Dr. Mary Gresham » Financial Psychology

Helping young adults who are underfunctioning

Dr. Mary Gresham — Sun, 02 May 2010 19:26:40 +0000

Is there such a thing as a slacker young adult? Yes there is and they may be part of your own family or even living with you. I have recently been asked by 2 mothers who have children in their 20s living at home, how to help launch these grown children. First of all, not every child who lives in a multi-generational household is a slacker. Some are busy as students or full-time employees and it may be that these young adults are living at home to save money for something important or avoid student debt. In these cases, the children pay some of the living expenses of the house and do chores in the home to acknowledge that they are not guests but family members who have to contribute to the household. They are living in the home as adults and are able to negotiate and have some say over communal issues that arise in every household (i.e. how long can dishes go unwashed in this house?).
The young adult I am referring to as under-functioning is not in a healthy situation like the above but is living off his/her family. This child may be working part-time and having a perpetual summer, sleeping late and primarily interested in hanging out with friends. There is not a sense of moving forward in this young person’s life but more of a sense of being stuck. If you are the parent of such a child, you may be distressed but you keep allowing yourself to be persuaded by your child’s compelling arguments to keep things the way they are. If you take a step back and look at the situation you might begin to see how this is doing your child a true disservice. If your child has no inner drive to leave, you will need to become the motivating force if you are not happy with the situation. All young adults should pay some money for their upkeep. You can use this money to create a savings account for your child and then use the savings to help your child move out. You can also use the money they contribute to buy your child a service instead of free rent. Some young adults need counseling to develop the confidence to leave home or to begin to see the benefit of leaving. Sometimes they need the services of a career counselor or a financial advisor to help them develop the skills of independent living. Having them be responsible for some of the cleaning and cooking tasks is another way to send the message that they need to be learning the skills of living as adults. Sometimes it helps to ask them (with compassion) if they are afraid for some reason to grow up?
Many young people may initially resist changes that ask more of them but over time they will notice an improvement in their feelings about themselves. It does not feel good to know that you are not developing your potential as a person but many young people do not realize how their feelings of well-being can be improved by becoming a more highly functioning person. Remind your child that he/she will feel better if they are moving ahead in life even if that means paying rent to you. In addition, be sure to look at yourself and your life. Is there some way that you may be lonely or trying to fill a void in your life by allowing your child to hang around the house? Do you need to develop more of a life? Remember that if you decide that you like your child’s presence, you can change to healthier patterns of living together in lieu of eviction but be sure that you are not keeping your child from growing up.

Happiness Research

Dr. Mary Gresham — Tue, 15 Dec 2009 20:11:45 +0000

What should you spend your money on? How effective is therapy at increasing happiness? The latest research from the Journal of Health Economics, Policy and Law ( Boyce and Wood) has an article entitled Money or Mental Health: Alleviating Psychological Distress with Monetary Compensation versus Psychological Therapy. This research analyzed data sets where thousands of people gave reports on their well-being. They compared well-being ratings for subjects who got a 4 month course of psychotherapy to the ratings of those who had a sudden increase in income through winnings and pay raises. The increase in well-being from $1300 of therapy was equivalent in this study to the well-being obtained by an increase of $40,726 in pay. Dr. Boyce writes that the purpose of the study is to help people see that they may be overestimating the effect that money has on their well-being. We should be questioning whether our current spending patterns are having the best impact on our well-being and making our mental health a priority. Perhaps courts should consider awarding therapy visits instead of dollars to plaintiffs. Having material wealth is unlikely to improve mental health, contrary to common myths, and people might be better off spending money on psychological therapy which seems 32 times more effective than money at increasing feelings of well-being.

ABC’s 20/20 program about Onsite

Dr. Mary Gresham — Wed, 05 Aug 2009 18:32:47 +0000

Last Friday night the Healing Money Issues program was featured on ABC’s 20/20. This is a 5 day live-in program at a retreat center in Tennessee that works with clients on money issues. I worked in this program as an assistant last november and learned a lot . Here is a link to the video if you would like to see it. Healing Money Issues

On another note, I am starting my women and money ongoing group this fall. This is a group for women only as all the research and my personal experience leads me to believe that women work best on subjects that are considered “Male-expert” (math, computers, finance) in small same sex groups. This is an ongoing group that follows after two years of offering one day workshops. I feel the one day workshop format does not work as well to sustain ongoing changes as the open-ended group. The group will meet 2 times monthly on wed evenings from 6:30 to 8:00 and is both educational and psychotherapeutic in nature. This is unusual but I think it will be a powerful combination and is modelled on the program at Onsite. The charge for the group is 65 per session and the initial committment is for 6 groups

. The group will be diverse in nature and is appropriate for a variety of issues and ages. Some referrals may be for younger women who want to prevent the problems they see in others; some will be women who have money but are afraid to invest it or use it; some may be for women who are afraid to negotiate or market on their own behalf; some may be for overspending problems, some may be for women who are in partnerships where there is severe conflict about money, etc. If you have a colleague, partner or client or client’s spouse that you believe is a good fit for this program, please have them contact me

Helping Teens Through The Downturn

Dr. Mary Gresham — Mon, 02 Feb 2009 22:08:01 +0000

This is a particularly difficult time for teens whose families have been hit hard with the economic changes. Why especially hard for teens? This is a time when teens want to break away from their families more and turn to the peer group. Yet if the family is in crisis, it becomes very hard to break away just when everyone needs to pull together. So the changes work against the developmental task of the teen years. It is also possible that being with the peer group would involve money that is no longer available .To go out to eat or on field trips or other youth activities requires money that the other kids may still have and your teen will be left out. Sometimes families have to relocate and the teen loses the peer group that is so important and finds it hard to break into a new one. And of course, teens are often materialistic and group status may depend on wearing certain clothes, shoes, etc. In addition many teens are aware that plans for college may have to change and this can be upsetting especially if older siblings have not had to deal with this stress.

The Iowa Youth and Family Study project was started during the period when many families were not able to keep the family farm ( late 80’s) and had to weather a serious economic downturn. 500 7th grade students were followed over a period of 20 years, making this one of the most comprehensive studies of family life done. What do you imagine caused these teens the most trouble? The emotional distress of their parents!!! They were able to adapt to the changes in circumstance but if the parents were irritable, depressed , withdrawn, fighting with each other, etc. , these teens did worse than the teens whose families pulled together and weathered the changes with greater acceptance and calmness.

See also the current February issue of Money magazine for an interview with me that talks further about helping teens through this time.

Money and the Experience of Loss

Dr. Mary Gresham — Tue, 16 Dec 2008 17:55:36 +0000

This is a strange and frightening time for so many of my patients, colleagues and friends. Those of us who have not yet been hit by the downturn are waiting to see when it will happen to us as well. Most of us have already experienced significant losses in our feelings of security and well-being. The money losses we point to in the stock market symbolize this for us, even if we have not yet sold anything at a loss; we are concerned about the futures we had planned.

Money losses are very painful. In fact the money research shows that we feel significantly more pain ( about twice as much) over money loss than we feel pleasure about money gain. This means that loss is a feeling that we are motivated to avoid at all costs. Unfortunately, no one can avoid the experience of money loss in the current situation. For many people, the money represents the years and time spent working and so they also feel as though they have wasted their time and energy.

Coping with money losses requires a strong and flexible approach. It is important not to berate and beat yourself up..the loss itself is enough of a negative consequence. It is also important to feel creative in dealing with the twists and turns in your money life. Creativity lets you see other ways to live and thrive besides what you had planned. One of the most important images that comes up for me and helps me during times when I am coping with money downturns is a memory I have a patient I worked with years ago. She was a middle-aged homemaker who was going through a divorce that would greatly reduce her standard of living and put her back in the workforce unexpectedly. As we were talking about the moments of her day that brought her the most pleasure, she described taking a hot bath and sipping a cup of tea. She then realized that those moments would be available to her no matter where she lived and how she spent her daytime hours.

There are often suicidal thoughts and feelings that go along with money losses. The basic challenge here is to be flexible and see how to live differently than you have in the recent past. When you can see no other acceptable way to live, it is easy to conclude it is better to die than to live another way. People who get through this period are often surprised to find out that their new life has unexpected pleasures that there was no way to anticipate.

The mindset that will help is to use the model of grief …..as if you had lost a family member. Mourn your losses and after an appropriate period of time get back to living and accepting the loss.

Helping Your Child During Tough Economic Times

Dr. Mary Gresham — Tue, 06 May 2008 19:11:10 +0000

If you are one of the many Americans currently facing a downward turn in your lifestyle, you may be concerned about the impact on your children. Whether the changes are due to the high costs of living, a job or business loss or an unsustainable mortgage, your life and therefore your children’s lives will be changing. Recent research in the field of behavioral economics tells us that losses are twice as painful as gains are pleasurable. Learning how to cope with loss is a major life skill and challenge and your children will be watching to see how you handle it. This is how they will learn to confront losses in their lives since they will be modeling after you if they are 6 or older.
It is important to make room for the initial feelings of loss especially sadness and disappointment. If your child has to give up a summer camp or activity or a home and room that they loved, they can be encouraged to be sad along with you. It is important to move on from this initial response into a period of coping and resilience. This is the most important thing that you can give them, an example of facing and weathering the challenges of life with courage and integrity. How do you show this? By talking in the family about things that we can do together to get through this. Children age 6 and up want to contribute to the family as well and will develop a sense of being a valued member of the family if they are allowed to help. How can they help? The can contribute by being willing to go on a picnic instead of out to eat; by paying attention to reducing the use of heat, AC and power if utility bills are high or by helping with a moving or garage sale. There are many ways they can be included in the changes of the family.

One of the benefits of being allowed to help is to develop a greater sense of control over family problems, instead of feeling helpless. When they are told there is nothing they or anyone can do, they get a message of helplessness. Perhaps the problem is the loss of your home. In that case they can help by packing their things and being willing to make new friends in the new place. This gives the child a place to focus instead of just acting up over the changes and creates the beginning of a feeling of efficacy in the face of stress.

Teaching Children About Money

Dr. Mary Gresham — Tue, 05 Jun 2007 19:31:38 +0000

It is important to be able to talk openly with your children about money and the money in the family. Sometimes the only time children hear the word is in the context of conflict, as when parents are arguing or they are being denied a treat. Having open talks begins to break the money taboo and teaches them that this an acceptable subject for a conversation, not just for an argument.

The concepts important to teach include how to spend wisely, how to save, how to invest and to accept that there are others in the world who have a different amount of money, both more and less than they do. Discussing feelings such as envy , greed and fear in relationship to money is also helpful. Many parents are beginning to use a system of allowance that includes money to spend, money to save, money to invest and money to give away as a method of teaching mental accounting. I do believe that children should receive an allowance that is not tied to chores; I believe that they should be required to do chores without receiving money for them, just because they are family members who have something of value to contribute. In addition they should have the opportunity to earn if they go above and beyond the assigned chores and do “jobs” around the house.

It is also necessary to teach how to use electronic money when that time comes, probably during adolescence. Loading allowance on a prepaid visa begins to teach them how to track electronic money, which is much harder to track than physical money or checks. Using the computer for financial tasks is yet another area of education that should be undertaken.

There are websites designed to help children understand the world of finance. Quickenkidsandmoney.com costs a yearly fee but gets good reviews. Others that can be useful are younginvestor.com; handsonbanking.org; and kidsbank.com.

If you have other concerns about raising fiscally responsible children, please contact me at mg@doctorgresham.com.

Using the Internet to Get Out of Debt

Dr. Mary Gresham — Mon, 14 May 2007 19:34:21 +0000

I have noticed a huge increase in the number of Gen X and Y bloggers who are blogging to get out of debt. Here are just a few of the sites I have visited in the past week:

www.lazymandmoney.com
www.mymint.com
www.stopbuyingcrap.com
www.poorerthanyou.com
www.bostongalsopenwallet.com
www.bloggingawaydebt.com

The last one also connects you to ncnnetwork.com where you can set up a chart to show and tell your progress as you pay down your debts. It’s great that the internet is being used for this kind of sharing and accountability. It increases your motivation as you imagine your “public” watching you pull yourself into the black and feeling that you will let them down if you don’t succeed. It’s also inspiring to see others do it and report back how great it feels to be free of debt. “If they can do it, I can do it” is a thought that can carry you through the challenge of changing.
Use the internet to help you become free of consumer debt that will hold you back later in life.

I particularly want to help women in the 20’s and 30’s become free of consumer debt and to think carefully about the amount of student loan debt they take on. Many students and young adults are taking on more debt than their future career can sustain. I would like to continue to find ways to get women to address money issues in a motivating and fun way.

Please contact me a mg@doctorgresham.com to have me come to speak to your group about the mind and money issues related to this kind of debt.

Why Women Want to Ignore Their Money

Dr. Mary Gresham — Sun, 11 Mar 2007 19:38:34 +0000

Well Suze O’s theory is that women are so busy nurturing others that they have little left over to care for themselves. That is true some of the time. But there are also lots of young single women who do have enough time and energy but do not spend it on learning about money managment.

Where does the resistance come from? I think from my own analysis that many women are willing to trade competence for the feeling of “being taken care of” and loved by having their money managed by someone else…and if no one else is there to do it, they would prefer not to be reminded of that. This is one of the last hallmarks of “feminine privilege”..that we will worry about everything and take on every task except the money…..and turning it over reminds us that we don’t have to do it all. We feel loved and cared about in this way and that feeling is just too pleasurable to question too much. Many times it doesn’t matter to us to whom we have turned it over..to a partner, a parent, a professional…as long as we do not have to worry about it. If you examine it, most adults at some level have dependent longings..it looks so easy and inviting. Men long just as much as women to “be taken care of” but they have less permission to enact it.

The difficulty with this option is that we are exchanging genuine adulthood for dependent pleasure and along with that we also sacrifice self-esteem, power and control over our lives. Money is like oxygen in contemporary society…it sustains and supports your life by buying you food, shelter, medicine, transportation,recreation, utilities, social connection in the form of phones, etc. It is too important to turn it over and risk that you may end up without enough to sustain your life through to it’s natural conclusion. It also takes 2 adult partners working in sync with each other to learn all the skills necessary to make the complex decisions they need to make about their resources and their life paths.

Compulsive Spending

Dr. Mary Gresham — Wed, 10 Jan 2007 19:44:04 +0000

The most recent research shows that both men and women are now equally likely to become compulsive spenders..about 5% of our US population seems to have difficulty in this area. Men and women tend to overspend on different things with men likely to overspend on electronics, autos, tools,etc and women likely to spend on clothing, gifts, make-up and items for their children. One factor that has increased compulsive spending is that there are no longer the kinds of external limits imposed on debt that once were in place. Easy credit has made it possible to get into deeper debt holes than used to be the case. It is now incumbent upon the individual to develop controls that used to be externally placed by credit limit. The question now is how to develop those limits internally that used to be imposed from the outside. All of us are subject to the buying impulse that is so heavily researched by the marketing and merchandising professionals. We have to get wise to our own triggers to spend and begin to avoid those situations whether it is going to the mall, the electronics fair or the hardware store. Reading certain types of magazines can trigger the impulse to buy as can surfing the Internet or seeing a friend with something that we envy. You must get wise to your own particular dynamics of the desire to buy. Try to notice the biochemical “high” that can come with a purchase…..and begin to remember other ways to get the same lift in mood and euphoric feelings. What is it that you would feel if you denied yourself this fine thing? Would you be angry, depressed, alone, deprived or some other internal state that would be difficult for you? Remind yourself in the moment that there are other ways to handle those feelings. The first step is to make your spending conscious in the moment and be curious about it and about yourself. It takes many learnings and struggles to get on top of this problem but is inherently worth struggling to do it.

A new program for compulsive spenders has been developed on an internet website called MySelfHelp.com. This site is run by a goup of psychologists and researchers who are developing materials to help compulsive spenders with changes in attitudes and beliefs that will lead to changes in behavior. As of now, I have not heard how the program is working. Therapy can also help with this difficulty…..especially if you are having trouble knowing what your patterns are and need help to identify the dynamics. What you need to acknowledge is the self-destructiveness of compulsive spending and how it will undermine the quality of your life because instead of developing real friendships when you are lonely or isolated, you are buying a substitute for the genuine human need that you have.