“Money anxiety disorder” is a term used by psychologists to describe a condition of constant worry and unease about money. The term seems to have come into use around 2008 to 2009, when the economy was unraveling and most people were concerned about their financial well-being. Additionally, research has shown that women seem to suffer from money anxiety more than men. Here we look at what it is, how to recognize it and how the financial planning process might help.
Do you know how much a half gallon of orange juice costs? Think carefully. What was once a 64-ounce container of juice is now 59 ounces. A pint of Hagen Daz is just 14 ounces (Ben & Jerry’s still has a 16 ounce “pint.”) How do you compare? Take another example, hotel rooms. I found a great place to stay in Sonoma for under $200 a night in February. This summer there was nothing under $300 at the same place. I recently purchased artwork for my office. I had no idea how much to offer, except that it had to be lower than the asking price! Plane flights, cars…ditto. Clearly, some prices do vary based on seasonal factors. Yet, is there such a thing as the “real” or best price for anything?
...When an old acquaintance saw the name of my business, Stoffer Wealth Advisors, he said, “As soon as I have some wealth to manage I’ll give you a call.” Clearly he was thinking of wealth only in its most narrow definition: an abundance of material possessions or money.
When we believe more is the answer, it can impact us in unforeseen ways. Humans just want more. We want more happiness…more money, more success, more time, more vacations, more life. Aspiration does seem to be a healthy thing. As humans, we seem to value growth and progress. However, money represents many different things to different people. When it comes to money, needing more, wanting more and having more can be complicated. The danger in the pursuit of money is that you risk falling into a rabbit hole - where you find yourself navigating a seemingly endless confusion of paths and choices, and where it is so easy to lose your way.
In the new movie “All the Money in the World”, Mark Wahlberg’s character, Fletcher Chase, asks J. Paul Getty how much it would take to make him feel secure. The answer…“More!” It was an odd statement from ostensibly one of the richest men in the world at that time. Based on a true story, Getty’s grandson has been kidnapped (one he’s particularly fond of) and the ransom demand is $17 million. Getty won’t or can’t bring himself to part with the money even though we’re certain that he has it.
Recently when the subject of financial planning came up, a woman said to me, “I really should do that.” I was staring at my computer one afternoon, thinking about the pervasive effect of the phrase “I should . . .” on our daily lives. It almost doesn’t matter what follows those words, “I should . . .” – lose weight, do my taxes, get the car fixed – whatever it is, the phrase which masquerades as motivation so often has the opposite effect – of inducing procrastination. It can make us feel as though someone else is trying to impose his or her will on us.
People tend to embrace this statement. It sounds true: surely only shallow, materialistic people would insist that money could buy happiness. To utter the thought aloud is almost like a declaration that we aren’t materialistic (and hopefully not shallow!) Scientists have long been perplexed about how to measure such a thing as happiness. Studies that examine relationships between money and happiness raise the idea that although money may not directly bring us happiness, it has the potential to. Believing that money can’t buy happiness is a bold and sweeping generalization that weakens under scrutiny. The authors of the book, Your Money or Your Life present a “fulfillment curve.” As the curve in the diagram shows, money spent to meet basic needs brings the most precipitous rise in satisfaction.
A while back Michael Finke, Professor of Retirement Planning at Texas Tech University hosted a webinar about financial planning in the context of longevity and aging. None of us likes to think about the deterioration of our physical and mental abilities. Yet how we navigate these changes, and equally importantly, how we plan for them, will have significant effects on our future happiness. Life expectancy has increased for a number of decades and the trend continues. Finke concludes that definite connections exist between income, health, social activity and longevity and happiness. Generally, those people with higher income tend to enjoy better health and are more socially engaged. These factors contribute to greater longevity and increased satisfaction in retirement. The webinar raised a number of interesting questions in regard to retirement. I’d like to discuss the following two issues: first, whether to remain in your home as you age, and second, how declining cognitive abilities affect the management of your finances.
We use money every day. We spend on things, experiences, etc. Maybe you are planning the next big adventure in your life…or figuring out how to save the money to remodel the bathroom. Behind these activities there is a presumption that money used in these ways will make us happy. Do money and happiness even belong together in the same sentence? In some of my workshops participants fill out a survey asking them to agree or disagree with statements on money beliefs. One of the statements is “money makes me happy.” I never kept a specific tally but I always looked at whether they checked yes or no on that question. My recollection is a fairly even split between those who agreed with the statement and those who didn’t. I wonder if some checked “no” because we’re not supposed to find happiness in such a thing as money
In the past several articles, we’ve looked at the variable nature of prices. What does a gallon of milk or a hotel room cost? How much does it cost to retire? What types of financial management services are there, how much do they cost, and which one might work best for you? In that vein, why pay someone to manage your money? I recently told the story of a client who experienced immense relief upon delegating the management of her finances. Making all the decisions on her own had left her plagued with fear and anxiety. My listener exclaimed, “But my father said never to pay fees!” Such advice might be good for one person, but not so good for another. While I agreed that one should pay as little in fees as possible, my listener’s objection raised the question: What are some of the reasons to have your money managed professionally?
In a workshop I gave some time ago, a woman named Lisa related the following story. She had been sent to the store with money to buy milk for dinner. As she was leaving the store, she spotted a cute little stuffed bear. She had change in her pocket and thought, “I can buy this!” All the way home she was excited as she anticipated showing her mom what she had bought. But when she got home, her mom screamed at her, ordering her to return the bear and bring back the change! The little girl was traumatized...
Back in 2008 a woman in her mid 50’s came to my office for an initial meeting to discuss her personal finances. She had rescheduled at least three times. About half way into our meeting I asked her, “So, how was it for you gathering your information to come see me?” Her response displayed such vulnerability and courage I’ll always remember it. She said, “I’m am so embarrassed! I’m so disorganized! I’m at a point in my life where I feel like I should be more together. I’m ashamed that I don’t have more saved.” Whether you earn a little or a lot of money you can find yourself having similar feelings.