Friday, October 10, 2014

Worried about someone stealing about your money? Maybe that "someone" is you.

How much time do you spend worried about identity theft? How many times has it actually happened to you?

Of course being a victim of financial fraud is a serious issue, and it's prudent to take steps to carefully manage your private information.

But at the same time, we only have a finite amount of energy and attention that we can pay to all the various things in our lives. We need to budget our focus just as carefully as we (hopefully) budget our money.

Ron Lieber has this to say in his Your Money column in the New York Times:
But this is also a good time to remind ourselves that we often worry too much about the wrong things. The biggest threat to our financial lives is probably not that thieves will get their hands on our payment card information. Instead, we should concern ourselves with the way we quietly chip away at our own net worth by using credit cards too much in the first place.
The biggest potential threat with credit cards isn't some foreign hacker stealing your account numbers. It's the myriad of ways that using plastic feels different than spending cash, causing us to blur our own financial boundaries, overspend, and trade our actual money for the often-ephemeral "perks" of miles, points, and rewards.

In other words, yes, it's awful when someone steals your money and spends it (though most consumer credit cards offer significant protection against losses of this sort). The source of loss you should be most worried about is yourself.

Read more of The Slippery Plastic Slope.

Thursday, August 21, 2014

How can I get my elderly father to admit he needs financial help?

I hope you can help me find a way to talk to my father about his financial situation. Last month his electricity was turned off and my sisters and I helped pay a past-due balance of several months. He says it was just carelessness and he didn't notice the bill was overdue, but my dad is very on top of things and I think he was just covering up for not having the money. Over the last couple years I've noticed a number of little things, like having less food in the house, that make me worry that he's financially stressed. I love my dad so much, and I can't stand the idea of him struggling alone with this. How can I get him to open up to me?

Read more in this week's Financial Therapy column at for five ways to open up a conversation with elderly parents and establish a collaborative framework for their care. 

Wednesday, June 18, 2014

Should you share your income in your online dating profile?

"Six figures is so hot."
I will admit, when Penny Wrenn contacted me about this article for LearnVest the subject came as a total shock. I got married ten-plus years ago just as online dating was really taking off, so that world has largely passed me by. None of my clients have mentioned this aspect of profile management, so I didn't know that listing your income was even a thing. I don't show up much in this article because I was mostly agog at the questions Penny asked, baffled and concerned that this is what finding a match has come to. 

Having one piece of data is not the same as having information. 
Knowing someone's income doesn't tell you as much as you think about his or her actual financial life. Along with income are we going to list whether or not she has student loans? Whether he pays child support? Whether she has nine roommates or he lives with his parents? Who here might have a gambling problem? Raise your hand!

There is a time and place for communicating the financial aspects of our lives, and my feeling is that it should happen when we're able to give it the proper context. Someone reading your stated income is going to make assumptions about you that may be wildly inaccurate. 

Money is not always attractive.
The fact that this seems to mainly favor people who list a high income is also troubling. The survey Penny cites says that men and women who disclose incomes above $150,000 are most likely to be contacted. People who are high earners are not necessarily doing the most interesting work, or very interesting or happy themselves. I know a ton of unhappy lawyers and bankers who should not be foisted on the dating populace. (Case in point: many of them are unhappy with their jobs but feel unable to change professions because they're shackled by the student loans they took out to join said profession.)

I was happy to participate in this piece, but I'm even happier to read the research and other points of view it contains. I learned a lot. I'm struck by the sense that online profile management, the careful curation of those personal details we feel make us look best, is like a modern form of burlesque. Sure, you want to advertise enough to get people in the seats, but let's save something for the show, people. 

Sunday, February 16, 2014

Parents: let's put on a (personal finance) show!

Let's talk about my
pin money for the week.
Once upon a time, managing money was something we could see. Mom or Dad would sit at a table surrounded by paper statements and bills, writing checks and balancing the register. Cash was received at a bank branch, maybe even from a teller. 

Many important associations with money were formed by witnessing these activities. We might notice a parent who got very stressed when the checkbook came out, or discussions about expenses that quickly descended into argument. Or we may have seen money management as a normal and neutral (maybe even positive!) aspect of the family's operations. 

Money management activities today can be a bit more mysterious, if not completely invisible to children. We may check balances on our phones (indistinguishable from the other million times a day our kids see us looking at our phones), or pay bills online during a few minutes at lunch (if we directly pay bills at all). We get cash from points of sale or ATMs that we hit during our rush to get somewhere else. 

This can leave kids with a skewed understanding of what it takes to direct and manage finances. Money seems to just happen automatically, without much attention. Often there are systems or institutions who capitalize on this inattention, protecting us from accidental oversight or promising to monitor our accounts and alert us if there's anything we need to know. 

So as parents, one of the most important parts of financially educating our kids involves finding ways to bring money management to life so that it doesn't just happen behind the scenes. 

It might take real effort to make money management more visible in your family. It's easier to use the conveniences of automation and mobile access. This is especially true if money is a stressful trigger. We look for ways to minimize our exposure to things that cause distress.

In a sense, when we make money management visible we're putting on a show. We choose what and how we demonstrate to our children about money. 

Kids pick up on this performance on various levels, and that's why it's important to pay attention to scene, script, roles, and routine. 

Look at the pretty Excel spreadsheet.
What do our kids see when they look at us managing money? Are we shuttered off in a dark corner, muttering angrily to ourselves? Or are we integrated with family life, accessible for curious questions? I understand it can be hard to review an account statement while sticky fingers reach for your keyboard. I used to pay bills after the kids were asleep for this very reason. But you'd be surprised how many young adults come to my practice who've never learned that it's normal to review expenses, plan for cash flow, or read through account statements. 

What language do we use with money, and how do we dialogue with others? When it comes to money, words matter. I recently changed how I talk about my usual Saturday practice, saying "Mommy's managing our money,' instead of "Mommy's paying bills." I want them to frame what they see as something positive and self-directed, as opposed to reactive and compulsory. Language and tone are especially important when choosing how to communicate with loved ones. Watch out for panicked or accusatory tones when asking your spouse to explain that recent charge at the Apple Store. 

Who takes which responsibilities when it comes to managing the family's money? In two-parent households, does one person do it all, while the other declares him- or herself "hopelessly terrible" with numbers? Ideally children should see a flexible back-and-forth, where both parents treat each other as competent and equally responsible. It's okay to have different jobs, but no grown up should be exempt from money matters. 

Let's work together to fund
our vacation account!
There should be a predictable choreography to our financial management process. Mail gets opened every day, bills are paid weekly, accounts reviewed and reconciled each month, investments quarterly. Children need to see that money exists within a framework of time, and that inattention to time brings a swift consequence of disorder. It shouldn't be, "Crap! Didn't I just pay that?" or "I think I'll jump on today." Without choreography, the actors crash into each other and the audience can tell the scene is a mess. 

If all of this makes you feel a little stilted and self-conscious, don't worry. As with real theater, the more you rehearse the more comfortable you'll feel. And you couldn't be in front of a more receptive audience. 

Monday, November 25, 2013

I hate to be the Feminist Grinch here...

Badass Girls - what's not to love?
I appreciate a good commercial. I do. As a former marketer I admire how GoldieBlox has so successfully tapped into the desire for parents of girls (and, I think for grown women) to see toy manufacturers create products other than dolls or princess crap. 

But before everyone runs away with efforts to get the Girls commercial aired during the Superbowl, I wonder how many people have actually tried the GoldieBlox products? Because it pains me to tell you that we have -- and guys: neither my six-year-old nor I thought they were that great. It was cranks, spools, and some things that spin, all tied together with a somewhat confusing narrative that wasn't terribly compelling. Nor was the building process that engaging. My daughter gave it a half hour a couple times, then she was done.

World of meh.
We should be careful (or at least aware) of when our frustrations and aspirations are being co-opted for the aim of selling a product. Not that I'm saying GoldieBlox has some evil agenda. But they are not in the business of creating girl-power content. They are in the business of selling toys. Girl-power content is just a means to that end.

It's like the great capitalist trifecta when the product, message, and need all sync up to something socially positive. But in this case I feel like the need and message are galloping off into the sunset, while the product sort of limps along behind. 

Rainbow Loom genius at work!
When it comes to providing play opportunities that engage my daughter's interest and help spur her cognitive development, I'll be putting my family's dollars into Rainbow Loom and Legos, and turning down the volume on today's catchy viral commercial. 

Saturday, November 23, 2013

So exactly what is "Financial Therapy?"

I work in a very niche field. Ten years ago, after addressing and working though my own troubled relationship with money, I decided I wanted to help others in similar situations. At the time I thought I was the first person who ever made the connection between how attitudes and beliefs impacted financial behavior, and it took me a long time to define my professional path. Early exploration led to social work and getting my MSW, and thereafter I had the good luck to land an amazing partner/employer in The Actors Fund where I was tasked with launching what became our Financial Wellness Program. 

It gives me a great feeling of satisfaction and pride to see how far things have come since those early days. The culture has changed, and I feel like there is an openness and complexity to our post-2008 understanding of money. Wonderful resources like LearnVest and DailyWorth successfully integrate the "softer" elements of financial behavior along with practical advice. 

LearnVest even did a full feature on the field of financial therapy, and I was honored to be interviewed for the piece. This was part of their "10 Questions for..." series. 

So without further ado, "10 Questions for a Financial Therapist!" 

The $19,000 Haircut

When people assume that my passion for financial wellness is the result of a lifetime of good money habits, I tell them the story of The $19,000 Haircut.

I come from a family with solid financial values: work hard, spend less than you earn, save scrupulously and invest wisely. Yet somehow I couldn’t quite reconcile this excellent advice with the very different message I got from credit card companies strategically stationed inside my university bookstore, or with the dilemma of moving to New York City right out of college (read: no savings) and living on an entry-entry-level Marketing salary. Still, debt that began innocently enough spiraled over time into a “what’s $50 more on the Visa?” attitude, accompanied by anxious night sweats about when a deposit would clear, and using convenience checks from one credit card to pay the minimum on the others. A few years into this cycle I was getting farther away from the entry-entry-level pay excuse, yet no matter how much money I made it was never enough to right my course. My money (lack of it) and debt (too much of it) made me feel like I was living a lie, and that anything else I achieved in life meant little in the face of such monumental secret failure.

Enter my dear mother, who came to visit me one spring at my apartment in New York. I asked her to give my hair a trim, something she hadn’t done since I was a child. Perhaps it was my new metropolitan tastes or her lack of recent experience in hair styling, but I ended up with what can only be described as a lopsided mullet. I took one look in the mirror and burst into tears.

My haircut wasn't even this good. And 
ScarJo: this is not good. 
“Don’t cry!” She pleaded, horrified at my reaction. “We’ll call your hairdresser and tell her it’s an emergency. I’m sure she’ll see you right away!”

“I can’t!” I wailed. “I can’t go back there. I bounced a check” —this scenario occurred in 1999, a time when there was such a thing as paying by check instead of the ubiquitous debit card— “I bounced a check there four months ago and I can’t go back.”

My mother was dumbfounded. Bounced a check? Her daughter, who had received the best lessons in financial responsibility that the Midwest could offer? It was true. What’s more, as it became clear over the course of the next three hours, I was late on several bills and had amassed more than $19,000 in credit card debt.

Shockingly, she didn’t pour down any of the blame or censure that I had feared would come if I disclosed the truth. She simply asked, “Don’t you have a budget?”

“A budget?” (Not that I was unclear as to what a budget was, you understand. It was just that I didn’t know how a budget was relevant to me, in all of the unique snowflake-ness of my individual challenges and circumstances.)

“A budget,” she continued. “You make a decent income. How can you not have a plan for where your money goes?”

A-ha, that was the crux of it. I had no budget because I had no plan. No plan for my money, no plan for my career. I reveled in throwing myself at the world with just my talent and my ambition and treating the whole experience like one amazing adventure. Planning? Bleah. I wanted to be fearless and live a big life. I didn’t want to live on a budget.

MacGuyver says, "OMG, girl, your hair is
terrible. You need to get your life together."
And yet... did I want to live a life so financially compromised that I couldn’t undo a lopsided mullet? Was that the life of intrepid adventurer, or was that a deluded young woman with bad hair?

I wiped away my tears and decided to come totally clean. I pulled out the tattered bag in which I kept a stack of old mail. I held back no secrets. I didn’t pretend that I had this under control in any way, shape, or form. My mom dove right in.

“There!” she said, after 30 minutes of rapid-fire questioning and sorting through my bills. She held up a lined notepad that didn’t have more than ten items on it. “Here is your monthly budget.”

This was a monthly budget? It didn’t even take up half of a page: rent; cell phone; cable; electric; credit cards one, two, three, and four (organized by highest to lowest interest rates); and a weekly allotment of cash to use for everything else. The follow-up instruction: when you run out of money, stop spending. I took a deep breath and accepted the notepad.

Oscar Wilde once wrote that “the only thing that can console one for being poor is extravagance.” This had definitely been true for me. I had resisted being on a budget because I was afraid that it would deprive me of freedom, and when gripped by that fear I would try to soothe myself by (paradoxically) going out and spending more money. But in the first weeks and months of following my spending plan, instead of feeling restricted I was shocked to discover that I felt liberated. If I chose carefully, I had enough money in my weekly cash allotment to meet my obligations and even allow a little breathing room after the basics were covered. Being able to take care of my needs safely, without worrying that checks would bounce or that I would regret the purchase later, was a kind of emotional freedom I’d never before experienced. Also, I felt much more attached to the items I did decide were worth parting with money for. Instead of associating purchases with failure and fear, I associated them with confidence and value.

Once I made the “my money choices = me” connection, I felt a flood of meaning in my financial life. It was like I could see clearly for the first time. I went from utterly unconscious to fascinated with everything about the financial process. Thus when I looked at my debt, what I saw was a $19,000 reflection of all of those years of pain, frustration, and shame. Talk about motivating! I wanted that debt gone.

That same spirit of attacking life made me attack my debt and just want to pummel it into the ground. Every freelance job, tax refund, or gift from Grandma went toward my debt. And what’s more, I paid it joyfully. It took me just over a year to pay off the entire amount, and I remember that year as one of the happiest periods in my life. I hosted “clothing swap parties” with friends instead of going shopping (frankly, my friends were thrilled I’d 'fessed up about my money problems because they were all secretly in debt, too). I planned my life better, cutting back on taxis and convenience food, which made me feel calmer since I wasn’t so harried all the time. I learned to cook and lost weight. I even negotiated—successfully—with a retailer or two in order to make a purchase fit within my spending allotment. What was “another $50 of debt” and the resulting dread and shame when compared to the actual freedom that came from financial security and working toward my goals?

The gift of this period was that I learned how to pay attention to money. The debt was the painful wake-up call that I tried to ignore until it was impossible. The budget was the framework for engaging with my own decision-making process and discovering my own values. And the money itself? Money became a language that I learned to speak.

Now I want to be clear that my experience with The $19,000 Haircut and paying off my debt is just that: my experience. After working as a financial therapist and coach for the last decade, I understand that there are several parts of my situation that were extremely lucky. I had a good, steady job and could take on extra freelance work. I received encouragement and support from my family. And just as importantly, this all happened in 1999-2000, the years when credit card companies were tripping over themselves to offer huge credit lines with 0% 12-month introductory rates and no balance transfer fees. It was cheaper for me to get out of debt then than at another time in history.

But the greatest lesson of The $19,000 Haircut was not about financial tactics. The gift of The $19,000 Haircut was the discovery that money can take us on a journey where we learn to do something different (financially) and it makes our lives better (non-financially).

The $19,000 Haircut put me on path whereby I became financially sane, personally empowered, and I found my life’s passion. That’s my story.