Where do you start teaching your kids about money? How do you tell a kindergartener that money is a finite resource without making them worry? How do you pass on the value of the dollar and the importance of saving without raising them to be materialistic or cheap? They key is starting the conversation early, keeping it age appropriate and ongoing, and showing your kids how you use your values to shape your spending. Here’s an age-by-age guide:
We are told many contradictory things about money that result in complicating our thoughts, feelings and behaviors. Here is an entertaining article that gathers NYT readers’ ideas on managing money and keeping families together – https://www.nytimes.com/2019/06/26/smarter-living/best-tips-manage-family-money-household-finances.html
Here is a wonderful TEDx talk (20 minutes) where Julie Gottman gives an overview of Gottman Method Couples therapy and how it applies to dealing with perpetual and resolvable conflicts in the home. My clients will recognize the Gottman-Rapoport exercise based on principles of diplomacy and the Art of Compromise circles (or bagels, as Julie calls them) for successful negotiation and resolution. Julie reminds us how to state our feelings (without cheating) and that there is no such thing as too needy – https://youtu.be/FrSt7o_gE3Q
Financial therapy clients experiment with different apps to help them take charge of their finances. YNAB works for many because it allows clients to plan ahead, embrace their true expenses and put each dollar to work. Here is an article that describes one person’s experience with YNAB –
The sad situation described in this article is that a nationwide online study of 25,000 American adults found that while “just over two-fifths of respondents (41%) report spending less than their income, 36% spend about EQUAL to their income, and 19% spend MORE than their income.”
Only 35% are “certain they could come up with the full $2,000” if an unexpected need for $2,000 came up within the next month. Similarly, 40% claimed to have set aside 3 months or more in an emergency fund.
What happens when you consistently live paycheck-to-paycheck?
- You go into serious debt if income stops coming in, and then you pay high interest on that debt
- You are always stressed out about financial risk and hardship
- You aren’t able to build sufficient emergency savings
- You will never save anything for retirement and will be working until death
- You will never achieve financial independence
- You will not be able to save up for an occasional vacation, home improvement, education, etc.
- You really can’t work towards ANY future goals that are reliant on saved assets
Financial infidelity is when one partner is making financial decisions or moves without the knowlege of the other partner, endangering the financial future of the couple and undermining trust and commitment, the load-bearing walls of the Sound Relationship House (the core concept in Gottman Method Couples Therapy). This article lists 10 potential signs of financial infidelity and lists steps to take to overcome it and reset the nature of the relationship - https://www.thesimpledollar.com/ten-red-flags-of-financial-infidelity-and-what-to-do-about-it/
Some Financial therapy clients ask for help to figure out how much they need to save for retirement. The first step is to calculate your annual expenses (noting essential-living, essential-debt, and discretionary). The next step is to use one of the retirement calculators with a Monte Carlo simulation. Here is a helpful article describing these –
Gen X women (born between 1965 and 1984) are really struggling with issues in their personal lives and relationships, dealing with their finances, and managing their careers. “They’re smart. They’re grateful for what they have. They’re also exhausted. Some of them are terrified. A few of them are wondering what the point is.”
Procrastination is about emotional regulation and not laziness. It's a way to cope with difficult emotions and negative moods around certain tasks. We can't tell ourselves to just stop procrastinating, we have to rewire our brain to find healthier ways to manage the uncomfortable feelings of boredom, anxiety, insecurity, frustration, resentment, self-doubt and beyond. Counseling and Brainspotting Therapy can help people develop awareness and process challenging feelings.
Student debt is the wedge of your salary that disappears each month. The weight of student loans is different from the weight of mortgage or credit card debt because student loan borrowers cannot declare bankruptcy. Student loans are sometimes perceived as a mark of failure — failure of character, perseverance, or planning — further compounded if and when a payment is missed. For many, student debt means delaying or forgoing homeownership, marriage, and parenthood.
Financial therapy and career counseling can help people reevaluate their current situation and provide an opportunity to get a handle on their money and their life in new ways.