← HerMoney with Jean Chatzky
HerMoney with Jean Chatzky
Ep 493: Is Money Stress Ruining Your Life? A Financial Therapist Explains Why
00:32:00
The stories we tell ourselves about money and how to change them.
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Your teen adjective used to describe an individual whose spirit is unyielding, unconstrained, one who navigates life on their own terms, effortlessly. They do not always show up on time, but when they arrive you notice.
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An individual confident in their contradictions.
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One thing in life is certain. There's going to be change coming. And with merging money, separating money, adding money for kids, aging parents, a new job. But if we don't have the confidence to have those conversations, whatever you're doing right now with your relationship with money, you're only getting better at. So if you're avoiding those conversations, congratulations. You're getting better at it. Hey everyone.
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A
Welcome to Her Money. I'm Jean Chatky and today I want to start with a question that I get all the time, all the time in our private Her Money Facebook group in my inbox, even from friends, over coffee. And that question is, what exactly is a financial therapist? And maybe even a bigger question. Do I need need one? If you're listening to this podcast, you probably know the basics about money. How to create a simple budget, why we need to keep an emergency fund, the importance of having money in a high yield savings account. But when it comes to our money and our emotions, guilt, fear, shame. Well, that's a whole new ball game. And that is where financial therapy comes in. Today we are pulling back the curtain on what happens in a session with a financial therapist when with a little therapy session of our own. Erica Wasserman is in the house. She's a certified financial therapist. She's also a CEO and founder of youf Financial Therapist and the author of the wonderful new book Conversations with youh Financial Stories and Scripts to Grow youw Money Mindset. She's gonna walk us through why our money beliefs run so deep, how we can start unraveling the unhelpful ones, and how to have healthier financial conversations with the people that we love. We'll be right back I've had term life insurance since my kids were little. It was one of those decisions I made early on. Not because I wanted to think about those worst case scenarios, but I wanted to know they'd be protected no matter what. Fabric by Gerber Life is term life insurance you can get done today. Made for busy parents like you, it's all online, on your own schedule and can be done right from your couch. You could be covered in under 10 minutes with no health exam required. Fabric's policies are flexible, high quality and affordable. We're talking a million dollars in coverage for less than a dollar a day. Join the thousands of parents who trust fabric to help protect their families. Apply today in just minutes@meetfabric.com hermoney that's meetfabric.com hermoney M E E T fabric.com hermoney Policies issued by Western Southern Life Assurance Company not available in certain states. Prices subject to underwriting and health questions. Cozy Earth's pajamas and blankets are so soft, so breathable and so cute that you'll start planning your evenings around them. These are not your average loungewear pieces. Their bamboo stretch knit pajamas have a lightweight feel, a beautiful drape, and they actually sleep cooler than cotton, which means you stay at just the right temperature through the night. And here's the best part. Cozy Earth stands behind every product. Their apparel is backed by a lifetime guarantee and their blankets come with a 100 night sleep trial and a 10 year warranty so you can truly rest easy. Go to cozyearth.com and use code hermoney at checkout for up to 5 40% off your new favorite pajama set and blanket. That's cozyearth.com code hermoney. And if you get a post purchase survey, do me a favor, let them know you heard about Cozy Earth right here. Elevate your downtime with Cozy Earth. We are back with Erica Wasserman. Erica, welcome. I've been looking forward to this.
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Me too. This is so exciting because talking about money you can't do with everybody. It's so crazy, right? It's like Taboo. People don't want to talk about money. So the fact that you have this beautiful big platform that makes talking about money easy and beautiful is just so amazing and I'm grateful to be here.
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A
Oh, thank you so much. Let's start at the beginning. Why not? Financial Therapist is one of those titles, as I said, that makes people curious but also maybe a little confused. Can you explain what you do?
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B
Yes, absolutely. Most people have never heard what a financial therapist is. And then once they do, I get the oh wait, I need one. Or somebody in my family needs one. So we talk a lot about the dollars and cents, investments, returns, how much things cost. But what I do is I talk about the other senses. How does money make you feel? You know, the sleepless nights when the bill comes at a restaurant, how does it feel? Some people are like, let me just grab that bill. And other people all of a sudden have short arms, right? There's an emotion that's attach money that we don't talk about with ourselves, with our romantic partner, with our business partner, our employees, our aging parents. And what happens is it actually impacts both our health and our wealth. Like a deep secret that we're hiding.
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A
How do you know if you really need one? And is financial therapy typically an add on to other therapy or is it an instead of?
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B
Okay, two great questions. One, if you're confident with your relationship with money, skip ahead to the next episode, right? This isn't for you. If you are uncertain, curious, don't understand, maybe some of your patterns or habits have they've come about or want to work on them. This conversation's for you. And having a conversation with a financial therapist is an opportunity to learn and grow about your relationship.
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A
Do you work hand in hand with other therapists or with financial advisors? How do people get to you?
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B
So there's 100 certified financial therapists in the country right now. And generally it's people with two backgrounds. One, they come from a financial planning background or a therapy background. And then I went to Kansas State. There's four or five programs across the country right now that have financial therapy programs. And I have a graduate certificate in financial therapy, joined the Financial Therapy association and that's where I got certified. So this is an additional layer. Personally, in my practice, I don't touch any dollars and cents. So I will work with your financial advisor, your accountant, estate planner, and the same thing with a therapist. Oftentimes I find with therapy sessions you're focused more on the emotion of relationships. You don't really talk about money, how it's impacting you. So this is a specialty in your book.
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A
You say our money beliefs come from three main areas in our lives, our background, and basically how money was talked about or not talked about when were growing up, religious messaging and culture and our own personal experiences. I'd like to actually dig into all three of them. But let's start with the religious messaging and culture because we don't talk about that much on this show what does that have to do with the way people handle money?
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B
So talk about it from religious messaging. Oftentimes you hear in all religions, there's sightings that money is greed, that money doesn't buy you happiness, that oftentimes men are the providers or that you give to charity. And so it could be impacting your relationship with money by sabotaging some of your career goals. Because if you have money, then all of a sudden you're seen as greedy person. I worked with somebody who sold a business and didn't believe he could be successful with money and not be seen as being greedy in the world. And so we had to shift that mindset of how to give back. So let's go back to religion and culture. Culture also is, as you know, 50 years ago, you and I could not be sitting here having our businesses. We would not be able to open up a bank account or have our own credit. So for women, it's a new skill that's being built. And with the great wealth transfer, more and more women will start seeing that there's a need to gain confidence in their relationship with money.
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A
You alluded to this a second ago, but I actually want to dig into it. There are some faith traditions where women are explicitly taught to submit to their husbands. We also have a lot of trad wife culture in the air these days. And in practice, that can mean taking a backseat or having no seat at all when it comes to financial decision making. What does it take to undo this stuff?
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It's a challenge. I'm not going to lie. If you're in a relationship that way, you know, it's easy when you have two partners that want an open relationship around finances, because then it's finding the right opportunities to have those conversations. If you're in a relationship where you're told not to be involved in those conversations, it's a lot harder. The way I work with clients is telling them to start with some maybe storytelling, you know, how could we retire? What does our future look like? And instead of asking for actual dollar amounts, how much is in our bank account, you could start talking about storytelling of what you would like in the future and start listening to some of those details and then the next story, hopefully layer in layer, you're breaking down some of the walls as well. To get more information, you pointed to.
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Our backgrounds, how money was talked about, growing up or not, as well as our own personal experiences. Can you dig into that a little bit and how those shape the way that we are with money?
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B
Yes. So growing Up. I was taught you only bought on sale, right? That was my background. And not only that, we'd hide the packages in my mom's car until my dad went to work and we stuck them in. That was my background. I didn't know that you could actually buy something retail and feel good about it. And it was just those messaging. And we all have our own personal messaging and background. I worked with a client who went indoor camping. Do you know what indoor camping is? No. Yeah. Her background was the power would go out because they didn't pay the bill. Her parents were smart enough and creative, which, as a parent, I give them credit, where they called it indoor camping. Open up a can of soup, we're going to eat it from the thing. Get your flashlight, we're going to read in the dark. For her, her background was indoor camping was not paying the bills. Another client only put everything on credit card and so could never pay cash. When she went out to college to go to a bar or restaurant, cash was not available to her. And so that was her background around messaging, around money was. Everything was on credit.
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A
How do these childhood experiences show up in adulthood?
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B
They show up in weird ways without us knowing oftentimes or very powerful messaging. I was just on a call with a friend that said it annoyed her that her husband bought greeting cards. And I was like, greeting cards? And we started talking about it as a child. That's how their family showed love. They would buy greeting cards. And today, greeting cards are expensive. And she doesn't see a value in greeting cards. But based on his background, greeting cards was a way that you expressed caring for somebody. And so that's just a small example of a background story of how it shows up in your current relationship. She'd rather that six or seven dollars be in an ice cream or in something else. But for him, it's the value of the greeting card that's important.
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A
You mentioned in your story, your money story, your money history. You grew up hiding the shopping bags when you came back from the store. But then you also went through a lot of huge personal changes. You lost your dad. You went through a divorce with three kids under four. How did those experiences shape the way that you manage your own money today? And how did they shape the way that you work with your clients?
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Yeah, so back in my background, talking about money was normalized with my dad. It was just something that we just did. And because I enjoyed math, it was easy. So going to the grocery store was, how much is two cans of beans? If it's 99 cents. How much is one can. It just was natural conversations over life. So I got a degree in finance. I worked at IBM, lived all over the world in consulting. I was able to merge money with a partner, change country. So I had to change currency, learning new banking, and then I had to separate money, and then I had to worry about inheritances. And what I realized when I looked around the room, not the physical room, my virtual room, was that I was handling those conversations differently than other people because I had confidence to ask questions and because of my curiosity and because of my understanding, it led to better solutions for me in the long run and for the people that I cared about. So when I heard the term financial therapist, I was like a light bulb. Moment went off, and I was like, this is how I can help people. Because one thing in life is certain, there's going to be change coming. And with merging money, separating money, adding money for kids, aging parents, a new job. But if we don't have the confidence to have those conversations, whatever you're doing right now with your relationship with money, you're only getting better at. So if you're avoiding those conversations, congratulations, you're getting better at it. And so I want to empower people to start having those conversations, which is how I ended up with writing the book Conversations with your Financial Therapist. And then there's stories and scripts, because I love stories, and I want to see what real life situations could look like, which is why the scripts came about, because I want you to see how an adult child can move back home with a parent and argue over the air conditioning, you know, being at 72 or 65, and who's going to pay the difference? How can you have a productive financial conversation around that?
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A
You mentioned early in our conversation, there are only 100 certified financial therapists in the country. Not enough. What that says to me is that many of the people who are listening may not find one in their neck of the woods. And so I want to go through some of those scripts, starting with the money mindset method that you use with your client to give them some real tools that they can walk away with from this conversation to help improve their own lives. We're going to do that in a sec. We'll be right back. You know what doesn't belong in your summer plans? Getting burned by your old wireless bill. While you're planning beach trips, barbecues, or long weekends with your girlfriends. Your phone plan shouldn't be the thing that's draining your wallet. That's where Mint Mobile comes in. For a limited time, Mint mobile is offering three months of unlimited premium wireless service for just 15 bucks a month. That means you get the coverage and speed you're used to on the nation's largest 5G network. But for way less this year. Skip breaking a sweat and breaking the bank. Get this new customer offer and your three month unlimited wireless plan for just $15 a month. That mintmobile.community that's mintmobile.community upfront payment of $45 required equivalent to $15 a month limited time new customer offer for first three months only. Speeds may slow above 35 gigabytes on the unlimited plan. Taxes and fees extra. See Mint Mobile for details. When did making plans get this complicated? It's time to streamline with WhatsApp, the secure messaging app that brings the whole group together. Use polls to settle dinner plans, send event invites and pin messages so no one forgets mom 60th and never miss a meme or milestone. All protected with end to end encryption. It's time for WhatsApp message privately with everyone. Learn more@WhatsApp.com we are back with Erica Wasserman talking about financial therapy and how maybe you can borrow from her toolkit and put these tactics to work in your own life. You use something with your clients called the Money Mindset method, and it's a way to help guide yourself through financial conversations. It's based on the acronym money. So let's go through it and sort of explain to people how it works and how they might be able to use it to have a conversation of their own.
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Let's do it. So I find myself approachable, actionable, and a realist. So I needed something that I could give others that had a framework for that. So I have clients coming to me from all over the world, all different stages of life, and I needed to break it down into some very simple, actionable, realistic steps that anybody could take anywhere where they are. So I came with the Money Mindset method and of course using the word money. So I'm going to start with the letter M. Make the conversation comfortable. It means time of day, the tone, the temperature. Here's a great example. When somebody's walking out the door for work, you don't yell out, hey honey, did you pay the electric bill? Or I was just talking to a client. She's like, I always ask my husband about the bills when we're in bed together falling asleep because that's where my mind's racing. Make the conversation comfortable. What does that mean? The Last time you had a productive conversation, where were you driving? Was it on a Sunday morning? Was it before lunch? Like, find the right time to make it comfortable because that's going to set the tone for a good conversation.
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A
The O stands for one by one. I'm assuming this means we don't pile on.
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B
Oh, this isn't like six years ago we gave your mom money and she hasn't paid us back. And so why are we going to her house for Christmas? And you know, it's going to cost us thousands of dollars. Here's a great recommendation. Set a timer. If you're working with a partner, Write down over 2 minutes the questions that you have, and then you get to the end, which is nurtured shared goals. So when you look at your list of questions, what is something that is the same? What can you nurture and why is it important to both of you? And again, this could be a romantic partner, an aging parent, an adult child, and that come to the conclusion together of why you can nurture this goal.
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E is evaluate practical solutions. You know, this one speaks to me. I'm all about the tactical and practical. I want real data that can help me get to a real helpful place. How do you do that?
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This is your big brainstorm. This is let's start thinking of things inside the box and outside the box. And so however you need to do this again, this could be a brainstorming session on paper where you again, set a timer. You each brainstorm separately or you brainstorm together. Hey, you know, we're looking to move. We need to call the movers. Let's research movers. Let's call the neighbor down the street. This is your opportunity to start brainstorming ideas. Because when we work together, we find out more information and come up with perhaps a better solution.
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And finally, why is yes to compassion? Do this nicely, please do this nicely.
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For yourself and do this nicely for the person who's showing up. So if you just had a hard conversation with your aging parent about bills, you might need on the way home to stop at the park and go for a walk. You also might need to take a deep breath and go get a glass of water and have compassion for your parent sitting on the other side of the desk too, that has never had a talk money with their child. So these conversations are uncomfortable because we haven't done them. So having compassion and empathy really can shift the conversation to a positive light.
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A
You write an entire chapter about finding stability in financial situations. I know a lot of my listeners have been through divorce. I know a lot are thinking about one. You made it through your divorce in a few months with just a mediator and in a process that is called collaborative divorce. Can you tell us about how you did this so seemingly easily?
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B
Yeah, seemingly easily. Still very emotional. I was 35, three kids under the age of three. Was not on my bingo card to get a divorce, believe it or not, without having the money mindset method. I was actually using the money mindset method. And we as parents of very young children, decided in the very beginning that they were going to be our focus of this divorce. And so we didn't need it. But you can, I recommend to other people, is put the pictures in front of your kids when you're ready to sit down to talk about how you're dividing things up. Because then you see what you're doing this for. Not short term, not pissing off, you know. And I remember we were negotiating over furniture. It was important for him to have more furniture than a percentage than I did. At the end of the day, that didn't matter. At the end of the day, my health and wealth and our children's health did. So also knowing which fights to pick, right? You know, staying focused on the important thing which is getting through this with your mental stability hopefully intact and emotionally, you'll know it'll be hard no matter what.
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A
What mistakes do you see women who are going through divorce making most often.
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B
Accepting what's put in front of them because they're afraid to ask questions or back to. They don't even know what questions to ask. This hasn't been in their wheelhouse. Their father took care of the finances, their husband took care of the finances. So why would I even know to ask about retirement planning or insurance policies? So if you don't know what questions to ask, go call a friend, call two friends. The first one might not have the right answer. Call a lawyer, call local group, a divorce group. They're going to have responses. Also remember, everybody has their own personal experience as well. So understanding what's important to you is important. But don't be afraid to ask and be curious.
- [24:23]
A
When it comes to talking to parents about money, older parents about money, one of the things that I hear a lot from members of my community is that their parents just don't want to go there. So what have you found? Is a successful script for getting parents to the table.
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B
So there's a couple ways to handle this. One is, hey, Joan just lost her mom, and I see what she's going through and it's really weird for her to go through her parents drawers right now and try and figure things out. I don't want to be in that situation. Can you help me understand your finances more? So that's one approaching that way. The other one is we're going to have a couple of options. If we don't have estate planning in place, the government's going to decide what happens. I rather understand your wishes and dreams and thoughts of what you want to happen. So by putting it on, do you want government to decide or for us to decide as a family also can help spark conversations.
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A
How do you get over the objection that this is an invasion of my privacy or that I want to, as the older parent, maintain my independence?
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B
Oof. Yes, we see that a lot. It might be just starting with let me take you to an estate attorney's office. I will drive you. I can sit outside for the first consultation so that way they don't feel that you're invading the privacy. Or it could start with small things like, hey, what's your login for your, you know, say your bank account, but where are your credit cards located? Do you have any debt? Just so I know what, where the banks are. Forget about the dollar amounts that are associated with it and start having slow conversations that way.
- [26:07]
A
In your book, you talk a lot about financially supporting adult children, which is something that again, we hear an awful lot from our community. And you tell the story of a mom whose 24 year old daughter moved home after traveling for a few years. The daughter had no savings and this has halted the mom's plan to move. She wanted to downsize and to make her life, the mom's life more about her own needs. How did you work with this pair, this mother daughter to get them through this?
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B
Yeah, it's a dynamic we're seeing more and more often right now of adult children moving home. Listen, it's all about talking and communicating and understanding. So for both of them, it was understanding that this was a temporary solution. It was putting in some boundaries in place of how long she's staying, what the expectations were and how she was going to earn income. For the daughter, that's a script. That's about the air condition. The daughter moves home and she wants it nice and cold. And the mom's like, why am I going to pay extra money to have you home? What they ended up doing is they pulled up the bill from the prior year and whatever the difference was, the daughter had to pay. It's about finding solutions within what you're doing. And the two of them were able to work out a nice solution. Of six months she's lived at home until she was ready to take on the next job and move out or whatever the next chapter was going to be in her life.
- [27:35]
A
One of the issues that I've seen recently come up once again in our Facebook group is this issue of financial procrastination that there are some people who can't seem to get themselves to pay the bills on time, to meet the deadlines for open enrollment, to send a package before you have to send it overnight when it costs three times as much, what is that and how do you deal with that?
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B
That's a pattern, right? So it's not just like one time. And so if we start to look into the pattern, and that's where the financial therapy work would come into, is what were those triggers that have led that person to be money avoidant? And then once they became money avoidant, back to what I said earlier, whatever you're doing right now, you're getting better at. And so they haven't taken that step to improve their relationship with money. So this is a great opportunity to start that next step. And sometimes it's as easy as just I tell clients, some clients, I want you to just log into your bank account for free, five minutes each day and just look at it. Don't do anything with it. You know, it's like the same thing, like opening the mail. If you just don't open the mail, it doesn't mean the credit card bill's not going to go away. Sometimes it's just opening it, looking at it the next day, you look at it again the third day, you might be willing to be like, okay, this is what I can do. It's getting comfortable with the numbers and getting comfortable with your relationship with money, because it will be there literally to the day you die and after, because your inheritances and what you leave behind for your family. So the better you are at understanding your relationship with money is also going to help you in your legacy as well because of what you're going to leave behind for your family.
- [29:28]
A
Clearly, getting comfortable with the numbers is really, really important. But one of the themes that runs through your work is that so much of our money stress is not really about the numbers. It is about the stories that we tell ourselves. For my listeners who feel stuck in fear or scarcity even when their bank account says they're okay, what's one mindset shift that they can start practicing today that could change their relationship with money over Time.
- [30:00]
B
Okay, we're women. Most of your listeners are women. We are great storytellers. So oftentimes we tell ourselves these crazy, amazing, sometimes beautiful, sometimes scary stories, but they're not reality. And so if you're having some stories and lines that are coming through around money, ask yourself, is this fact or is this fiction? Before bed, you're getting restless. Thoughts are coming to you. Write down all the things that are happening in your brain and then put a T or F next to it. Is it true or is it false? If it's false, we're going to cross that off and worry about it tomorrow or another day or never. And if it's true, okay, is there an action plan I could take tonight or tomorrow morning on it and move those to the ones to work on. But leave the storytelling to the authors, to the books you're reading, and not to your finances.
- [30:59]
A
Last question. Erica, as we've been talking about you, work with people at some of the most vulnerable financial crossroads in their lives. Divorce, retirement, caregiving, loss. When money feels like an open wound, how do you help your clients balance the emotional healing that they need with the practical financial decisions that really can't wait?
- [31:22]
B
First thing that came to mind is breath. Sometimes it just is taking a big deep breath and sitting with it and then looking at it and working with the right people and team. And know that you don't have to do this alone. In fact, don't do this alone. So look for experts just like you would in other areas of business growth or nutrition growth or exercise growth. Money is the same thing. Look for people who have the strengths there. There's a lot of things I'm not good at and I go to other experts on if money is not your strength, rely on others, especially when you're so vulnerable. That's the best advice that I can give Erica Wasserman.
- [32:04]
A
The book is called Conversations with your financial Therapist. Stories and scripts to grow your money Mindset. Erica, thanks so much for being here.
- [32:13]
B
Thank you. This is wonderful.
- [32:15]
A
And if you're ready to keep the Money conversation going, HerMoney has three amazing programs designed to help you feel more confident and in control of your money. There's Finance Fix. It's our four week coaching program that helps you rethink your spending, find hidden savings, and make smarter choices for the future. Our pre retirement program runs for six weeks and walks you through building a retirement strategy that's personalized for your next chapter. Finally, there's Investing our investing club for women. It meets every other week on Zoom it is a supportive space to learn, ask questions, grow your investing confidence and build your portfolio. And your first month is absolutely free. These programs are truly helping level the playing field for women financially. I'd love for you to join us. Her money is produced by Hayley Pascalides and our music is provided by Video Helper. Thanks so much for listening and we'll talk soon.
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B
I'm Nate Silver. And I'm Maria Konnikova. We're journalists who moonlight as high stakes poker players and on our podcast Risky Business, we bring an analytical lens. Thinking about odds, incentives and outcomes comes to the choices shaping our democracy because.
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A
Every move in politics is a calculation.
- [33:47]
B
And sometimes our leaders can make bad bets. You don't say Nate. If you want to understand what our politicians are thinking and what's at stake with each decision they make, this show is for you. Listen to Risky Business wherever you get your podcasts.