Tag Archives: finance

Needed for Our Time: A New American Dream

Do you find yourself thinking about your expectations for financial well-being and how they’ve changed? We hear about this subject daily and we are all left with that puzzling question of what our future will hold? Americans are known as the eternal optimists always finding hope and feeling like we can fulfill our dreams to have the “good life”. However, in talking to many of our regular community members on www.kathleengurney.com, I’m finding a very different sentiment. Instead of optimism; I hear fear, anxiety, uncertainty, and even pessimism.

How soon might we find a crystal ball? Wouldn’t that be great? We all want reassurance that we’ll be okay. Of course, as adults we know that we can always do something in our own behalf to empower ourselves, but I find that there’s a desperate desire for the road map of how to get there from here.

So, in this state of distress. we can all follow the prudent advice of the rehabilitation programs that advocate day-by-day planning and focusing on what we can control. For me, I know that I can manage my anxiety about the future by having a concrete plan for my priorities. I try to make my goals reasonable, realistic and rewarding. My clients tell me they use those three descriptions and use them to manage their financial behavior and feelings. Clients find that my advice to take small steps consistently and purposefully help them achieve big gains over time.

So, maybe our new dreams will evolve and become clearer as we all start to focus on what’s most reasonable and rewarding for each of our individual situations.

Emergency Money Talks

A Couple’s Guide for Managing Financial Stress While Building and Strengthening Relationship Skills for Financial Success: Emergencies require exceptional skills in coping with financial and emotional conditions deemed out of individual control. Developing healthy coping skills is paramount to managing emergency conditions that could otherwise create havoc for families. 1. Organize regular “money meetings” to discuss your financial situation, issues and goals. Use this time to brainstorm creative solutions to problems and generate ideas to improve your future. 2. Time your financial discussions carefully. During the morning rush, late at night or after a bitter argument are not good times to discuss financial topics. A lazy Sunday afternoon, a quiet weekday evening, or a leisurely walk are better choices. 3. Set realistic goals for the discussion. You cannot change the past, or miraculously change the conditions that created the situation but you can change the way that you react and manage your current situation. Be clear about what you want to achieve. 4. Work with your partner’s personality, instead of against it. One of you makes financial decisions instantly, while the other one deliberates for days. One of you hates paperwork, while the other has anxiety if every blank is not filled out completely and perfectly. Focus on a positive outcome, not the method of traveling. 5. Avoid blaming your partner. Think about differences in money management as differences in perspective instead of moral failures. In most cases, the person you love is sane, reasonable, and healthy. Treat your partner with the respect deserved. 6. Cultivate a healthy respect for reason. Don’t become so emotionally attached to your position that you ignore reality. Seek the solution that best fits the situation, whether or not it fits your preconceived notion of how the problem could be solved. 7. Expand the pie. Creative solutions can ensure that both of you “win.” Instead of clinging to your position, try to find a way to satisfy your partner and yourself in how you approach your finances so that you achieve your individual and joint

Personalized Service and ‘Plain Vanilla’ Products: A Winning Formula for Advisers?

In reading an article in the Wall Street Journal, “Economic Policy ‘Nudge Gives Way to Shove” it again became apparent that economic pain is substantially more relevant on an individual basis – for individual clients and their trusted advisors.

The Obama administration naively thought that institutions would feel consumer pain and alter their policies and practices so that the individual consumer would be able to make suitable and rational financial decisions. If only consumers could benefit from what the Administration proposed to be “plain vanilla offerings” consumers would not be victims of institutional lack of transparency and self-serving products and policies. To that end, the administration thought public shame and exposure of these self-serving practices would alter the institutions’ behavior shaming them into adopting the administration’s suggestion of “plain vanilla” offerings. Ah, such naïveté.

What Obama et al have learned is that “institutional decision-making” is not driven by emotions such as shame, pain, and empathy for others. Rather it is much closer to rational economics; i.e., profit is profit and there is nothing personal or emotional about it. Shame is not part of the equation for institutions, says the Wall Street Journal.
So if this is true, it seems more relevant than ever for individual financial advisors to set themselves apart and deliver services which enable their clients to understand what’s most suitable for them and their individual situations.

In this economic climate, consumers are highly anxious and are experiencing a crisis of trust. Some feel that they are over-reacting in their distrust and falsely accusing all financial professionals; i.e. guilty by association. So, advisors who have always been empathetic and ethical are guilty by association. This is unfortunate.

More than ever, it appears that consumers need ample time for understanding what products are suitable, building confidence and trust in the advisory process. Most importantly, they need a sense that their individual situation will be understood and that products will be transparent and tailored to their needs. This isn’t news.

There are plenty of financial professionals delivering such services but unfortunately many consumers don’t trust themselves in knowing when and whom to trust. When asked how they would know that they had found such a trusted financial advisor, most agreed that they’d know because their individual situation would be understood and that this advisor could work with people like them.

This is the central theme of my work, www.financialpsychology.com.

Managing Investor Fears in These Challenging Times

Today more than ever, consumers need and want trusted advisors to help them cope with their fears and anxieties. They’re looking for a way to assure the safety of their assets and a way to assure their sense of financial well-being in a challenging financial environment. While assets are tangible and easy to measure, it’s more difficult for advisors to develop a gauge of how to deliver and measure their skills in delivering a sense of well-being.

Here are some tips that have worked for advisors based on feedback from clients:

– Set an example of stability and confidence. If your clients sense that you are clear about your priorities and in control of your actions, they will identify with your courage and strength. Your example will help to show leadership during these challenging times.
– Show caring and support for your clients. Inquire about their well being and that of their families. The clients who need you most may not have the time or the motivation to make the call.
– Help your clients to develop a sense of perspective. Economic conditions have always fluctuated at previous times of national and international challenges and crises, but the underlying strength of the American financial system has always shone through in the long run. Any hardships caused by recent events will not last forever.
– Remind your clients to take some time to relax. Emotional stress can cause fatigue, anxiety, insomnia, body aches, and other physical symptoms that hinder the healing process. Exercise, hobbies, and recreation can ease the mind and help your clients to deal more effectively with their situation.
– Remind your clients that not making dramatic financial changes during times of uncertainty and anxiety can be a sign of patience and prudence, not cowardice.
– Acknowledge your clients’ concerns and fears, while cautioning against impulsive and ill-considered actions. While we are all angry and disappointed, and we all feel uncertain about the future, we can cope best by focusing on what we can do to help ourselves and our families.
– Take this opportunity to review each client’s financial situation, to advise him or her regarding any changes that might need to be made. Taking small constructive actions at this time can help your clients to feel in greater control of their lives.

copyright 2010 Kathleen Gurney, Ph.D.