Money is personal. And we have a lot of feelings about it. How could we not? Our financial situations directly affect our lifestyles, health and even our self-worth. On top of that, our financial situations as children can change the way we deal with money later in life, leading us to avoid opening bills, overspend or take unnecessary risks.
So, how can you improve your relationship with money and build good habits? Lianne Hannaway (BMath '02, MAcc '02) joins the podcast to explore the personal side of money and offer insights that will help you parse through your relationship with your finances.
Lianne is a Chartered Professional Accountant, finance executive, investor, financial podcast host, and the founder of Wealthnuvo, a financial education and coaching platform for women building generational wealth. Lianne's mission is to help women, especially Black women, reach their financial goals and live better.
Listen to Lianne's podcast: https://open.spotify.com/show/0yVYV99VdahDIjJ3chw34S
Learn more from Lianne: https://www.liannehannaway.com/
Money is personal. And we have a lot of feelings about it. How could we not? Our financial situations directly affect our lifestyles, health and even our self-worth. On top of that, our financial situations as children can change the way we deal with money later in life, leading us to avoid opening bills, overspend or take unnecessary risks.
So, how can you improve your relationship with money and build good habits? Lianne Hannaway (BMath '02, MAcc '02) joins the podcast to explore the personal side of money and offer insights that will help you parse through your relationship with your finances.
Lianne is a Chartered Professional Accountant, finance executive, investor, financial podcast host, and the founder of Wealthnuvo, a financial education and coaching platform for women building generational wealth. Lianne's mission is to help women, especially Black women, reach their financial goals and live better.
Listen to Lianne's podcast: https://open.spotify.com/show/0yVYV99VdahDIjJ3chw34S
Learn more from Lianne: https://www.liannehannaway.com/
Money is personal and we have a lot of feelings about it. How could we not? Our financial situations directly affect our lifestyles, health and even our self-worth. On top of that, our financial situations as children can change the way we deal with our money later in life, leading us to avoid opening bills, overspend or take unnecessary risks. So how can you improve your relationship with money and build good habits? Lianne Hannaway joins the podcast to explore the personal side of money and offers insights that will help you parse through your relationship with your finances. Leanne is a chartered professional accountant, finance executive, investor, financial podcast host and the founder of Wealth Nouveau, a financial education and coaching platform for women building generational wealth. Lianne's mission is to help women, especially black women, reach their financial goals and live better. Lianne, thank you so much for joining the podcast today.
Lianne:Thank you so much for having me. I'm really excited to be here and to talk about a great topic money.
Meg:Yeah, money and the personal side of money, which I feel like we don't talk about enough. And, like I said in the intro, your approach to money management really comes from a personal perspective, and with that I mean you are keenly aware of the personal nature of money and you're keenly aware that all of us have different relationships with it. How does our past or our experiences relate to our money habits? Is there a way to change those habits if we don't like them as well?
Lianne:Yeah, that's a really great question. It's a really great insight into how we think about money, because we hear a lot of personal finance when it comes to money and I love that they put the word personal in there. But sometimes when we hear money tips or we hear finance tips, it's hard to really think about how it personally impacts the person who's hearing it. We all are a product of our lived experiences and some might even say the experiences of our ancestors before us also impact our current experiences and oftentimes when we might hear a finance tip or a money tip like create a budget and follow it it could really impact you differently depending on the experience that you've had with money. You know there's a lot of science that goes into the psychological aspect of money management. So for me personally, when I started really on my journey of digging deep into how my past really impacted how I saw money, I really learned that how I came to money in my story when really digging it out, it was really connected to my mother and how my mother, being a single mother raising two children on a fixed income you know, an income that wasn't necessarily abundant at the time I really internalized I need to help her. I really need to help her and I really need to figure out how this money thing works so that we can have more of it. And it appeared to me now when I looked at money later on, that I was always approaching it from a codependent standpoint. So if I heard a personal finance tip pay yourself first, right put aside for yourself first I was literally resistant to that. Instead, what I wanted to do was help my mother first, you know, and I had to come to the realization that that colored a lot of my personal finance decisions. And for me to pay myself first, it meant that I had to look at it personally different in a way where paying myself first might be. I invested in helping my mom get a house, a house which we own together. It's a finance vehicle for me, but at the same time, I'm helping to pay her first. So really melding what are these personal finance tips into your personal situation is going to be different for a lot of different people. Going back to that personal finance tip, you know, save for retirement or create a budget If you're someone who, in the past, as a young person, might not have had the topic of money being discussed in your household.
Lianne:There was a lot of shame around it. There was a lot of avoidance of money topics. If those bills piled up and nobody ever opened them, you might come to money as an avoided person. As an avoidant person, to hear, hey, let's write down where you spend all your money and let's follow up on all the bills that you have to do can seem very, very overwhelming.
Lianne:So I think as a first instance with any personal finance journey, it's really good to explore your personal experience to money and what are you bringing to the conversation that the person at the party that's trying to help you might not be hearing to really surface those thoughts and of course, those past experience create habits right, and if you want to break them, it's for me.
Lianne:I'm really more rooted in a lot of ancestral, particularly African ancestral, methods and that really involves meditation and really setting an intention for what you want, sending an attention for what the day might hold and sending an attention to disperse negative thoughts. So even when those things come up with your money where you're like I can't afford this, get rid of that thought right away. Money is abundant, money is plentiful. What I put out will come back to me and to really kind of shake off those scarcity mindset that you might have had as a young person and really form new habits around your money. And I think it really starts with meditation, it starts with reviewing your money and lighting a candle and then, getting rid of all those negative thoughts when it comes to money.
Meg:Yeah, I mean I think that's a really good point that sometimes I mean just practically speaking when we review what we have, we realize that we have more than we thought as well, or that more things are possible. So I love that. I love that we can change our habits, because I'm sure all of us have some habits from our past that we don't want to continue. One of those habits may involve debt, because many of us grow up with the idea that debts are bad and we should avoid them whenever we can. But you don't necessarily agree with that statement. I was surprised last time we spoke that when you disagreed, your philosophy went beyond building credit, which is the usual argument for this. Can you tell me more about your perspective on debt?
Lianne:Yeah, I really feel that debt gets a bad name. You know, for me it's just another source of capital, another source to you know, fulfill your, fulfill your, fulfill whatever life that you want to lead. I really do think it's more about looking at how you can invest in good debt and that good debt can lead to other prosperity going forward. There's a lot of things you couldn't do if you didn't take on debt. It would be harder to buy a house, as an example, if that's something that you want if you had to save for years and years and years to accumulate that house, so to accumulate the dollars to purchase that house. So we get mortgages right. Mortgages is a good debt if it leads to the ability to shelter yourself, if it leads to the ability to house yourself, it leads the ability to pass on that place to it for your family.
Lianne:What's not good is debt that is loaned out at high interest rates or debt that is not in line with your ability to borrow. So a lot of the times, that's where the credit conversation comes in. But oftentimes, when we look at that credit conversation, we factor in somebody who might not have collateral as a bad risk and then warranted to have higher credit. I really do think that that's all backwards. We really need to lean into the character conversation when it comes to loaning out of debt and whose risk is it really?
Lianne:Why should, for example, a lending institution lend out at a higher risk for someone who might not have collateral in order to borrow, which kind of seems kind of strange and instead why not take your normal return that you would have on that? Because the risk is really being borne by the person who might not have that collateral in order to take out that loan. So I do think if you're going to become a student and get a next career, that's good debt. It's going to lead to returns later on. If you need debt in order to buy a home, again really, really good debt. And I think we really need to get out of this credit conversation of who is worthy, who's a high risk, and just really pursue looking at it as capital to really fuel your life.
Meg:Yeah, and so those are just a couple of examples, and there are many other examples of good debt, and it just depends on our personal situations, I'm sure. So that's great. So when we first met, we also talked a lot about risks, and usually when we talk about risks in finances, we're talking about investment risks, but you pointed out that we can also take risks in our personal lives, in our career, for example, and that can impact our finances. Everyone has a different personal situation, everyone has a different capacity for risk, and that's often again due to their background or personal situation that they find themselves in. How can we assess our personal capacities for risk and how might that affect our financial decisions or change the way we look at our finances?
Lianne:Yeah, I think traditionally, when we look at risk, we look at portfolio risk. So what's, what are you invested in, right? So we take a look at how much equities you have, how much fixed income or sometimes debt do you have and how much is in cash, and we prescribe a characteristic to that portfolio. Is it a conservative portfolio, so it's more heavily weighted and fixed income type securities? Is it a balanced portfolio, where it's, you know, 50-50 or 60-40 between equities and debt? Or is it more aggressive, where we're leaning into equities because equities tend to get a larger return than fixed income? And oftentimes we say to someone so are you a conservative, a balanced and aggressive investor? And we leave that conversation at that. What I like to think about is let's expand, not only how are you investing your money, but how are you making your money, what is the career that you're in and what is your own personal view of your risk in that career? You might be I love that we're speaking to Waterloo grads, so some of them might be in the tech sector.
Lianne:You know there is a particular trajectory for tech careers. You know, if you are planning to be very, very ambitious in your career and move up the ladder. That's an aggressive stance, so you're leaning more into taking a riskier stance when it comes to making your income. So maybe on the other side, when you look at your balance and your investment portfolio, you want to be a little less aggressive, you know, to tone down that portfolio. So basically putting more dollars away in a way, in a way that are going to earn a more conservative or a more balanced return to outweigh the aggressive nature of your, of the job that you've chosen to lead.
Lianne:And even if it is tech, but you've decided to maybe be an IT and not be a manager, you know, really have a steady career, a steady return of income and maybe just not pursue moving up the corporate ladder, so to speak. That then you can take a more aggressive side. You might be in cybersecurity or a particular area of tech that is going to be more stable into the future. So when we look at your investment portfolio, let's be more aggressive in terms of what you are investing in. So it's also to just look at the whole picture.
Lianne:This could apply to many different careers. You know more and more, careers are being more and more volatile, so I think we need to temper that with how we are investing, because to take a hit on an employment side as well as a hit on an investment side can really shorten how the life that you have to recoup and how much money you ultimately have to put away so you don't have to work anymore. So, yeah, just really balancing and stepping back and looking at the whole picture of our personal decisions and what risk are we taking in that personal career trajectory.
Meg:o much and really, when you break it down and you think about it, I don't know why we haven't brought that into the mainstream conversation of financial risk before. It just makes sense because, like you said, some industries are more volatile than others and we know they are because we're investing in them. Exactly, exactly, exactly.
Lianne:Diversification too right. You know, if you're going to be in the tech industry, make sure you're not all invested in tech stocks. Put some financial institutions, put some some consumer goods you know international as well too. Yeah, it's important to diversify.
Meg:Yeah, that's a great point too. So look, speaking of careers, you also have some great advice for people who are learning to negotiate salaries. And from personal experience and I'm sure lots of people have experienced this negotiating a salary is a money topic that feels very transactional. In theory, it is totally transactional, but it's actually filled with so much emotion in the moment when you're doing it. Do you have some advice that you could give to someone who's maybe just starting their career or hasn't had to negotiate a salary before?
Lianne:Yeah, I think this is where we all need to take a deep breath, because we're not really let alone we don't really talk about money, let alone talk about money in the context of exchanging your work for money. So I often say to people one of the first rules is you need to negotiate. So you know, get comfortable at a young age doing this, that this is something that you should be doing, because it's basically leaving a lot of dollars on the table, and what you establish early in your career it's harder to get incremental increases that will outweigh not negotiating in the early years. One of the things I say is, when you're starting out, it's great to negotiate in groups. So I started off in my accounting career. There was a whole bunch of us that were all starting together, so it meant that it became easier. We were negotiating as a group of employees for wage increases.
Lianne:You know this might you know, this is almost like a union type thing, but without the whole stance, but when you negotiate together and it gives you a little bit of security in making those initial negotiations just decisions, but eventually you won't be in a group. So I often say the first thing is, if you're applying for a role, try not to discuss how you personally want to be compensated until you want to accept that role and they want to have you in the role. It's a little bit harder to do if they don't publish the salary range available for that role. But if you can, as best as possible, when you're asked how much would you like to be compensated for this, you should say well, I'm sure you guys have a budget for the role. Can you tell me what the range is for this role? And if you're pressed again just to say you know what I'd still be scoping. What the role is entails, I would expect for it to be fair compensation. Let me get back to you once. I learn a little bit more from the hiring manager what the role is. So I would say that's the first thing. Try and delay the conversation until it is an actual role that you want and that they also want you in that role.
Lianne:The second thing is never take the first offer. This is in my experience. Whatever the first offer is, trust me it's not the max that they are considering for the role. They always leave room for negotiation. This is just the way our industry works. This is the way it is. So never take the first offer. And I would say then do your research on what you are willing to, what that role pays in the market, and put a premium or take off less if they allow you to work from home, if you have to commute, all those different things. Go into the consideration for the role and your unique experience. And when you're looking at that and you might determine that their offer is below what you would want for that role, offer them a range. Explain to them why you think that is based on market factors, based on your personal experience. And this is my number one tip when you give them that range, make the floor of the range, the low number, the minimum that you will accept for that role, so you have nowhere to go but up in that particular instance. Always make the floor, that minimum number, and trust me, they're probably going to do a halfway in between kind of a scenario. So don't make the range too big. But you know, the floor should be the minimum that you were willing, willing to accept.
Lianne:And I'm using the word accept specifically. I think oftentimes, when we talk about salaries, we use the language get paid what you're worth, and I just want to be really clear that you are. What you are worth is immense list, it is not quantifiable. So it is not to get paid what you were worth, but paid what you are willing to accept. So just, really, just be clear on if I'm taking this role at this salary level, at this overall compensation level, considering all the non salary benefits as well, am I willing to accept this? Does this sit right with my soul? And if the answer is no, don't take the role. Trust me, sit in meditation. That next best thing is coming. It's, it's meant for you. So you know, those are really my tips. You know, don't discuss as early as, don't discuss, put off that discussion. Make that floor the minimum you will accept and you are immensely so, you know. Make sure you consider that when you full throat negotiate going forward.
Meg:Yeah, cheese. I could have used that right out of school when I knew nothing about salaries. Yeah, I think that those are all great tips. I love the last part about what you're willing to accept and how much you're worth. I think it's important for us to consider that when we're talking about finances, and especially payment for our work, so I appreciate that perspective. Lianne, it's been so great to talk to you today. So great talking to you too.
Lianne:This has been wonderful.
Meg:Thanks so much for listening. If you enjoyed this episode, please subscribe to our feed. If you want to learn more about finances, career paths or other practical topics, check out our list of upcoming events for alumni. Thanks to alumni volunteers, we host events all over the world. Follow the link in our episode description to learn more. You Waterloo alumni podcasts are produced and hosted by me, Mg Vander Woude. I also happen to be a proud alum. Thanks to Angle Media for editing this episode.