Many individuals receive “money messages” that they assume are true. However, financial advisors argue that spending habits are less about right versus wrong, and more about determining how money can enhance individual goals and values.
In this “Wealth Matters” radio show, we sat down with David Geller, Director of Behavioral Wealth Management at Wealth Enhancement Group; and David Bokman, Head of Family Office Resources at Morgan Stanley Wealth Management. They discussed where our ideas about money originate, and how we can form new perceptions about wealth.
Where Do We Get Our Ideas About Money?
The experts define “money messages” as the set of principles and morals that individuals might have received about money and wealth throughout their lives. David Geller theorizes that a person’s money messages come from childhood and early adulthood. “We all get these money messages growing up: buy used cars, don’t buy used cars, save for a rainy day, spend now and tomorrow may not come,” says David. “We get these messages from our parents and from the communities in which we live. We get them from their words and their actions. By the time we are a mid to late teen, we have solidified our money message and in our brain, we think they are Truth with a capital T.”
The experts also agree that the question of where we develop money messages is a question of nature-versus-nurture. David Bokman points out that siblings that grew up in the same household with the same financial situations might grow up with different ideas about money. Bokman says “I think the reason two different children can view the same message from their parents through a different lens is that we come with predispositions.” They point out that children might interpret that same message differently.
The experts agree that the first step to identifying those presuppositions is to ask yourself what money represents to you. This can help identify financial values.
What are the Best Ways to Manage Money Messages?
Geller and Bokman agree that consistent self-confession is an amazing way to manage one’s emotional relationship with money. Bokman suggests journaling. “If you start with some of these really challenging questions,” he says,” you can get to the place where money becomes something that you use for a better life rather than something that owns you and uses you.” Once an individual is comfortable confessing to themselves, finding a financial advisor that they feel comfortable confessing to will be crucial in building brand new money messages.
Defining one’s values will dictate how money is used. If an individual can decide, ahead of time, whether they value education, or philanthropy, community, family, or any other values that money might assist with, they will know how to identify their own rainy days. “A lot of times, people, regardless of their means, are uncomfortable with the amount that they spend, “ Geller observes. “It causes a lot of shame.” Tying personal values to spending might help individuals feel less shame about what they invest in.
How Can a Financial Planner Help?
A financial planner can help individuals get to the emotional root of their spending habits. Bokman says that people that are open and honest about the emotional roots of their money messages are likely to get the most out of their relationship with a planner. “I like the frame confessor,” Bokman says. “I think that for many people, they need an advisor to help initiate the conversation. Some people are ready, and some people aren’t. But until then, they aren’t thinking about it.” Being honest with a financial planner is the first step to building new habits.
Financial planners have the expertise to build an individual financial plan that meets personal values. A good financial planner, according to David Geller, will listen with compassion and without judgment, while also being honest. “When a person goes to interview a financial advisor, the planner will not only go on about ‘here’s how we manage money’ and ‘here’s asset allocation, here’s the efficient frontier and here’s how we do tax law selling.’ They’re going to have this human, holistic, psychological element as part of their value offer.” A financial planner can help an individual see the whole picture.
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