This week I’ve been reading Thinking Fast and Slow by psychologist Daniel Kahneman. The author received the Nobel Memorial Prize in Economics for his work on cognitive biases in decision-making. Where finances are concerned, we all like to think we make rational decisions, based upon well-considered reasoning. The studies examined in this book suggest otherwise. What is really behind our financial decisions? Here’s a personal example – my “lettuce story.” I am standing in front of the produce section at the grocery store, eyeing a beautiful head of organic romaine. But I’m frozen.
We’ve all heard the saying, “Out of sight, out of mind.” I am reminded of a woman who came to see me a few years ago for help with financial planning. She had rescheduled the initial meeting several times. When she finally came in, I could tell that she was upset. After she had talked for awhile I asked her, “How was this process for you, gathering your information for our meeting?” She admitted that she felt embarrassed about being disorganized and not having saved as much as she “should” have at her age.
A couple, I’ll call them Tom and Sally, get together for a second date, wine, and appetizers. They had gone out for coffee a few days earlier and shared an immediate sense of having met someone special. Sally had mentioned she’d be traveling for work; they would not be able to see one another again for more than a week. Tom decided to find out if his initial feelings about Sally were true. So he asked her out three days later. Glad that he’d taken the initiative, she happily accepted. Now, on that second date, they are savoring each other’s company when the check arrives. Neither one makes a move. There is an unspoken moment of uncertainty. What to do?
A silly question – maybe? OK, Halloween is over, but I got a bit of a fright when I reviewed a recent survey done by Harris Poll stating: “Nearly three quarters (71 percent) of Americans say some aspect of talking to a financial advisor scares them . . . ” That’s a huge number. What’s going on here?
People these days seem to spend considerable time and money taking care of their health, paying particular attention to choices about diet, organic food, exercise, different kinds of alternative medical care, and spiritual self-care. But what about the notion of financial self-care? Recently, I facilitated a discussion with a group of women on the topic of financial self-care and some interesting points came out of the discussion. Generally, people seemed to have a good idea of what they need to do to take care of themselves financially, and the statements about the feelings resulting from successful financial self-care were powerful. Consider these comments: “I feel better about myself,” “I feel empowered to make choices,”
It has been 14 years, and yet I feel my emotional scar, healed, yet still tender to the touch. Tears still well up. Unfortunately 9/11 was just the first in a series of events that led to my life-changing discovery about money. This is what 9/11 taught me. I was in Manhattan that week for the Merrill Lynch Financial Services Conference (an ironic coincidence…maybe.) It was held at the Pierre Hotel where we listened to bank management talk about their strategies for gaining a “greater share of consumers’ wallets.” I walked out of a morning session to see footage of the second plane hitting the tower.
A few weeks ago, I had coffee with a woman who said, “I really love money! I just wish I didn’t feel bad about saying it.” Yeah, I love money too! I identified with her feelings, especially remembering my college years when the prevailing cultural message was that greed and money are bad, suggesting that being poor is somehow noble. It prompted me to think about why loving money feels like an important step toward bringing more of it into your life.
Lately the media has been frothing over the rocky financial situation in Greece. Banks and stock markets closing, on top of high unemployment and chronic recession – surely these dire circumstances must have important repercussions for investors here, right? How concerned should we be and what should we do?
Lately I have been reflecting on the importance of values as a compass for our lives. Now that the boys have moved out I can’t help but wonder if they will eventually live the values that we worked so hard to instill as parents.
For those of us who have gone through a divorce, the signs become clear, though too often in hindsight. Maybe you avoided important conversations, stopped coordinating schedules and planning regular date nights, or tried therapy and still were not able to reestablish your connection. Whatever it was, at some point it becomes clear that the writing was on the wall. Once that point is reached, you feel like your world is falling apart. You may feel totally unprepared for how to deal with the process that now ensues — emotionally, financially, and legally.
Who is better with money, men or women? At first blush it may appear to be a ridiculous question but when I meet new clients I always ask about their experience with money growing up. How we were raised, the availability of money and attitudes toward it shape our beliefs beginning at a very young age. Some may bristle at the thought of comparing the sexes but our past is key to understanding our behavior today. There are some gender differences – both innate and cultural...
A woman approached me recently after a talk I had given on the psychology of money, and asked the following question: “If I know I’m engaging in retail therapy and have it named, does this make it conscious spending?” At first, I gave her credit for recognizing that she was spending money to feel better. But as we talked, I began to sense that a degree of semantic acrobatics might be involved. Could it be that she was naming the behavior in order to give herself permission to indulge in spending money that she wouldn’t have otherwise?