Because I'm Worth It

I know a lot of superwomen. We pride ourselves on shouldering the challenges of career, family, charity, and friends with nary a hair out of place. Complaining about this is really a form of bragging. Secretly we don't want to change anything because being needed makes us feel secure.

Superwomen are notoriously awful at voicing needs, setting boundaries, and saying no. This may make us beloved (and thus relationally “safe”) but it puts us at serious disadvantage in other ways.

Amanda Steinberg at Daily Worth recently asked me to comment on the news that only 4% of venture capital is directed to companies with female chief executives. Is this because women entrepreneurs tend to prefer a different type of business than the kind favored by VC firms, or could the reason be more insidious?

Sure, there probably is a component of gender bias in the VC system, but my hunch is that the superwoman complex is also present. Women run small businesses in record numbers (where they will take on monumental work loads and start up costs, not to mention considerable debt) but competing for capital is another story.

Being financially powerful women, whether that means raising capital or saving for our own retirement, requires that we confront unconscious paradoxes that hold us back. Too many of us believe that we are only loveable (or attractive) when we are non-threatening givers, focused more on the needs of others than ourselves.

What kind of ROI can be expected from a belief system like that? Apparently not the kind that attracts VC money.
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"Who Spends $1,000 on a Necklace?"

“Not me.”

That was the answer given by a New York woman when she contemplated buying such a necklace while on a trip to Italy. Did she love the necklace? Absolutely. Did she have the money? She did – that wasn’t the problem. The obstacle was that she didn’t see herself as the kind of person who spent $1,000 on a piece of jewelry.

How we see ourselves has a profound effect on how we operate. Some social psychologists define the Self as a process having two parts, the “I” which represents our spontaneous, authentic desires and impulses, and the “Me,” which is how we inhabit and execute the social roles that give our lives meaning. We experience tension between the “Me” and the “I” all the time. For instance, I may feel like kicking up my feet with a glass of wine when I get home from work, but it’s important to me to be a good mother and thus off I go to supervise bath and bedtime routines. (The wine will have to wait until 9:00pm.)

“Me” and “I” tension is common in financial behavior. In the necklace example above the “I” wanted the necklace, and this caused great distress to the “Me.” The woman in the piece even described the event as “an existential crisis” – which it absolutely was. Who are we, if not our feelings, experiences, and actions? When these elements conflict we lose the feeling of having a cohesive self.

In my work with clients I always try to figure out which part seems to be dominant in creating the issue at hand. A tendency to spend too much may be due to an overwhelming impulse to buy coming from the “I,” or it may be because the person believes “someone like me” wears this kind of clothing or eats in this type of restaurant. Once the dominant process is identified I can engage with the client and help them work toward more balanced financial behavior that is also consistent with their sense of self. This makes the change sustainable and more likely to lead to long-term success.

The next time you find yourself having an existential crisis around money, try to tune into the language of your thoughts to see if it’s an “I-Me” conflict.

The perspective of the “I” is easy to identify, because the thoughts all start with the same subject: I want, I feel, I like, I hate, I dread, I fear… etc. The “Me” thoughts may vary a bit more, but they will sound somewhat like conventional wisdom: It’s important that, It’s reasonable to, One should, Someone like me does, Other people always… etc. (Watch out for “I believe” – it’s a tricky one. Starts with “I” but is really the “Me” in disguise.)

Balancing the “I” process and the “Me” process is a lifelong art and there is no easy formula. People who always go with the “I” live a life of chaos and people who live in the “Me” never get to be themselves. The best way to live a conscious, purposeful life is to take a moment to consider both sides and then remind yourself that this just one choice about a necklace, it’s not the sum total of who you are. You'll get the chance to make another choice tomorrow.

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Stressed About Money? Keep It to Yourself.

I feel a lot of sympathy for Therese Borchard. She wrote a piece in the Huffington Post today about How to Cope with Financial Panic and Recession Anxiety. Borchard is not a financial advisor or a mental health professional (as far as I can tell), but she has been treated for Depression and she keeps a blog on the topic. Today she ventured to share her personal strategies for managing intrusive, stressful thoughts about what would happen if she or her husband lost their jobs. She calls one of these strategies Imagine the Worst:
I remind myself that if both Eric and I can't find work, then we can sell our
house and buy a very small apartment in the suburbs. We can pluck our kids from
Catholic school, even as much as I would hate doing that, and move to a better
school district where they could go to public school free.

Imagine the Worst is a completely respectable strategy in terms of anxiety management. You take nebulous anxious thoughts and make them concrete in order to apply more rational analysis and problem solving. None of Borchard’s readers seem to have a problem with her recommended method. What they violently attack is the version of “the worst” that she’s imagining.

Tlgeiger62 commented:
What a ridiculous piece you've written. Paying for school uniforms? Swim
lessons? Are you insane?! How about paying for groceries? So if you're going to
write about "coping", you might want to consider the make up of your audience.
We're dealing with MORE than paying for swim lessons.

There are several other comments in this same vein, criticizing the author’s worst case plan to get a waitressing job (even experienced waitresses can’t get those) or sell her house (who is she to complain if she is so well-off that she owns instead of rents?).

At a time when many – if not most – Americans worry about how economic upheaval might impact them, it appears that we are supposed to keep the content of our worry to ourselves. Talk too specifically about your own losses and you risk being shamed by those who have it worse.

After the most basic level of survival is met, most indicators of financial well-being are entirely subjective. Social psychologists have discovered that an individual’s level of perceived poverty, his subjective assessment of income relative to what he identifies as “essential” expenses, is a stronger indicator of economic coping and adaptation than any measure of objective circumstances and events.

So in plain English, if you consider Catholic school for your kids to be an essential expense, the loss of it has the same potential “equivalence of suffering” as another person losing the thing that they feel defines their identity and security. We can all agree that not being able to buy food is a terrible thing, but does that mean that any material attachment above the level of basic survival is somehow crass and unsympathetic?

I say to my clients all the time: “Everyone in the world has either more or less money than you.” It’s easy to have compassion for those who have less. But until we can also have compassion for those who have more, I’m afraid we are all of us doomed to carry our individual financial burdens in isolation and shame.
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Listen In! Amanda to be featured on Voice America Radio

I will be featured on tomorrow's broadcast of The Kitchen Table Entrepreneur, a Voice America radio show hosted by Jackie Rogers.

The episode is titled "Mind Over Money" and I'll be on for the full hour. The Kitchen Table Entrepreneur features topics related to entrepreneurism, freelance employment, and business ownership. Most entrepreneurs are dreamers and risk-takers, and Jackie and I had a great time discussing the particular financial psychology of this group.
To listen to an archive of the broadcast, click here.
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Paying for "Protection"

Did you know that the average overdraft amount is $17 but that the average overdraft penalty fee is $34? Does that seem right to you?

At this very moment there are several pieces of important banking legislation being crafted in Congress. Two in particular, H.R. 627 (the Credit Cardholders Bill of Rights) and H.R. 1456 (The Consumer Overdraft Protection Fair Practices Act) are lightening rods for consumer anger and frustration.

Americans for Fairness in Lending is collecting stories from consumers about their experiences with overdraft "protection" programs to pass along to Congress and The Federal Reserve as part of the official comment period on H.R. 1456.

IMPORTANT: The comments you submit will be part of the federal public record made available to the public online and in paper form. Your name and address may be included as part of your comment. Don't include your account numbers in your comment, or any other information you don't want made public.
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How to be Successful in Conversations About Money

This Wednesday I will be taking part in a panel discussion titled "Yours, Mine, and Ours - Money and Relationships." The panel is presented by Barnard College's Young Alumnae Committee Office of Financial Fluency (don't you just love it?). I'll be presenting with my colleagues and friends, MP Dunleavey and Galia Gichon. Here's the text of the handout I'll be giving to attendees entitled "How to be Successful in Conversations about Money."

Start from a clear place.
It’s easier to communicate about money if you’ve already done your own homework, have your own goals, and have completed your own budget.

Be direct.
If you have a financial issue with another person, treat that issue (and the relationship) with respect by giving the subject your attention. Yes, it may feel uncomfortable to bring up a topic as sensitive as money. But it comes off as insincere to treat the subject casually, bring it up on your way out the door, or introduce it with, “Oh, by the way…”

Be concrete.
When trying to come to a consensus, make sure you’re both being concrete about goals, amounts, and time lines. This includes defining terms. For example, “You say it’s important to you that I be more responsible with money. What does it mean to be ‘responsible?’” “It means being able to pay for your lifestyle with cash. It means not having any credit card debt. [etc.]”

Just tell the truth.
You always have a right to your feelings and your point of view. Simply say, “I’m not comfortable with [spending $x on dinner right now].” Let the other person be responsible for how s/he chooses to respond.

Notice when it’s not about the money.

People use money in all kinds of interpersonal ways: to express love, to exert power and control, to punish, and to betray. Sometimes financial behavior becomes a way of saying something about what is happening in the relationship.

Money beliefs run deep.
Money connects with our most basic sense of security. Thus when someone feels financially threatened they may lash out (in an effort to self-protect) with an intensity that appears irrational to others. When you’re faced with a situation like this – someone is being overly aggressive, defensive, or resistant – rely heavily on Be Concrete and Just Tell the Truth.

Make consensus the goal.
Money is highly subjective and the other party has his/her own beliefs. Seek consensus instead of affirmation that your point of view is correct. Many friendships, relationships, and marriages have ended because each partner tries to make the other person agree that s/he is “right” about money.
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Growing Pains

Yesterday the Dow closed at 7,100, and man, was I mad. I felt disappointed, angry, and resentful. Is it irrational to have these strong feelings about a non-human entity? You betcha. Is it a little crazy to feel like the market's "behavior" is out of line? Sure, but I would wager I'm not the only one who is re-evaluating her "relationship" with the market these days.

It feels terrible to lose money -- nothing odd about that -- but why was I taking it all so personally? The intensity of my feelings caught me off guard and I found myself pondering the relational nature of my experience. What role was I projecting onto the market, and what enactment was I engaging in? 

The closest parallel I could come up with was one of an adolescent going through the pains of maturation. I had come to expect the market to be a kind of benevolent parent. I followed the "rules" -- save your money, invest it, diversify your portfolio -- and then I expected the rest of it (the nurturing and growth of my money) to be "taken care of." 

Obviously the market is not a parent -- that's not the point I'm trying to make. And lots of people who were a lot more hands-on than me have lost even more money. 

But the growth pain that I'm going through is one of waking up and knowing that I have to be more responsible for myself. I have to do more homework. I have to make more informed decisions. I can't ever trust that my money is just going to be "taken care of."

I don't know what change this realization is going to make in my net worth. Maybe it won't change anything. But at least I will feel like more of a financial grown up living powerfully in the world, instead of a disappointed child. 
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Are You Worth It?

MP Dunleavey has a great article in the NY Times today (subs. req.) about why debt seems to “stick” to some people but not others. Debt may be the result of your negative cash flow, she posits, but it may also be tied to the “emotional underbelly” of your spending.

T. Harv Ecker says something similar in Secrets of the Millionaire Mind. He wrote (and you’ll have to forgive me for paraphrasing, I don’t have the book here in front of me) that most people do not have the internal capacity to create and retain great wealth.

For Dunleavey and for Ecker the solution to one’s financial woes lies not in a better spreadsheet but in cultivating a better mindset.

I’ve definitely seen this phenomenon in my work. People tend to have very strong beliefs about themselves and their place in a money world. The problem is that these beliefs are usually unarticulated and live unchallenged in the person’s unconscious.

Unchallenged beliefs create patterns of behavior that resist every effort to change. For example, if you have an unconscious belief that having money will expose you to envy and resentment, you will always release the money in your life rather than risk being a target of antipathy. You will probably spend a lot of money on others and generally treat money with great disrespect. Any accumulation of cash will create a huge amount of anxiety, and as your bank balance rises so will your fear that other people are judging you.

The “secret” here (it’s actually not so very secret, but it is hard work) is to do some digging into your own financial psyche. Millionaire Mind is a good book, but I feel that books that only focus on wealth building are rather narrow in scope. Financial wellness should be about a lot more than just a string of fat assets. Dunleavey’s book, Money Can Buy Happiness, is a good one, so is The Money Mirror by Annette Lieberman and Vicki Lindner. For those in search of a more interpersonal approach is to start a Money Awareness Club per the folks at the Women’s Institute for Financial Education. Whatever method you choose, bringing your unconscious beliefs about money into awareness can be the most valuable experience of your life.
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