Everyone wants financial security. Interestingly enough, one of the biggest indicators of financial success doesn’t deal with numbers at all.
How does self-confidence affect the way women deal with personal finance?
Financial podcaster and money counselor Jen Hemphill explains why financial struggles are frequently caused by a lack of self-confidence. Why do stay-at-home mothers often feel guilty about not earning money, even though they are doing an important job?
As the American presidential elections approach, Doug Goldstein CFP® and guest co-host, financial advisor Roger Whitney, from The Retirement Man podcast, explore how the resultant economic upheaval may affect the way you invest. What should you do when dramatic world events impact the economy? Can having liquid assets available protect your portfolio?
Follow Jen Hemphill at:
http://jenhemphill.com/, where you can also join her financial community, and also on Twitter @jenhemphill
Follow Roger Whitney at http://rogerwhitney.com/ and on Twitter @Roger_whitney
Watch Spark Your Money on YouTube.Read the Transcript
Interview with Jen Hemphill
What do families need to know about finance? Jen Hemphill, host of the Money Matters podcast, discusses how couples should relate to money. How does the whole family contribute to the household’s economy?
Douglas Goldstein: I'm very happy to have Jen Hemphill on The Goldstein on Gelt Show. She is also the host of Her Money Matters podcast, which is a show designed for women to learn about dealing with money. She helps women transform their finances from being totally overwhelming to making it really normal and simple. She also helps people build the confidence they need to handle money. Jen, do you help men too?
Jen Hemphill: It's not that I don't help men. The reflection of how I help women really transcends into the lives of men too. In a relationship, when the woman is more confident and feels motivated and inspired to take action with her money, she naturally makes better decisions. The relationship is naturally going to be more at ease, because she's more confident. When I do one-on-one coaching, if there's a spouse involved, they are going to be on the call. My focus is on women because I know how to talk to women about money.
Douglas Goldstein: What do you tell people to make them realize how important it is to involve their spouse in financial matters?
Involve Your Partner in Financial Matters
Jen Hemphill: This is so important. Your spouse needs to be in the know about financial matters. Things can happen. You can lose your spouse. What happens then? If you haven't been managing the money, you have to be able to pick up and go. If there's a divorce involved, or things like that where life changes, you just have to be able to pick up and go and just be prepared. I communicate in those ways where it's just important when life changes because life happens. It also makes a relationship a whole lot easier in the day-to-day life.
Douglas Goldstein: Why is money and relationships such a stress factor?
Money, Relationships …. And Stress
Jen Hemphill: Money is emotional and we all grew up differently around money. Therefore, how we treat and manage our money is different. We have a different emotional attachment, if you will, depending on how we grew up. If you grew up in a household where you heard a lot of, "We can't afford this" all the time, you might end up being a saver or a hoader, like I was. We have to be in tune of how we grew up around money to know why we're treating money the way we currently are.
Douglas Goldstein: Obviously, when two people come together in a relationship each one is going to have a different background, experience and even fears about money. What's a good way for people to face these challenges together?
Jen Hemphill: When we have money conversations with our spouse, especially if it's stressful, we don't want to talk directly about the money. You don’t want to be direct with your spouse on why they spent this much or what they did with the money. That will definitely go around the wrong path. Instead, you want to take the path of a more calm setting where you don't talk directly about money. You start by getting to know each other better, even though you've been married for a long time.
Have you observed and listened to how your spouse grew up around money? If you have, that's great because you are more in tune to why they are the way they are. Does that make sense?
Douglas Goldstein: A lot of people come from homes or backgrounds with bad money habits. How can they change them?
Jen Hemphill: There's different ways. Basically taking a step back and giving yourself the permission that you're not going to transform yourself overnight. Give yourself the permission to take baby steps and celebrate those baby steps, those accomplishments, no matter how small, along the way.
Douglas Goldstein: Let's say that you are coaching someone who clearly suffers from overspending. What baby steps would you suggest that she takes in order to stop that habit?
Jen Hemphill: First, we would assess why there's a lot of spending going on, and true numbers of what that looks like. We have to be clear about those numbers. I’d also want to know the cash flow. 'Impulse spenders', have to put some money aside for that because that's what's going to throw their budget off.
Douglas Goldstein: Are you saying like an emergency fund for retail therapy when you’ve got to go buy that pair of boots?
Jen Hemphill: Yes. A blow-off or a splurge fund. I always teach people to put some money aside, of course bearing in mind their cash flow. Assess what your habits are as far as overspending is concerned. When you overspend and it's not in your plan it throws everything off. Again, it's a rinse and repeat process; it's not a perfect process. Once you start putting that money aside, maybe $50 or $100, you won’t feel guilty when you spend it.
Douglas Goldstein: It's planning ahead even for short-term needs or wants. It doesn’t have to be all about retirement planning. Now, how about stay-at-home moms who feel guilty that they aren’t contributing to the income of the house? How do you deal with that?
Do Stay-At-Home Moms Really Contribute In The Home?
Jen Hemphill: Even if they might not partake in the income, they are partaking in the money. They are out doing grocery shopping and taking care of the family and that’s a huge thing. They may not be bringing in income but they can partake in how to manage the money better. How to save better and how to achieve those financial goals. Stay-at-home moms have jobs – maybe not paid jobs, but fulfilling and important all the same.
The Family Cum Company Analogy
Douglas Goldstein: I usually say, look at your family like a company. In a company there are the salesmen - the only people who are bringing money into the company. But you also have managers, secretaries, janitors, and the president. People are doing all sorts of other jobs, from accounting to legal work to maintain that whole structure. Even though there is one guy out there selling and bringing in money and he thinks he's really a hot shot, without everyone else involved there simply is no company. In this case, no family.
Jen Hemphill: It's definitely a team effort and I love that analogy.
Douglas Goldstein: Jen, how can people learn more about you and follow the work that you're doing.
Jen Hemphill: They can simply visit jenhemphill.com and I do have a free community that you can join, and that is at jenhemphill.com//community.
Douglas Goldstein: Jen, thanks so much for joining us.