Money Behavior - Introduction

Money Behaviors  What is money history o Money history is the part of the interior journey  Distinction between interior and exterior o Without understanding our past relationship with money, we cannot understand our current relationship with it  Financial counseling - collaborative effort between a counselor and client to understand the complex relationship between o Values, attitudes, emotions, beliefs, self-esteem o Spending, saving, borrowing, and investing  Reading review and discussion o Financial counseling as contrasted with financial planning is seen as a distinct approach to help clients change their financial behavior and resulting outcomes o Where might a good fit for a financial counselor be?  Workplace programs as an employer-provided benefit  Credit counseling organizations  Banks and credit unions  Faith and community based organizations  Healthcare-based programs  University-based and government programs  Building a trusting relationship o Finding money scripts  Unconscious beliefs people hold about money, often unexplored and only partially true  Most money scripts are formed in childhood, and are the basis for many financial behaviors o Most money scripts are simple incomplete or too rigid because they are contextually-bond o For example, consider a money script sometimes adopted by people who grow up in poverty o As long as someone has very little money, living by this script would make sense as a way of managing or even surviving o Even when the context changes in this way, we often rigidly adhere to our money scripts. We view they in a all-or-nothing, black-or-white fashion  They are “normal” to us, beliefs that are so true, we don't even think about them o Everyone's behavior around money makes perfect, logical sense when the underlying money script is revealed o Within the context of the thinking that underlies that particular behavior, based on earlier learning, the actions follow a local pattern o But the unconscious money scripts that lie under the conscious thoughts are going to match their behavior with perfect logic o Money scripts are automatic and involuntary and they are formed at a deep emotional level o Becoming conscious of those scripts is a continuous, layered process o Sometimes individuals are able to change their behavior simply by discovering a money script and modifying or “rescripting” it with new and more accurate and flexible information When the money script is formed as the result of a significant traumatic event, information alone may not be sufficient o For some people early experiences around money were exceptionally painful for even traumatic o Traumatic experiences typically come in two forms - things that happen to us or things that are not done us  A traumatic event is one that is deeply upsetting, typically occurs outside the realm of normal human experience, and its outside of normal human experience, and is outside of the person's ability to change o Research has shown us two sets of symptoms that indicate someone may be suffering from post-traumatic stress  One is hyper-arousal around the trauma - paying too much attention to the source of the trauma, feeling haunted by the trauma, overreacting or benign out of balance  The other is dissociation - turning completely away from, avoiding, or ignoring the source of the trauma o In other trauma around money, traumatic indications could appear as an obsession with making or saving money on on hand, or at the other extreme professing not to care about it at all More money will make things better o This is perhaps one of the most common money scripts for american. We set arbitrary “more money” target, believing those magical number will bring us peace, happiness, security, or whatever else we seek Money is Bad o As with all money scripts this one has many variations. They include such beliefs as these:  “The rich are shallow, greedy, insensitive, unhappy”  “The rich got that way by taking advantage of other”  “When money walks in the front door, love walks out the back door” I don't Deserve MOney o This money script is held by many people who have money which they did not earn or do not fully accept as their own o It also appears in people who believe they should not enjoy what money can give them, because others are not so fortunate I deserve to Spend Money o One aspect of financial balance is believing that we deserve to spend money on ourselves and those close to us There will never be enough money o Ebenezer scrooge o When we believe there will never be enough money, we set ourselves up to live a life of deprivation and to experience constant anxiety, insecurity, and fear There will always be enough money o This money script reflects an unconscious trust that the universe will always take care of us, regardless of our actions or inactions Money is Unimportant o This money script can arise from a interpretation of certain social or religious tenets or from the money script that wealth does not bring happiness, love, and belonging Money will give me meaning o         This money script may result from growing up in poverty and seeing money as a magic tool that can open doors to belonging or being treated with respect  It can also be tied to a belief that money is the primary measure of success It’s not nice or necessary to talk about money o This script is a very common one in our culture. We are inundated with books, magazines, radio shows, and television programs about earning and managing money o Yet talking about money and our relationship to it is one of our biggest taboos If you are good, the universe will supply all your needs o They believe that if they do all the right things for all the right reasons, then they wont have to worry about the future because the “good karma” will guarantee that good things will happen The four money script categories o Money avoidance o Money worship o Money status o Money vigilance Money avoidance o Money avoidance scripts are based on the brief that money is bad and anxietyprovoking and rich people are greedy Money Worship o Most worship scripts include beliefs such as  “Things would get better if I had more money>”  “More money will make you happier”  “Money would solve all my problems” Money Status o Money status scripts equate net worth with their self-worth. They include beliefs such as Money Vigilance o Money vigilance scrips represent a combination of vigilance and discretion around money. They include beliefs such as  “You should not tell others how much money you have or make” Money Scripts can be changed o It is possible to identify and to change or rescript ones money scripts o How difficult a particular script will be to change depends on how deeply the script was formed and how much painful emotion is associated with it Financial Counseling o Financial Knowledge - basic understanding of financial concepts and procedures as well as the use of this knowledge to solve financial problems o Financial Literacy - knowledge and understanding of financial concepts and risks, and skills, motivation, and confidence to apply such knowledge  Financial Knowledge + Financial understanding o         