EP 11: Exploring Money Attitudes

Hello! and welcome to Everyday Finance and Economics with the Siglers! The podcast where we discuss what you need to know about personal finance and economics and give you practical advice on how to get started and be smart with your money.

This episode is a deep dive into money attitudes! What they are, common debilitating attitudes towards money and how to work through them. There are many extreme actions taken because of people's attitudes towards money that are not beneficial to their financial lives, but fortunately, they can be changed! Learn how on this week's episode of Everyday Finance and Economics with the Siglers. And be sure to join us next week when we start talking about retirement!

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Intro music: 

Coffee & Lullabies R&B mix by J.Lang (c) copyright 2020 Licensed under a Creative Commons Attribution Noncommercial  (3.0) license. http://dig.ccmixter.org/files/djlang59/62099 Ft: CrazyLittleAsian aka SHA

Coverart by Karina Ng @karina.ng on instagram

Transcript

Speaker 1: 0:09

Hello, and welcome to everyday finance and economics with the Sigler's the podcast where we discuss what you need to know about personal finance and economics, and give you practical advice on how to get started and be smart with your money. We are your hosts, Glenn and Christina.

Speaker 2: 0:25

So Christina, what's going on in the economy this week.

Speaker 1: 0:29

What matters this week? Dad is Microsoft. As of last week, Microsoft became the second us publicly traded company to close above a$2 trillion market capitalization, their roads to becoming one of the most valuable stocks in the market can be attributed to their new focus on cloud-based systems and acquiring other companies like LinkedIn. Also, the demand for Microsoft teams really pushed them through this pandemic. Uh, the reveal of the new windows 11 update, uh, helped too. And it was what pushed them over the edge as their new app store is going to let developers keep all the revenue from third-party sources, as opposed to apple and Google play stores, 30% fees. And our economic term of the episode is market capitalization or market cap. Is it as more commonly known, uh, which is the market value of a publicly traded companies, outstanding shares. So basically the price of one share times the number of shares that there are total. All right, dad, I think it's time to get into this week's topic. What are we talking about today? Today? We're talking about money, attitudes, money attitudes. What is a money attitude? Tell us a little bit more debt.

Speaker 2: 1:39

Well, everyone has a month attitude towards money for some money is a central issues for other money is just a tool yet some use money to control things and people. How do you develop money attitude? Your past experiences and environments are the biggest factors to, to, uh, in, in the formation of your money attitude. The good news is that your money attitude is a learned behavior and what is learned can also be unlearned. So if you have a good money attitude, you know, keep, keep on with it. If your money attitude is leading you to some, some, uh, bad behaviors or some bad judgments, then those things can be adjusted through learning. Yeah.

Speaker 1: 2:21

Why is understanding my money attitude important

Speaker 2: 2:26

Given the fact that money affects many areas of our lives. It's important for us to understand and have good, have a good understanding of our own individual money attitudes. Have you ever taken the time to figure out your emotions about money? If not, this is the perfect time to analyze your money attitude, to get a better understanding of your perceptions of money. How do you feel about it? You know, people often have complicated relationships with money or attitudes toward it. Um, uh, have a major on our financial outlook, an unhealthy perspective, combined with poor spending and saving habits may make it difficult for you to move your life in the right direction. Financially. Fortunately, you can start making changes simply by being more conscious of the way that you view money.

Speaker 1: 3:18

This kind of sounds like more money, more problems dead.

Speaker 2: 3:22

Uh, that's probably an apt description description of, but, but think about it. Yeah. More money, more problems with people who don't have money, right. Have problems with money as well. So it's a psychological. Absolutely. Absolutely.

Speaker 1: 3:43

Do you have any examples of like bad or like avoidance?

Speaker 2: 3:47

Well, you pick that you picked up on one of the key ones, which is avoidance. Um, avoidance is not just a behavior about money. Um, it's, it's, it's a behavior that, that people fall into when there's something that they think is bad that they don't want to, they don't want to deal with, you know, your tooth hurts, you should go to the dentist, but you don't want to go yeah. Something your, your back hurts, but you don't want to go to the doctor, you, or you want to ignore it and hope it all goes away. Um, that's not how people often avoid thinking about their money problems entirely rather than trying to work through them, just like those other issues.

Speaker 1: 4:30

So how do people overcome this avoidance trap?

Speaker 2: 4:34

Well, there's, there's a few ways to address it, but it may not be, uh, B it may not be easy. Uh, first you really gotta be honest with yourself, uh, reviewing your F you know, you know, a lot of people, um, try to avoid opening their bills or financial statements. Well, you've got to go and take an, uh, an earnest assessment of where you are, where your spending is, where your counts may be. Um, it's a necessary step toward a better financial future future understanding where you are. The earlier you move past your fears and start being realistic about your financial situation, the easier we'll, uh, be to turn things around, letting bad habits go unchecked only makes it tougher to change them later on. I'm going to be honest, you may need to talk to some folks about this to help, to help you get over it. So, uh, uh, you know, another couple of things that you can can work on is look, start with small meaning. If you're having problems with, uh, with a certain issue, start with small manageable goals, don't try to change your financial life. You know, once start with something small, you'll have a better idea of problem areas and what you can do, uh, look, understand your, your spending habits, evaluate them. You'll get a better idea of what you can change. Don't overwhelm yourself by trying to change everything. Yeah. Gradual changes. The way to fail is trying to take on too much at once, right. And, and not setting unrealistic goals. And the other thing is, I said, you know, you might need some outside help. Well, there are things like accountability, partners, somebody to help you make sure that you, you do the things that you need to do. This, this works in weight loss. This works in a lot of other things. Um, and it, it can help people with their finances as well. And so that person's gotta be somebody that you trust, right? Somebody you can have earnest, open, honest conversations with and someone that can, you know, th that, you know, when they say something that can call you out and you will listen. Yes, absolutely. So that's the type of person you need.

Speaker 1: 6:53

What is another attitude that people struggle with?

Speaker 2: 6:57

Well, one of the, one of the easier ones is overspending that that's an easy habit to fall. You know, overspending often goes with avoidance. I didn't see my credit card bill. So it can't be that bad

Speaker 3: 7:10

So I can continue to spend.

Speaker 2: 7:13

Um, but it's, it's, it's a distinct attitude that affects each person differently. And while spending too much money on status, symbol items, such as fashion or cars, uh, others overspend on things like eating out, going out for drinks, small, you know, those small expense items they add up, they add up yeah.

Speaker 1: 7:35

$5. A coffee adds up fast. Yes.

Speaker 2: 7:39

So when you spend too much money, uh, uh, too much of your paycheck, it's easy to fall into debt or have money, have trouble saving money because you can't, you can't spend or save the same dollar twice. So if you spend it, you don't have to say saving more money each month allows you to get out of debt and build an emergency fund to cover some of those unforeseen expenses that happen to people in life. Yeah.

Speaker 1: 8:07

You can't have your cake and eat it too. How do we overcome this challenge of focusing on immediate needs? Because it's really hard. Like you have the, the, the website up with the, whatever you're buying up right now, and you can, you have your number memorized, so you could just put it in right now and get it. So how do we curb that and overcome the challenge of instant gratification?

Speaker 2: 8:32

Well, for, for the, one of the more, um, relevant steps is to make savings a priority, take that longterm, um, savings or investing goal and take that money off the table first. Right? So

Speaker 4: 8:50

You get a chance to use it. That's

Speaker 2: 8:51

The invest invest in yourself first. So take that, pick it off the table. Yes. You have less money to S to, to, to spend each month, but that's really what the objective is. Yeah. You you've taken money, you've taken it off the table. It's going towards your long-term goal. Now you've got to manage the rest of the, the, the everyday functioning of your life with the money that's left over. So we've talked about that in, in our budgeting, uh, episode, we've talked about the 50, 30, 20 rule. It's a popular trend. You don't have to save 20%. You know, if you're starting out, start out with 3%, five, whatever, it just start, start with some percentage. And then, you know, grow that over time. Something, you know, even if it's three or 5% starting with that is always better than nothing. And giving, getting started gives you something to build on in the future. We've talked about starting investing again, start, you know, w through work, um, you know, through, uh, 401k plans. But if, if you don't have that, you can still start investing. Um, you can, you know, you can, you use apps, you can, um, you can put money in the bank, even though that's the old fashioned way, but go ahead and get started, you know, with whatever it is is a$10 a week,$25 a week,$50 a month, whatever the amount is just like I said before, um, you just need to get into that habit and making it a regular part of your, uh, of your, um, financial behavior, and then take advantage of your company's match. If you work for a company that offers a 401k or, or any of those types of, uh, of retirement plans, what you want to do, if you can, if they match the first 3% that you contribute. Well, your first goal is where, where do I put my first, uh, 3% of my money? You put it so that you get that match because that in essence that's free money. Yeah. So if you put in 3%, you get an automatic 3%, why not take, that's a hundred percent gain on your money. Uh, and if you want to, if you can put in more do that, because there's other advantages to you. But if, if you can't just know that there's, um, that there's extra money out there when you can, uh, match or, or, or, or max out on that company match,

Speaker 1: 11:32

What if I just want more, what if there are things that I know I want now that I just can't afford today? Why shouldn't I have them?

Speaker 2: 11:41

Yeah. Look wanting more is not inherently bad in itself. Uh, those thoughts often drive us to strive for more, to, to, to do more now, how do we do, what do we do? We acquire that more responsibly within our budget means, do we set out a plan to go out and achieve those? You know, that, that's what we're talking about here. Uh, not, not just going out and acquiring, just because you have credit card while you may have blown up your budget for the next two months. Well, is there another way, can you save for it first?

Speaker 1: 12:19

Yeah. So you don't mess up your mess up your budget

Speaker 2: 12:24

And, and, and doing that and doing it in that manner allows you to not worry about the other aspects of your financial life.

Speaker 1: 12:34

How should folks address this money attitude?

Speaker 2: 12:38

First, I'm always a proponent of people looking to improve themselves and advance their careers to help them reach their full potential professionally and financially, of course, as I said before, there's a balance to be struck here. If you find yourself consistently needing more money, money, there's probably no amount of money that would fix your problem, right? If you always have to have more, no matter how much money you have, that that's a different issue. Um, rather than blaming your current financial situation, you gotta be realistic about your income and the kind of lifestyle you can afford for some people, the need for money stems, from a deeper insecurities that go beyond personal finances. You know, you, we always, um, um, take the position that your money should work for you, not the other way around. Right. Um, in those cases, you know, some people might want to talk to an experienced therapist about your financial impersonal situations. If you have trouble managing them on your own, secondly, don't just spend money more money because you can't, you know, if you don't budget well on your currently salary on your current salary, a raise may not make things any better. You just keep having lifestyle creep and you know, that that's natural. I make more money. I should be able to have, you know, better things, nicer things, you know, uh, go on nicer trips and so on and so forth. That's part of the goal. But again, did you, did you do it responsible? Um, okay.

Speaker 1: 14:15

Yeah. So do some people just have anxiety about their fi financial conditions?

Speaker 2: 14:21

Yes. Um, money and current financial con conditions can be constant source of problems and anxiety. Some people just have tendencies to worry about money more than others, but, you know, look, there are people that are just have more anxiety, um, anxiety about money, affects people in many ways and impacts both your financial and your mental health. Many people with anxieties feel guilty about spending too money or not saving enough. They may hide their financial struggles from their friends or family that creates friction in itself. You know, if you're going out shopping and buying a whole bunch of stuff and then hiding the purchase or hiding the records or hiding bills yeah. That isn't, you know, a significant challenge to the trust within the family relationship over time, these attitudes can lead to dysfunctional relationships, not just with money, but with the people that we share our lives with, um, money is a common trigger for people with anxiety disorders and, and each one can make the other more difficult to manage overspending or even over saving, you know, we're where people just won't spend any money, uh, and other bad financial habits often stem from money-related anxieties.

Speaker 1: 15:51

So what are solutions to these situations that seems a little bit more than just money related. Yeah.

Speaker 2: 15:58

Uh, yeah. Th those, you know, a lot of those issues that I just mentioned are, are more than money related and mom access to money. Won't solve those problems. Um, this may be, uh, about creating some additional discipline or dealing with the, the, some of the root issues. Right. Um, that, that you're facing. Um, but yeah, but you've got an F first, you've got to identify that there's a problem. Um, and, and so again, there, you might need to talk to some, some people, you know, about your financial situation and about your personal situation.

Speaker 1: 16:40

Can people go too far with budgeting and financial control?

Speaker 2: 16:46

Um, the short answer to that is, yes. Some folks have mastered the basics of budgeting and are easily able to establish a lifestyle that's comfortable and they're on their way to achieving their goals, financial independence, early retirement, charitable endeavors, just to name a few. Um, yet there's some people who have to hold on to every dollar because of what not having the money means to them. Sometimes even at their own expense, living so far below their means that you might think that they're impoverished, you know, while living below your means is a key part of financial discipline. Uh, yeah. Don't, don't spend every dollar that you have, but taken to the extreme, just like a lot of other things can lead to, uh, a can reflect unhealthy attitudes. And the question you've got to ask yourself is why are you accumulating all that well, for the benefit of whom the pursuit and of wealth, you know, should not be an end to itself in itself. Yeah. Now what are you some of the richest, you know, there's some folks in certain industries who disagree with that,

Speaker 4: 18:03

But, but

Speaker 2: 18:05

For our purposes, and I V I take the view that money's a tool and, um, you're, you're doing it to enrich the lives of you and your family. That doesn't mean I have to have every last dollar there is in the universe in order to make that order. Right. All right. That's our show for today. Thank you so much for listening and be sure to, uh, to join us again next time when we discuss retirement planning. Yes.

Speaker 1: 18:35

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