Why Do I Do That With My Money?

Ever wonder what causes you to fight with your spouse about finances, or to envy your neighbor's newer car and bigger house? Dr. Joy Lere, a licensed clinical psychologist and co-founder of Shaping Wealth, is here to break down the "why" behind our behaviors and issues surrounding money.

You can find more episodes of Common Cents on the Prairie™ on Apple Podcasts, Spotify, YouTube, Google Podcasts, Amazon Music, and on our website.

Watch every episode on YouTube, and subscribe to First National Bank's channel!
Follow First National Bank on Facebook
Follow First National Bank on Instagram
Follow First National Bank on TikTok
Follow First National Bank on Twitter

Transcript

0:00

- So, does everyone fight about money?[upbeat music] Welcome to "Common Cents on the Prairie," a podcast dedicated to helping you demystify the sometimes complex topic of money. I'm Adam Cox, head of Wealth Management for The First National Bank in Sioux Falls. We're a community bank based out of South Dakota. In this podcast, we share expert insights from around the country and stories from our local community to arm you with the tools you need to make better financial decisions. Because the truth is, the more we talk about this stuff, the better off we're all going to be.[upbeat music] When we started this show nearly four years ago, I never would've imagined how much of an impact our conversations with people about how they handle money would have. Those conversations are always our most popular, and I think it's because people can relate to them. Maybe they have experienced something similar, or maybe they can just see themselves in those conversations. Either way, if you're a fan of those episodes like I am, you are in luck. We have a lot more "How We Money" episodes in the pipeline. This episode is an extension of those conversations. Today I'm interviewing Dr. Joy Lere. Joy is a leading industry voice in the psychology of money. As a licensed clinical psychologist and the co-founder of Shaping Wealth, Joy masterfully weaves her expertise in human behavior with a deep understanding of the way people experience money - bringing a new and necessary perspective on financial decision making to advisors and the clients that they serve. Joy has held research in clinical positions at Penn Medicine, Princeton Health, Children's National Medical Center, and the Department of Defense. And she has served as an assistant clinical professor in clinical psychology at George Washington University. So, if you've ever wondered,"Why do I do that with money?" Or, "Why can't we just talk about money like normal human beings instead of fighting about it?" This episode is for you. I hope you enjoy my conversation with Joy Lere. Joy, welcome to the show, thanks so much for joining me.- Thank you, it's great to be here with you.- All right, I am so excited about this episode for a couple reasons. The first is you are a total rockstar. I've heard you speak, I've seen some of the content you've done. It's absolutely fantastic and I am really, really excited to bring your expertise to our audience. So thank you so much for joining me. Secondly, it has to do with the arc of this show. So one of the interesting things, we started the show about four years ago, and when I started I thought I was going to talk about all the things personal finance people talk about like Roth conversions and dollar cost averaging and taxes and things like that. And we do, we do talk about some of that stuff, but we had this interesting moment early on where I wasn't feeling very inspired. It felt like a lot of work. And my wife actually said,"You know, you might enjoy this a little bit more if you stopped reading the episodes and stopped being so scripted and just spoke from the heart." So I said, "Great suggestion. Why don't you come on the show and help me?" So she came on the show, and what we did was we talked about our money story. We talked about how we were raised with money, the impact our parents had on us, all the debt that I had that I brought into our marriage and the impact that that's made. And that episode for whatever reason really touched a nerve, and then I started talking to more people, more couples, more individuals about money. And it's really created these fantastic conversations. But during those episodes, and this is why you're here, is I am not trained to spot or identify the issues that we all have as individuals with money. And so, I'm excited for you to be able to help us figure out like why do we do these things with money and maybe maybe start naming some of these things so we can have better conversations and just enjoy our lives with money a little bit more. So, does that sound fair to you?- That sounds fabulous, I can't wait.- Good, well, you're not going to get off the hook completely when it comes to personal information. So I want to start with this question, if you wouldn't mind sharing. Can you tell us a little bit about what it was like for you with money growing up and any experiences or lessons that you learned along the way?- Well, something I often will ask clients to reflect on is what is one of your earliest memories of money? And so I need to be able to turn the table and do the same kind of work myself. So I grew up on a farm in west-central Minnesota. As a child my parents were, it was a family farm. And something that was instilled in me very early on that I've carried forward is just how important and impactful giving is, not only for the people you're giving to but also what that experience provides you as a giver. And I see early on it was framed to me as, giving is also a discipline and a practice. And it's not something that you make a decision about, it's just something you do. So my earliest memory of money is I would have, I would get an allowance each week and it was equally split between I Can't Believe It's Not Butter margarine containers that we would get from my grandma, the little yellow ones. And my mom had masking tape and she wrote on one spend, save, and give. So every Sunday I'm taking the quarter out of the give container, putting it in my little black purse, and bringing it to church. So, early on there was just no question in my mind. It doesn't matter how much or how little you have, you've been entrusted with something to use and leverage to look outside of yourself and contribute and improve the lives of others.- Oh, that's a fantastic money memory. You know, whenever I ask that question to people, most of them go to something really negative. So kudos to your family for bucking that trend. So that's awesome. Thank you so much for sharing that. All right, let's talk about money stress, Joy. Money continues to be one of the biggest stresses that we all experience in our lives. And in the context of relationships, money in marriage, it's a really big thing and it continues to be one of the leading causes of divorce. So, Joy, why do you think that is? What is it about money that makes us so stressed out?- Money is so emotional, and I think it is because on some level it is tied to our survival. And when something is tied to survival, that can produce anxiety. But also, money is linked to so many more complex, complicated issues in our lives. When people are talking about their money, they're not just talking about what's happening in their bank account; they are talking about their sense of security, trust, power, control, identity, fairness in a relationship. They may be talking about resentment, contribution. And so I think we need to understand that there are different layers and different things that are being talked about and maybe signaled when people are speaking about their money. And I think it's particularly challenging for couples because I explain to people that when two people enter a committed partnership, it's not just two individuals coming together. There are two financial families merging. And whatever our experiences are in our family of origin with money, they kind of become our baseline, our benchmark. So those attitudes, the beliefs, the expectations, the behaviors that we observe and experience early on, we think, well, that's just how people do money. Now, it's very rare that two people then are coming together in adult life with identical, pulling around identical pieces of emotional baggage from whatever their earliest money experiences are. So that can really create a clash as people come together and are like, wait, you're doing that different than me. And, you know, a lot of times when there's differences, our financial behavior, it's, again, what's underneath. Usually there's a need. There's a value that drives the decision. And those things are going to be different based on two different individuals, personalities, experiences, and ultimately their goals.- Well, we could do about 15 episodes on the things that you just talked about there. So there's a lot to unpack, but I want to go here; you talked about merging families and experiences. And this is something, so I always call that our money history, probably the wrong phrase. I don't know, again, I'm not trained in this stuff, but I'll use myself as an example because I think I resonate with other people. So when Diane and I got married, we were call it 25, she was 25, I was 24, because she's older. She'll love that I said that. And what we did was we talked about money, certainly, but call it 25 years of our lives we spent apart. And those 25 years are often our most formative years in our lives. And so all the experiences that we had growing up with money, the conversations we had around a kitchen table or the conversations we didn't have with our families and parents and all that baggage, we bring all of that into relationships. And for a lot of people that can be a big, big challenge. So, Joy, can you talk about the importance of our money histories, and how do we start that process of talking about that stuff?- I think it is important, self-awareness is so critical when it comes to working, creating the life that we ultimately want to have for ourself, but also working well in our relationships with other people. We need to understand what we bring to the table. Why are we triggered by certain things? Why are certain things important to us? So really stepping back and examining and asking yourself questions about, okay, how is it that I've come to believe some of the things I believe? Sometimes we'll give people kind of financial fill in the blanks, almost mad libs like wealthy people are, debt is, talking about money feels. And then when we understand, okay, what is my gut reaction to that? Then we want to interrogate, well, why is that? How did I come to believe that? Because then we can start to contextualize these beliefs and attitudes that's in some ways we've maybe just automatically adopted without really thinking and stepping back and asking ourselves, is this still true for me? Does this match my current circumstances? Is this working well for me? So you want to start by understanding your own relationship with money, and then being curious about those same things with your partner, particularly if they are making some choices that you have a negative reaction to or create conflict or you don't agree with. Instead of attacking, we really want to come at it with curiosity. Because here's the thing, I think especially with financial behavior, most people by and large are not trying to move through the world trying to make people around them mad and trying to blow up their lives. Like that's usually not our ultimate goal when we roll out of bed, no. Humans, we are all wired for survival. So a lot of our behavior as people is pretty patterned. So patterns are set into motion early on because at some point, in some way, in some context, there was maybe something adaptive about doing that, but that maybe doesn't necessarily serve us. And to the outside world it may look, I really don't appreciate the way that the financial industry sometimes throws around this word "irrational," but it may not make sense on the surface. But we need to be engaging with people that we're struggling to understand with empathy. And I think a really important question, a powerful question you can ask yourself is, okay, what would need to be true for that behavior to make sense? And I think just asking someone, can you help me understand, can be really disarming because then it doesn't become an attack. And I think especially when we're talking about contentious financial conversations between couples, it can be a lot of finger pointing. But when we can start to speak from our own experience and then have respectful curiosity with some higher level conversational skills with the people we are engaged in relationship with, it can go a long way to build bridges.- Yeah, so I'm trying to think about how that would work in practice. And this is assuming people haven't been triggered and they're not in the middle of going through a budget and they are fighting already. Is maybe a good way to approach conversations about money - because a lot of people don't grow up having healthy conversations about money. They're not trained to do this. This is not something that we're taught. So, is a more productive approach, Joy, maybe to say, okay, here's what I have learned about money, here's what I've believed, or here's how we handled money in our family, and I just want to tell you that story. And some of the things that caused me anxiety or stress about money, I just want to get all that out on the table. And then ask your significant other to do the same. Would that be a good way to start to have more healthy conversations about this stuff?- Absolutely, I think that's a beautiful way to do it. And you may hear and find out some things about someone that you never knew or understood. And I think it's also really important to just check in about, okay, where are we at financially and how are you feeling about that? What is working for us? What can we do differently? Touching base about your fears. And then I think there's also something really powerful about rallying around agreed-upon, mutual common goals. And goals can be in some ways somewhat problematic because of how we treat our future selves, but we want to be headed in some direction. So getting on the same page and thinking about, okay, what can we be doing to make progress toward however we are defining, kind of flourishing financially looks like for us?- I think our industry, our profession is headed in the right direction with these conversations and goals. And I even think back a few years ago and the idea of starting a client engagement or a new relationship by saying, all right, what are your goals? That that could elicit some eye rolls.- Yeah.- What we used to do was just immediately jump into a risk tolerance questionnaire and say, how do you feel about risk? But we didn't have the conversation to say, what are you working towards? And without that conversation, without a couple, in this instance, knowing what they're working towards, it makes it really difficult for us to do our job. And it's also when we do get to learn our client's goals, those can be grounding, and we can always bring people back to say, they say, all right, I'm thinking about doing this or I'm not sure my investment returns are where I want it to be to meet my goals. You can always go back to those things which I think is really, really healthy. I think we have a long way to go to be able to have those conversations as a profession in a more healthy way but I think we're on the right track.- I like to ask people about what matters to you and have them paint a vivid picture of that. You know, one of my colleagues, Brian Portnoy, developed this concept that I love called funding contentment. And that's, how do you underwrite a life that is meaningful to you? Because the world gives us all kinds of plants, all kinds of seeds, of pictures and ideas of what it means to be financially successful. But at the end of the day, you are the person who has to live with the natural consequences of your life. And what is going to be meaningful and satisfying and fulfilling for me is going to be different for other people. So it's important for a couple to understand, what is their shared picture that they want to paint? And you're right, going in asking someone, what are your goals? Like, I don't know. Some people have a really hard time starting with that. And when someone is really wrestling with really getting specific about a goal, I'd like to start in a different direction. Let's start with an anti goal. Tell me what you don't want. Let's paint a picture of that and then reverse engineer what needs to happen to avoid some of those things. And you brought up risk tolerance questionnaires which as a psychologist I think are incredibly problematic. And especially when it comes to this idea of financial risk, because we can fill out a spreadsheet or answer some questions online all the live-long day, but what we are imagining is often very different than how something feels or what we are doing in the heat of the moment when faced with an actual threat. I think sometimes some of the assessments that are used, they are may be looking more at traits of a personality, and, you know, we're humans. We want to be able to predict, what is someone going to do? How are they going to react so that I can then provide them with a solution and be helpful? But I think sometimes where we go off the rails, it's not just our traits, it's what is our reaction when we are in a certain state. And I don't think there's enough conversations about each of those things.- You brought up something in there that I think impacts our happiness a lot, and I think it's certainly a conversation Diane and I have a lot, I think a lot of couples do. And I've heard you talk about this before. So, while I have you I'm going to take advantage of this time. Let's talk a little bit about keeping up with the Joneses. So, Diane and I go for a walk almost every night that we can. And we go around and we see the cars, the big homes, and things like that. And you just can't help but think, like, what does everybody do? Like, is everybody doing really well? And that can, I think, even if you know what's going on- and I'm in this industry, I know the reality of a lot of people's finances and spending patterns and all those sorts of things. But I think it can happen to all of us. So do you have any advice on, well first of all, how prevalent is it that we are all impacted by keeping up with the Joneses? And then, do you have any advice on how to help us tune out that noise, particularly in our relationships?- Absolutely. I think we are all susceptible to it, and the nature of social media where everyone else's very curated, edited highlight reel is in our face all the time. It's there, so in some ways comparison is inevitable, but we must remember that we are constantly comparing our private lives, our private messes, our pain, to a very narrow curated picture of other people's public persona. And people on social media are performing for one another. And even when you were walking through the neighborhood, walking by the white picket fences, you don't know what's going on behind closed doors. And I tell people I have one of the best jobs in the world as a clinical psychologist. I really believe that. People entrust me with their stories and it is an honor and a privilege. And I get to hear and engage in conversations with people that they are not having with anyone else in their life. I worked with some very accomplished, successful individuals. People you see on the nightly news, people who you read about in newspapers. And on the outside they have what most people are telling themselves, well, that's what I want, that's what I'm working for. But trust me, time and time again, I get to hear the messiness behind what the rest of the world sees. At the end of the day, we are all more human than anything else. I work with a lot of families. There's not a single family that doesn't have its own dramas and challenges and stuff. So I think when we are playing that comparison game, we need to remind ourself, wait, I'm comparing my whole picture to one snapshot so I'm not being fair to myself. I think when we play that comparison game, it's like we almost want to cherry pick. Well, I want that from there. I want that house, I want that boat, I want their truck. I want that vacation in Italy for the whole month of August. Well, do you want their marriage that is falling apart, their broken relationship with their children because they have spent so much time at work? Do you want their stomach ulcers and their panic attacks because they are so stressed out and burned out by their job because they are a slave to their mortgage? So those are all things we really need to hold in mind when we're playing the comparison game.- Oh, that's so good. You know, we often think about money stress just as fights, like that's the most obvious answer. But money stress shows up in so many other places in our lives and in our relationships and I'm getting to an age now, so I'm 42, where people are starting to kind of take a harder look at their lives and they're starting to think about their careers and how much they actually love their life. And for a lot of people, their stress comes from the fact they can't make a change, because they have to pay the mortgage, they have to pay off the boat, they have to do the vacations, they're on the treadmill and they can't imagine getting off. So it's a very, very big stress even if people aren't fighting about it.- I would come back and push a little bit and challenge a bit. So often we confuse can't and choose not to. So it is crucial that we all own our choices. And if we are unsatisfied or we are unhappy, even if we're feeling a bit of envy, we can use that envy to tell us what's important to us. To think about, okay, what are changes I need to make to have what I see someone else have that maybe I wish I could give myself permission to have? But I think when we're like, well, I just can't, that's seeding control. We need to connect to a sense of agency. So we need to separate the factors in our life that we do and don't control, because we spend a lot of time and energy spinning about things that there's nothing we can do anything about, including the past and including other people's behavior.- Have you been reading my diary?- Yours and everyone else's.- Yeah.- I'm taking a page from my own.- Yes.- But we really need to take ownership of that. And I think when we remind ourselves, no, wait, I'm choosing this, it's an important shift.- What you were talking about there with families

kind of reminded me of a little joke: 26:37

if you think your family doesn't have a black sheep, it's you. But the other thing is you talked about looking into other people's lives and kind of seeing what they put out there. I think a common misconception is that people who make a lot of money or people who have a lot of money don't have any money stress. Do you think that's true?- I know for a fact that it is absolutely false. Some of the wealthiest people in this country are incredibly financially anxious. And people mistakenly think having more money is going to change my feelings about it. No. For some people, more money just means different sets of problems. So when we play this very, very dangerous when-then game, we're often disappointed because we get to the then and if the when is some kind of number or a different position or a job, that's not going to eliminate everything that is a source of stress.- And it's true, it just creates different stress. Let's leave, here. So I want to reflect back on a conversation I had recently with a couple of friends and get your input on it. They were talking about, they are working through a process of getting on the same page financially. And something that they told me really stuck with me. They said that while these conversations have been difficult at times, what's happened is they have a greater sense of intimacy in their relationship having worked through this process to get on the same page financially. Why do you think that is?- I think money is one of the most intimate topics in our lives. People would rather, even in therapy, talk to me about sex or death than talk to me about their salary.- Sure.- So when you are sharing that fully with someone, you are very exposed, you are fully known.- Yeah.- And in terms of it bringing someone closer together, like money is, it's complicated for all of us. But when you have two people who can do a hard thing together, that is going to form a deepened bond and it's going to deepen trust as well.- Love that. Let's leave it there. Joy, you are a treasure. If people want to learn more about what you're doing and how you may be able to help, where should they go?- Absolutely. Well, there are a few places on the web. So I am the co-founder of a platform that does a lot of work with advisors in the wealth management industry called Shaping Wealth. So if you are interested in financial psychology, check out some of the work and content we have there at shapingwealth.com. My private practice website is my name, J-O-Y-L-E-R-E.com. I also spend some time occasionally on Twitter. My handle is my name, J-O-Y-L-E-R-E, and then my degree, PsyD. I'm also on LinkedIn, @JoyLerePsyD.- Awesome. Well, kudos to you for remembering all those things first of all, I wouldn't have made it past LinkedIn. Thank you so much for being on the show. We'll have all of those links in the show notes, and I really appreciate you being on.- Absolutely, thanks for having me.- Thanks, Joy.- Bye-bye.- [Adam] I hope you found this helpful. If you did, please subscribe and share with your family or friends. If you have a topic you want us to cover in future episodes, send us a note through our website. And if you're at the point where you want an expert opinion on your finances, reach out and we'd be happy to start a conversation. And remember, any comments, insights, or strategies discussed on this podcast are intended to be general in nature and therefore may not be suitable for you and your situation, whatever that may be. Before acting on anything we discuss, please consult with your attorney, CPA, and/or your financial advisor.