Tuesday, April 24, 2012

Huh? (Seth Godin edition)

I've now read this very short post four times and still find myself scratching my head.
When people have their basic needs met, it's not uncommon for wants to magically become needs. It's our hardwired instinct to seek to fill unmet needs.

That pays off for any marketer that has persuaded his market that they need what he sells. It backfires when those 'needs' are seen for what they actually are--luxuries.

When you sell a want, you have to work harder, you must seduce the market, because wants are fickle, picky and not easily bullied.
So is Seth (we're on a first name basis) saying that in this case wants have the same perceived urgency as needs, or is he saying that they are in fact more superficial and thus hard for marketers to engage? It seems like if a consumer experiences a want as a need, he or she would be pretty receptive to a marketer peddling a solution for that "need."

Thursday, April 19, 2012

I Ain't Sayin' She's a Golddigger

Hey, fellas, have you been feeling left out of my recent glossy mag advice-a-thon? Read this article from the May issue of Men's Health where I suggest ways to handle such sticky conversations as your parents' inheritance plan, who pays for dates, and different levels of ambition between spouses.

Wednesday, April 18, 2012

Couples Counseling: You and Your Money

Sometimes in my financial counseling practice I feel like a couple's counselor, rehabilitating the relationship between people and their money. (This is, of course, notwithstanding the many actual couples that I treat around money issues. That's a whole other can of worms.)

Sessions can go something like this:

Client: "Make my money stop disappointing me!"

Money: "Make her pay attention to me!"

Client: "Every time I try to spend time with my money, it's never enough. My money is all complicated and needy and it doesn't give back to me. It doesn't take care of my needs. It's all, 'Hey, why don't you keep better records? Didn't you notice that this bill was late and you got slapped with a fee?' I work all day long, and when I get home I just want my money to be waiting for me with orderly accounts and a fat balance! Is that too much to ask?"

Money: "You are acting like a crazy person. No, I cannot organize myself. I can't do anything you don't instruct me to do. I am an inanimate object. Quit projecting your relationship with your mother all over me and just hang out with me once a week! I'm not trying to stress you out. I'm just trying to get your attention because there are things that need to get done!"

What I basically do is what any couples counselor would do: try to bring down the emotional intensity and facilitate communication such that both parties can actually hear each other (okay, really it's only one party that needs to do the hearing).

What clients need to "hear" is their own anxiety. Anxiety has a vital function, and that is to bring our attention to something that needs to be addressed. It's designed to be uncomfortable so that we're motivated to remove its cause.

When we yearn for money to take care of us with no responsibility or action on our part, we're enacting an infantile fantasy. In essence, we put money in the role of a parent whose job is to provide unconditional care and support. For many people who struggle with this financial issue the root cause is a parent who did not do that job sufficiently.

The financial counseling process can help clarify and resolve where money gets tangled up with personal struggles such as this. The "dialogue" above seems silly from the perspective of adulthood, and sometimes just pointing out the dynamic can be enough to help people recognize the impossible expectations they have for their financial life, and to begin to build a solid and mature relationship with money.

Wednesday, April 4, 2012

Amanda's Metaphors of the Week

Metaphors are a great way to help people gain new understanding by drawing a parallel with something already familiar. I love metaphors and use them all the time in my coaching work. I'm usually coming up with them in the moment, so sometimes I go a little off the beaten path. Here are some metaphors I've thrown out just this week. Note: it's only Wednesday.

Developing a new financial management practice is like sculpting a figure from stone. You don't jump right in and chisel out the finer details of the face. First you grab a hammer and just whack that stone to try to get a rough shape. After that you refine. But first you're just taking whacks with a hammer. It's not supposed to be perfect.

Money is a neutral energy source. How we direct it reflects our own inner meaning.

A money crisis can bring attention to financial behavior that's been limiting you for years. It's like that compressed disk in your back. Your range of motion has been curtailed for so long you don't even remember what it's like to move freely. This process is like going to the chiropractor. We're going to adjust some things so the behavior will unlock and release.

Our biases and distortions around money are uniquely personal, sort of like your own individual glasses prescription. You may be a +2, the person next to you a +1.25. But this is the distortion each of you brings to how you perceive a financial situation, and with awareness you can learn to correct for it just like you can get corrective lenses.

You say that you have two options right now: to sink or swim. I suggest we add a third: to float. Let's just take moment to pause and gather information before we decide what needs to be done about it. We're just going to float here on the surface, noticing all the parts of the landscape, and take it all in before we feel we have to do anything.

Sunday, April 1, 2012

The Savings Burden

I'm a behavioral economics junkie. I can lose a day reading Kahneman, Ariely, or Benartzi. Helping people overcome cognitive biases and behavioral defaults in order to take care of themselves financially is my life's work.

But sometimes I feel like we forget about the external forces that also support or impede financial goals. The conversation tends to take a decidedly "red state" (personal action and responsibility) or "blue state" (political/macro-economic framework) focus, and we lose the interplay of person-in-environment, which is the "unit" we are taught to examine in graduate social work programs.

I do some work with a non-profit that is in the process of freezing their pension program. To compensate, they are offering employees a 401(k) match up to 6%. In many companies and industries this would hardly cause a ripple, but for people who are already trying to live on a social worker's salary in one of the most expensive cities in the world, this is a huge challenge.

We can employ as million "opt-out instead of opt-in" tricks to get people to contribute more to their 401(k)s, but let's not overlook the great number of people who struggle to save not because of loss aversion, but because they have barely enough money to cover their essentials.