go? In the attic, the garage, the storage unit, or the garbage? And what about the candy? Halloween often leads to sugar, spending, and stuff hangovers.

Next comes Thanksgiving, where we stuff ourselves with, literally, stuffing. Some then stuff our brains with football and TV. Some families stuff all the important conversations for the past year into a few hours at the table. The air is stuffed with emotions. And spending can often be a coping mechanism for difficult emotions. It seems all the Thanksgiving hangovers – food, football, TV, and feelings – start with stuffing.

And finally if you celebrate it, Christmas, the king of holiday hangover potential. Must-have new decorations, the tallest tree, fancy food, family gatherings, parties, gotta-get gifts, candy, cake, and alcohol all stuffed into a few short weeks. Moderation choices might start out strong. But decision fatigue can quickly take over. Come January, depleted bank statements and depleted emotions can bring on the same headaches as too much cookies and eggnog.

Thinking ahead to all of the opportunities to spend gives you a head start on avoiding regret later. Ask

  • What is coming up where I will want or need to spend on a holiday?
  • What does the spending event entail?
  • What are alternative ways to achieve my goal for the spending event?
  • Imagine it’s January. When you look at your bank and/or credit card balances, what’s a reasonable figure for you to be at then? Start with that as your goal.

Release Self-Judgment

Before launching into ways to criticize decisions before you have even made them, remember that it’s ok to splurge. It just takes a little thinking ahead, strategy, self-care and balance. Deprivation generally doesn’t work.

Mindful Spending Strategies

For some people, simply having a January bank balance goal is enough to help them stay focused throughout the season.

Others need more concrete ideas. Here are a couple:

  • Plan most or all of your shopping at one or two stores. Buy yourself a gift card for that store with the total amount you can spend that allows you to make your January goal. Ask for your remaining balance with each purchase. When the gift card is spent, you have made your goal.
  • The old-fashioned envelope approach. Withdraw the amount of cash that allows you to make your January goal. Put it in one or more envelopes, organizing by spending category. For some people, watching the physical cash dwindle is the best way to stay focused.

Keep Track

The gift card and envelope approaches are one way to keep physical track of how you are doing on your spending goal.

If you find yourself resisting or unsure about the idea of having a January goal, simply keeping track of your spending as you go can work, too, as a reminder to rein in overspending.

Weight Watchers has used this approach for decades. The best tool of the program for me was the daily journal. Logging what I ate every day had more impact on my diet decision making than any other single factor.

Similarly, when a group of experimental homeowners were given an electric meter next to their thermostat, they used 7% to 19% less electricity than those with outside meters.

So writing down what you spent each day can take the form of a note on your phone, or a physical notepad or journal.

Every bit of awareness can help.

Credit Cards and Overspending

What if you must use credit cards, or really like getting the points? (Although the points rarely work as well as cash back, but that’s another blog post.)

Using a credit card is like having the electric meter on the outside of the house. You never get to compare what you have spent to a predetermined goal. Additionally, psychology studies show that when used in stores, as the credit card is handed back to us it reduces the feeling that we have spent anything. Our wallet looks the same afterward.

To build spending awareness and still use credit cards, sign up for a daily or weekly reminder of your charges and the current balance. (Not all companies will do this, tragically.) Each day or week, transfer your charges for that period from your bank account. At the extreme, you might make 30 payments on your credit card over the holidays, but so what? It’s helping you avoid the hangover.

Public Service Announcement

And a final Public Service Announcement: if you’re concerned about hangovers of a different kind, you’re not alone. There is help. AA.org helps with all kinds of addiction. Al-anon.org is for friends and families of alcoholics or addicts. Or, call a local Certified Addiction Professional for more one-on-one advice.

See our Resources page for recommended books on the psychology of money.

Imagine getting through January with no hangovers!

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What Is Retired Husband Syndrome?

What is retired husband syndrome?

I first heard of Retired Husband Syndrome (RHS) at a book signing in 2013. From across the book section in the exhibit hall, I saw a young man with jet black hair staring at the back of my newly-published book, The Mindful Money Mentality: How to Find Balance in Your Financial Future. He turned it over, opened to the table of contents, flipped a few pages, and turned it over again.

Until that point, he acted like other book-browsers – look at back, flip to front, open to table of contents, flip to back, flip again. Some would then take the book to the register. Others set it back on the shelf. The whole decision took less than 2 minutes.

But this young man took so long reading, I wondered if he might consume the whole book right there. Then I quit watching, distracted by conversation with another attendee.

When I turned back to look for him, he was gone. Figuring he had decided against it, I was surprised a couple of hours later to see he was the first in line at the book signing.

Retired Husband Syndrome – in South Korea

Approaching with an enthusiastic smile, he said “Hello” in a heavy Asian accent. He was from Seoul, South Korea, and said that he thought my book would be helpful to his male clients. Unsure why he was excluding the female ones, I readied my pen to sign, but asked him to tell me more.

“In Asia, we have Retired Husband Syndrome (RHS),” he said.

“I’ve never heard of that. What is it?” I asked, putting the pen down.

“Some husbands spend their whole lives working for a company, and when they retire, they are at home, and it is not good for the marriage. The husband loses his identity because he is not in his job anymore, and he wants to be home with his wife. The wife has been at home her whole life, but she doesn’t like the husband being there, doing nothing.”

“So sometimes the retired husbands do…nothing? They don’t have hobbies or hang out with their friends?”

“Yes, that’s right.”

“Wow. So you must see a lot of marriage problems in your practice?”

“Yes! And it is too bad. They have a pension, but the couples never spend time planning what they will do.” He explained more about the strain on the marriage; the sadness he sees at a time when there could be great joy and celebration; and the effect on their children and the families.

“This makes me sad. Sometimes I am going to be the only person outside of the family who might see it. All of the financial advisors in Seoul could help people with this. This is preventable.”

Retirement Planning Is About More Than Money

I once heard a conference speaker say, “We spend more time planning what we’re going to eat for lunch than how we will spend a 30-year period of our lives.” In the U.S., it’s not only pre-retiree husbands, but also wives, singles, straight, and LGBT pre-retirees, admitting they are at risk for something like RHS.

It helps to clarify how you might spend the bounty of time that increased longevity will likely bring. If you need help planning a fulfilling retirement, find a financial professional or coach who takes as much interest in your time as they do in your money.

You can help stop the spread of one type of preventable international syndrome, and help your future happiness even more.

For more on the psychology of money prior to retirement, tax tips, and a monthly dose of fun, enjoy the free award-winning e-letter, “The View From the Porch.” Subscribe at this link: https://bit.ly/3t2uwfn

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Money: Values, Behaviors, Habits and Change

saving money

Money values, behaviors, habits, and change: Perhaps there is something about middle age, or a pandemic, that creates the urge to examine values, behaviors, habits, and change.

At my 25th college reunion, I had breakfast with a college friend who worked for our alma mater, Davidson College. She had attended lots of reunions.

I asked about her observations of reunion attendees. She said something like, “At the 10-year mark, everyone’s comparing notes – who has how many kids, who has graduate degrees, what they did for vacations, what kind of home they live in, etc.”

In other words, their money values tended to be focused on status.

“By the 25th, nearly everyone has experienced some kind of life event, and they are a lot more mellow. The other stuff must not seem as important.”

So, values shift as life unfolds.

Values drive behaviors, which become habits. When we begin to question the behaviors and habits, we become ready for change. And that’s how growth happens. Eventually this process can work its way into finances.

Beginning to Examine Behaviors – Eating Habits

My own path to behavior change didn’t start with money. It started with eating.

One of my first experiences with behavior change was through Weight Watchers. I was 35 years old, 5’3″ and 15 pounds overweight. I decided that I valued being healthy more than enjoying unhealthy food. I lost 20 pounds and gained 5 back, but kept it off.

How did I do it? Tracking and accountability. Whenever my clothes got tight, I would write down everything I ate. This helped me track and change my eating behaviors permanently.

Ironically, tracking and accountability had come naturally to me with money. I wrote my first budget at age 9, and had tracked my money ever since. This made me a good saver, but later I learned it didn’t necessarily mean I had a good relationship with money.

Conversational Habits

Next I moved to healthier conversation habits.

The values of listening well and feeling heard became more important. I learned that “listening” does not mean, “Wait until the other person is finished talking so I can say what I want to say.”

Listening means to suspend all noise and chatter in my head; and reflect on what I am hearing. To eliminate the noise and chatter, I acquired a rule: Anything that I want to say while someone else is talking, I am not allowed to say.

Like any other habit change, it took conscious effort at first. When I think of something I want to say, I let it go, stay present, and listen. I found that, if I truly wanted to understand someone then what I wanted to say would have gotten in the way of that.

My conversational habits, and relationships, improved.

Money Values, Behavior, Habits and Change

My money habits needed improvement too.

I used to overtrack my spending and worry unnecessarily about it. This led to a habit of denying myself some things that would have been convenient, or just enjoyable. Then, like binge eating, I would splurge on something silly or outrageously expensive. Even though the splurges never exceeded the savings, it created big regret and self-criticism.

This roller coaster of emotions tied to money was one of the hardest habits to break. The shift came indirectly through other personal changes wrought through a divorce. Working structured programs with friends who shared similar struggles helped me identify emotions sooner and do something more constructive with them.

This education helped me write The Mindful Money Mentality: How To Find Balance in Your Financial Future, for people who have difficulty spending their savings in ways that bring joy and happiness.

Examining is Easy; Change is Hard

It is easy to underestimate how difficult behavior change can be.

It’s normal to believe we can simply tell ourselves to act differently. We can “just say no” to cookies after dinner, to quit interrupting, or to quit worrying about financial things we cannot control.

Instead, it helps to have a nudge – a program, a structure, a new discipline, or an accountability partner – to complete the transformation from old habits to new ones.

Before you know it, with new habits, a lot of good physical, relational, mental, and financial growth will happen.

Enough good stuff to share at the next college reunion.

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Honey, Ain’t Money Funny? 4 Ideas For Couples’ Money Convos

Couples and money

Honey, ain’t money funny? Sometimes, not so much. As Valentine’s Day came and went, a couple struggled with questions about consumerism, the meaning behind gifts, and how money affected their relationship. Whether it was financial inequality, overspending, or miserliness (a la Scrooge), humor was hard to find at a time when they were surrounded by hearts-and-happiness messages.

What can couples do to have a better relationship with money? Following are 4 ideas. For each one, it’s a good idea to plan a special fun reward or celebration at the end. The more you practice at these, the easier the conversations will get. You may find your differences become predictable, manageable, and even laughable.

Idea 1: Try a Monthly Money Date

For monthly money dates, quickies are best. These are for checking the “dashboard indicators” in your household finances. Agree to limit these conversations to about 15 minutes. A 2 1/2 minute video on 3-Part Money Dates can be found here: https://www.youtube.com/watch?v=7TWFKfF0vRQ.

Build in fun and humor by focusing on your progress, positive wins, and gratitude for what you’ve got so far. For big ideas and thorny issues, make a separate date to discuss those using one of the following 3 formats. Then move on to the “real” date part!

Idea 2: Try a 2-Day Relationship Conference

No you don’t have to talk about money for 2 days. What a buzzkill! Instead, in a Relationship Conference, each partner takes a turn being a pure listener to the other partner’s issues. Being the listener in a relationship conference means saying nothing while your partner talks. You can decide on the timeframe, but make it somewhere between 15 and 45 minutes. You can take notes. Take a break for 24 to 48 hours and allow thoughts and feelings to arise to reflect on what you heard. Share those with your partner by reversing roles – it’s their turn to simply listen and reflect for whatever timeframe you decide – 24 to 48 hours. Summarize how you both felt about the Conference. Then celebrate your ability to tackle tough stuff.

Idea 3: Take Turns Active Listening

Another option is to take turns all in one setting being the active listener. This means being fully present to your partner’s issues and emotions without bringing up your own responses or emotions. (Tip: This is really hard for most people who have never done it before.) You do this by repeating back what you heard, checking with them to make sure you got it all (“Did I get it all?”), and asking to hear more about the emotions underlying each statement (“You said you felt excluded. Tell me more about that.”) Once your partner agrees they feel completely heard and understood, then it’s your turn. Remember to celebrate and give yourselves credit for your progress with active listening.

Idea 4: Ask For Practice Help

Are there some money issues in your relationship that sound too difficult to talk about on your own? Sometimes each of these exercises work best if practiced with a counselor first. And that’s ok; sometimes we need training wheels before we’re ready to ride the conversation bicycle on our own. Give yourselves the gift of an enhanced relationship by getting some tips on how to have a healthy conversation about money.

Remember when you learned to ride and then let go of the handlebars? Imagine feeling that free in your relationship with money and each other. One’s Scrooge to the other’s spending might actually be something you learn to laugh about for years to come. You know you’ve arrived when you find yourselves saying, “Honey, ain’t money funny?”

For more tips on the psychology of money, subscribe to our award-winning monthly e-letter, “The View From the Porch,” at https://bit.ly/3t2uwfn.

For an online course on couples and retirement readiness, see the Simple Finance page at: https://my-simple-finance.thinkific.com/courses/retirement-readiness-signature

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