Ask Dan and Jennifer » financial problems

Americans Less Worried About Debt?

Dr. Bonnie Eaker Weil — Fri, 25 Sep 2009 00:00:31 +0000

First the bad news – Unemployment rates are high, peoples’ life savings and retirement investments are still depleted, home values have tanked. Now the good news: Surprisingly, Americans are feeling less stress from financial debt these days.

The gist of a study, conducted by the Associated Press is that people are optimistic that they’ll eventually be able to get out from under a mountain of bills, a major factor behind the decline in stress from last year.

According to the poll: Debt-related stress was 12 percent lower this year than in 2008. “People now have some optimism that the worst is behind them,” said Paul J. Lavrakas, a research psychologist and AP consultant who analyzed the results of the survey.

Growing Your Relationships In Financial Crises

As I’ve mentioned in previous articles, staying in has become the new going out, which – in spite of the fact that people and families are dealing with depleted finances – has had some positive effects. Families are connecting. People are viewing their budget as a team effort. Couples are saving more. All these things are also likely factors in the increase in positive debt perception that the study reveals. People feel like they might be gaining control of their lives again.

In my book, Financial Infidelity, I encourage people to talk about their money history – both in their own lives, and as a reflection of what they learned growing up, or in their past. It seems like more people may have started to do this, and subsequently have gotten on the same “financial page” and are willing to make a few sacrifices whereas before they may not have been as open to the idea.

Avoid Prolonging The Recession But Take Your Lessons Learned With You

Of course, this has had somewhat of a negative effect on the economy as a whole – if Americans were to sharply cut back spending, that could prolong the recession and hopes of recovery this year.

But every cloud has a silver lining, and as such, Americans aren’t dealing with record-high gas prices as they were last summer. Credit and financial problems, which reached a crisis point last fall, have shown some signs of easing.

It would be naïve to think that because overall debt-related stress is down from this time last year, we’re out of the woods. Obviously our habits continue to have potentially dangerous repercussions both in our personal lives and in our economy as a whole, but people are definitely thinking about spending less and are more mindful of their finances. And I would say that’s a net gain!

Dating During A Recession

Dr. Bonnie Eaker Weil — Sat, 08 Aug 2009 02:00:30 +0000

It turns out economic hardship spawns more than “staycations” and at-home cocktail parties. It also has caused a boost in first dates. It seems that this type of uncertainty makes many of us desire companionship and support more than ever.

Searching For Healthy Relationships

According to MSNBC, some singles are now hunting for dates with the same fervor others are showing hunting for jobs. On matchmaking Web site eHarmony.com, membership is up 20 percent despite monthly fees of up to $60, and activity has soared 50 percent since September at OkCupid.com. If money talks, we’re saying that we are looking to quell the loneliness that’s all too common when chasing careers, financial security, our ideal life. When those things are called into question, we go back to seeking good ol’ fashioned relationships.

This should come as no surprise, as most of us have this inherent desire, but it can be played out in a negative way if we’re not careful through what I call the bio-chemical craving for connection. I discuss this more in my book, Make up Don’t Breakup – which encourages a healthy view of money both within our selves and with our partners. This craving starts when stress from childhood causes thrill-seeking behavior. This behavior can be in the form of financial or sexual conquests and infidelities. You’re looking for ways to self-medicate and to help calm stress levels down. Of course, this craving can be harnessed for good as well as evil! Instead of allowing the desire for companionship and intimacy take you to thrill-seeking behavior that results in a “high” and then a crash, turn the desire into a search for healthy relationships.

A Genuine Relationship

This can come through online matchmaking, saying “hi” to that person we always see in a coffee shop or through a simple friendship. But you don’t need me to tell you how to meet people! The point is, as the MSNBC article states, it’s not just the frequency of our dates that’s changing — it’s also the people we’re choosing to spend time with.

“They’re looking for something that’s genuine in a world that isn’t very secure,” said Bathsheba Birman, co-founder of the Chicago dating event Nerds at Heart. “ith headlines full of why you can’t trust established institutions that you thought you could … people are re-examining their own values.”

And seeking a steady relationship can actually result in SAVING money! The CEO at OKCupik figures a man can spend $100 buying drinks at a bar trying to pick up a stranger and leave with little more than a cold shoulder. But, when he’s in a relationship, a Saturday evening can be as simple as Thai noodle takeout and a movie rental.

So here’s to healthy relationships and sustainable finances!

Inflated Economy And Our Relationships

Dr. Bonnie Eaker Weil — Tue, 04 Aug 2009 03:30:43 +0000

USA Today reports that post-recession, the industries that “fell hardest may see a big rebound.” But how far away are we from this rebound – and are we ready?

There’s no denying this could be a much-needed boon for our economy. Recreational spending is down across the board but it has also forced couples in relationships to put off some big ticket items – things they may actually need – until things pick back up. These “pent up purchases” – whether necessary or not – are starting to be acted upon and may provide the necessary fuel to bring the economy out of the doldrums.

Economists are disagreeing about how much pent-up purchasing power exists and when it will be unleashed on the much-needed economy.

According to USA Today:

May’s retail sales, out Thursday, were worse than expected, and consumer spending is expected to remain weak this quarter and next, IHS Global Insight chief economist Brian Bethune says. And that’s despite the fact that consumer confidence is growing — up strongly last month, according to the Conference Board’s consumer confidence index.

The Effect Of A Rising Economy On Your Relationship

But are we – as individuals, couples, families – ready to be the ones that will spur the economy on? As Americans, we want what we want, when we want it, so it’s understandable that we’re getting tired of drastically limiting their spending, waiting for huge deals or opting for lower-priced off-label brands according to a recent survey.

There’s hope on the horizon that this refusal to compromise (or perhaps what some would call selfishness!) could be the ticket out of the economic downturn. On the other hand, I believe this tightening of our belts has forced many of us to re-focus on what’s most important to us. There will no doubt eventually be a bounce-back, but is now a realistic time to hope for one? All the financial limits mentioned above are stressful, it’s true, but if we learned one thing from the past months it should be that overextending ourselves – as a nation as a whole and as individual households – is even MORE stressful in the long run.

Learning From The Economy

While the idea of “pent up purchasing” may be not far off on the horizon, many of us still are and will continue to feel the effects of the financial fallout.

In every downturn since World War II, one economist says, “The sharper the recession, the sharper the recovery. In virtually every case, forecasters underestimated how strong it would be. I think it was a product of pent-up demand.”

No matter if you decide to contribute to the economy by, say, buying that washing machine, or if the belt-tightening must continue, don’t forget the positive lessons that are to be learned from what we as a country have experienced over the past six months or so.

Angry Spending: The Next Wave

Dr. Bonnie Eaker Weil — Sat, 18 Jul 2009 01:00:20 +0000

Are American consumers so angry they are spending recklessly, disregarding their budget or agreement with their spouse? Last week, I mentioned a study which stated that almost 80% of women are inclined to spend themselves out of misery and would go on a spending spree to cheer up, concluding that some women use shopping as an emotional regulator. Ironically this means that worrying about money can lead to spending more, which doesn’t bode well for many people who have had to cut back due to the recession.

Spending Addiction?

In regards to these patterns that are emerging out of our national – and personal! – financial crisis, I coined a new phrase: “Pent up Purchase!” This is similar to a phenomenon I’ve been studying in my practice for years – what I call a “POP shot,” or a “pissed off purchase.” These types of spending obviously aren’t healthy and when we participate in them, we’re playing off of part of the grieving process. Out of denial and anger, Americans have awakened to a new emotional response to the economic collapse. Our brain chemistry is negatively impacted when we suffer adversity. Our addiction to spending to get that “high” is a common response to spur dopamine production (feel good hormones). Because of this, the economic downturn we’re experiencing is a set-up for irresponsible spending, and an unhealthy replacement for emotional intimacy.

An Affair With Money

This leads to what I call the “money mistress” which can then give way to financial infidelity. This can be every bit as destructive and painful and a sexual affair (in fact, sometimes the two are intertwined!). A “pissed off purchase,” “money mistress” and “financial infidelity” all occur when you engage in reckless spending – whether that be spending over budget, spending behind your partner’s back, or spending as a way to avoid grief and as a type of self-medication.

I’m not trying to be alarmist and draw the conclusion that buying a pair of shoes to make yourself feel better is only one step away from financial infidelity. I’m merely suggesting that the two can lead to each other, and in a climate where everyone is over-stressed, over-worried and more on-edge than normal, these types of behaviors can heighten the likelihood that you will engage in more destructive patterns.

Breaking The Cycle

There’s no denying relationships are stressed right now, and just as we must be more financially vigilant and dedicated on a personal level, so we must be with our significant other. And it’s not just about money. Take some time to de-stress, relationally by spending time with each other in an attempt to take the pressure off of the worry that may be encroaching on your financial life.

It may seem like a vicious cycle: more stress=more tendency to spend=more stress. But doing things to remove stress from your life WITHOUT spending money will help break the cycle!

4 Financial Steps Towards Being More Relationship Attractive!

Greg Halpen — Sun, 07 Jun 2009 23:00:13 +0000

Are you one of those guys who think that everything will fall into place once you meet Mr. Wonderful? You know what I’m talking about. Your life will be absolutely perfect when you meet the “ONE”? The financial debt you’ve acquired will disappear. Your savings account will magically sprout a money tree and your life’s vision will become so crystal clear, you’ll wonder why you didn’t meet Mr. Wonderful sooner.

What Does Money Have To Do With Great Relationships?

Believe me, I am not one to burst bubbles, but I am the kind of person who loves supporting people in their dreams, creative processes and imaginations. However, when it comes to being Date Smart and Relationship Ready, there’s one MAJOR piece that needs to be in place in order for Relationship Success to happen. And I’m talking about blissful, easy-going love relationships.

There is nothing like an empty wallet and creditors hounding you while you’re trying meet Mr. Wonderful. Also, wouldn’t it be great if you could finally be where you’ve always dreamed of being when it comes to finances and relationships? I’m not saying LOVE can’t happen during financial crisis; what I am saying is, if you want to end the cycle of bad dating and relationships, foreclose on never having money troubles in a relationship, then you will do what it takes to get debt free and financially sound. Here are 4 Financial Steps that will make you more Relationship Attractive.

4 Easy Steps To Becoming Financially Secure And Relationship Attractive

1. Fatten the PIG! Start an FDIC insured ING Direct on-line savings account. This is a FABULOUS way to have a small portion of your paycheck automatically delivered to your ING account earning a 1.50% APY. I have to say the greatest mind trick with ING is, while your money is being safely stored away and earning interest, you kind of forget it’s there and withdrawing the money takes a few days. So, you will less likely be enticed to spend it!

2. Stop the stinking thinking! There is a belief out there that says you are suppose to have money troubles in relationships and it’s all part of the process of relationship building. Yeah, it’s semi- true, but haven’t you suffered enough and wouldn’t you just love, for once in your life, to have things work out the way you envision them? I always say, build a solid foundation and if things go off course, like sudden money problems, you’ll have the tools and support to get you through it quicker. So, get your money mind-set in order, because that is one smart start to becoming relationship attractive.

3. Where’s that shredder? How many credit cards do you have? Can you transfer balances to one with a lower interest rate? Go for it and then SHRED the rest! You only need one and besides I learned that it’s smarter to have one card for travel or emergencies and pay cash for everything else. If you’re not ready to do this, take a little time to ponder over whether or not it’s worth paying interest or even high interest for goods and services.

4. Get advice! Put your money where it matters. Hire a professional coach to take you through what you need to do to get back on track with your finances. This is a VERY sexy relationship attractive step. It shows you want to start building a solid relationship with money, and that in itself, is a beautiful thing.

Now that you have 4 directions to go, choose one and see it to completion before going to the next. Little by little you will see the changes and before you know it, you are back on track with your finances and opening more space to let Mr. Wonderful in.

Why Guys Get A Bad Rap

Dr. Bonnie Eaker Weil — Mon, 09 Mar 2009 19:22:11 +0000

In the 21st century, with more and more women are out-earning their peers, and even sometimes their partners, things are changing for men as well.

According to a recent survey of men – broken down into five sections: Lifestyle, Dating, Sexuality, Power & Money and Men in 2008 – more and more men are also breaking out of what could be considered traditional “gender roles.” Whether that means they are supporting the women in their lives, taking on more domestic roles, or becoming more monogamous, the survey debunked many of the standard stereotypes to show that the modern man is one driven by a sense of values, loyalty and family.

The Numbers Might Surprise You

* 60% of men are nostalgic for the days when a handshake in business meant something
* 77% of men look for girlfriends with “wife potential”
* 69% of men would never cheat on their partner
* 57% of men cook at home and enjoying doing it
* 56% of men said that being a good father or husband makes a man “manly”
• 61% of men feel that no commercial depictions of the male gender are accurate ones

Of course there are no doubt still men who fall outside these percentages. The survey talked to women, too, to get their take on similar subjects and found a number of interesting things: 20% of women admitted to having had more than 15 sex partners, while only 17% of the male respondents said have had more than 15 partners.

By contrast, when women decide to “settle down” with someone, they tend to be more satisfied with that person and with their sex life. Thirty-four percent of females respondents said they would not change a thing about their lovers, while only 17% of men said the same. Additionally, 23% of female respondents are completely satisfied with their sex lives, versus only 14% of males.

Honesty And Finances

The survey definitely went a ways towards helping to debunk some myths about both genders and how they perceive themselves and their relationship. If we can be this open and honest in the context of a survey, we should practice that kind of honesty in our relationships, especially where money is concerned, as finances can be a huge source of strife for couples.

Many of the percentages expressed in the above scenarios also have a monetary component to them, and it’s important to talk about that component as well, since it often creates underlying issues. Learning to talk about money can be a difficult experience for some. But the social taboos around finances tend to be falling away, too and this can be a good thing when it comes to discussing your financial future with someone. Start early on in the dating process and get to know each others’ views and priorities.

Illusions And Magical Thinking In A Financial World

Dr. Bonnie Eaker Weil — Fri, 06 Mar 2009 19:58:16 +0000

I’ve noticed a lot more people playing the lottery recently. Maybe they figure now is the time they’d need the win most, or because things are so bad economically they haven’t got anything to lose. Aside from the fact that playing the lottery can simply be an irresponsible financial decision, in some cases there’s more that comes into play. These people may be prone to magical thinking.

What Is Magical Thinking When It Comes Your Finances?

As I mention in my book, Financial Infidelity, when it comes to money, most adults pride themselves on their practical approach to handling their own finances. But when it comes to cooperatively managing shared resources in an intimate relationship, I have seen even the most savvy financial managers—individuals who handle negotiations, investments, and expenditures of huge sums of money in their careers—engage in magical thinking, rather than initiate discussions about money with their
partners.

Some questions to ask yourself in order to reveal this type of thinking are:

• Are you a gambler?
• Do you expect to win if you buy a lottery ticket?
• Do you believe it’s just as easy to find a rich spouse as a poor spouse?
• Do you believe you can influence your financial situation, or do you think that things
will eventually “just work out”?
• Do you avoid discussions about money?
• Do you feel financially secure, even if you don’t have money put away?

Don’t Turn A Blind Eye To A Financial Crisis

There are no “magical solutions.” In other words, you likely won’t win the lottery, and even if you do, you haven’t changed any behaviors, you’ve just added more money into the equation. Turning a blind eye to a financial crisis won’t make things better. Putting off planning for the future doesn’t REALLY make for less work in the short-run.

Many people engage in these types of magical thinking patterns because they’re afraid to rock the boat with their partner – and as we all know, issues of money lend themselves to being rocky! At some point or another, most people have been guilty of magical thinking, but in most cases, they can navigate through the temptations to think things will just “get better” by talking with their partner and discussing fears and finances. They realize that heated discussions, arguments, even passionate fights are part of the process of negotiating the differences between two individuals. They are able to set aside the fear of abandonment and be courageous instead of comfortable, proactive instead of defensive.

If you find yourself prone to magical thinking – planning to win the lottery or hoping your financial issues will just work themselves out – it’s crucial for your own mental and financial well-being that you break down barriers of communication and talk about these issues. It may not be comfortable at first, but this is one “magic spell” that needs to be broken!

How To Manage Money Issues in a Loving Relationship

Laurie Weiss — Sat, 08 Nov 2008 15:30:20 +0000

When "money" is a couple’s issue, is there any way to get past it and still have a loving and supportive relationship, especially if every other aspect of the relationship is strong and loving other than the ways of looking at money (particularly in tough times)?

This money question from Jenny describes a problem many couples face. Money issues can be especially intense because money discussions are usually about much more than just money.

When Money Becomes an Issue

In tough times the money issue comes up because it represents a very basic need—security. When you feel threatened your normal rational way of functioning often becomes very primitive.

Your basic emotional instincts take over without their normal restraint. Therefore, the number one rule is to NOT discuss money when you are scared about not getting what you need. It’s very hard to be rational when you’re afraid and you can’t solve anything when you feel that way.

What You Can Do Differently

A couple of things you can do differently is to have some money talks when you’re feeling calm and connected. You can try these questions to stimulate a different kind of conversation. They’re based on Transactional Analysis (TA), a system for understanding, predicting and changing behavior that was developed in the 60’s.

TA explains that you act in at least 3 distinctly different ways. One, your Child Ego State is emotional. Another, your Parent Ego State is driven by and expresses rules you believe are necessary and important. The third, your Adult Ego State operates rationally and makes assessments and predictions based on information.

In computer terms, you can open any of three different programs and use them to address the problem. Some programs provide answers that are more practical than others, but each program gives you a “correct” answer based on it’s own system.

Questions to Ask

These questions are designed to discover the answers those six different programs the two of you are coming up with about money issues. Once you can see how complex this information really is, you can begin to sort it out instead of just arguing about it.

How would each of your parents tell you to solve the problem? Include step-parents or any other important parent figure as well. (Parent rules)

What would each of your parents do (have done) if they needed to solve this problem themselves? (Parent models that may become rules for you)

What would you do if you could do exactly what you want to do and nobody was watching and you didn’t have to answer to anybody about what you did? (Your own Child)

What are your resources and what are your options? You have this information when you stop to think about it. (Your Adult)

What’s Next?

…

The Brain/Credit Card Connection and Your Relationship

Dr. Bonnie Eaker Weil — Mon, 13 Oct 2008 16:33:10 +0000

You are likely carrying around an emotional connection, and therefore, baggage, you didn’t even know you had. It’s a connection between your brain and your credit card debt; between your thoughts and feelings and why and how you spend money. It helps explain your views on money and debt and why you react to these things in certain ways.

Knowing about these connections and your money patterns won’t excuse you from financial problems you might face, but you can help nip these problems, and any repercussions they might have, in the bud.

I call these brain/money connections the Biochemical Craving for Connection.” It starts when stress causes thrill-seeking behavior. The stress can be linked as far back as childhood but can also be due to recent pain or emotional distress.

The thrill-seeking behavior can be in the form of financial or sexual conquests and infidelities.

You’re looking for ways to self-medicate and to help calm stress levels down. At the same time, these indiscretions give you another kind of high and the cycle starts: Give into sexual or financial pressure to help relieve stress, feel a “high” for a moment, then return to stressful feelings about the situation. Eventually, the only thing that can help your problem is the problem itself!

Areas in the Brain That Communicate With Each Other

There are several areas in the brain that communicate with each other to influence emotion. When it comes to dealing with extreme behaviors such as addiction, infidelity and poor decision making, these areas may be involved:

*The limbic system is made up of several structures that work together to control emotion, hormonal secretions, moods and pain/pleasure reflexes.

*The hippocampus is a structure within the limbic system and plays a role in emotion. If this area is damaged, it can reduce your ability to distinguish safe and dangerous situation, leading you to seek out situations that may FEEL safe, but in reality, aren’t. Things like sexual affairs or financial infidelity.

*The ventral striatum and the nucleus accumbens help process satisfaction and happiness. These areas are also associated with assessing risk reward and gratification. When these areas aren’t functioning properly, people may get involved with addictive behaviors leading to things like gambling, affairs, etc., in order to stimulate pleasure responses.

For people struggling with things like debt and/or financial infidelity, it’s helpful to figure out if these areas of the brain are coming into play. It’s also helpful to figure out what types of stressors may have triggered the Biochemical Craving for Connection in the first place so you can deal with the root cause.