Tag Archives: Money Matters

The Art of Living

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The hippy title of my first year writing seminar at Pacific Lutheran University.

I just read my 32 students’ initial essays in which they summarize what they think they know about the theme and then describe their writing process, strengths, and weaknesses.

Most of them hope the class and I will help them figure out what to study and do upon graduating. That’s not terribly realistic, but I suspect they will spend more time thinking and writing about how they want to live their lives during our seminar than throughout kindergarten through twelfth grade combined.

First Born, starting her last year in college, is also thinking with more urgency about what to do for work after graduating. She’s a religion major without any interest in seminary or much in teaching. Everyone tells me she’ll land on her feet and I think they’re right.

The GalPal and I took her out for pizza recently in her Minnesota college town where she spent the summer working full-time in the college’s library. I was happy she got the library gig because given her passion for books, I’ve thought she might end up a librarian. Over pizza she explained that she liked her job, but doesn’t want to be a librarian, because “It’s not creative enough.”

I was impressed with her self understanding. She doesn’t know what jobs to apply for yet, but she has a pretty good feel for what type of work she’d most enjoy—creative work that is sometimes team-based, sometimes solo.

Recently it was reported that 70% of US workers “are not particularly excited” about their jobs or “are actively disengaged” and “roam the halls spreading discontent”. If we use world history as our frame of reference, I’m guessing that number would be well north of 90%. Most of the world’s people most of the time do monotonous work to feed, clothe, and shelter themselves.

So when my students write that they want to enjoy their work and First Born says she wants creative work, they’re planting a distinct, 21st century, privileged stake in the ground. Normally, the concept of “privilege” has negative connections since it’s associated with preferential treatment and a sense of entitlement; however, in the case of my students and First Born, their preference for meaningful work is undeniably positive.

They want to earn enough money “not to have to worry about it all the time,” but beyond that, they want to be like me and 30% of US citizens for whom work is creative, engaging, and meaningful. Every young person should embrace that form of privilege.

Marriage Red Flag

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My nomination for a SLP personal finance journalism award—given to the author of a particularly succinct, lucid, and provocative personal finance article. From Rachel Emma Silverman in the Wall Street Journal (10/17/11):

If you care too much about money, your marriage may suffer.

A new study by scholars at Brigham Young University and Provo, Utah and William Paterson University, Wayne, N.J.. looked at more than 1,700 married couples across the U.S. to determine how their attitudes toward money affected their marriages.

Couples who said money wasn’t important to them scored about 10% to 15% better on measures of relationship quality, such as marriage stability, than couples where both or one spouse were materialistic.

Also, couples in which both partners said they valued lots of money—about 20% of the couples in the study—fared worse than couples who were mismatched and just had one materialist in the marriage.

“Couples where both spouses are materialistic were worse off on nearly every measure we looked at,” says Jason Carroll, a BYU professor of family life and lead author of the study. “There is a pervasive pattern in the data of eroding communication, poor conflict resolution and low responsiveness to each other.”

In the study, published recently in the Journal of Couple & Relationship Therapy, participants completed a questionnaire which evaluated their relationship and asked, among other things, how much they value “having money and lots of things.”

Dr. Carroll says the research team had expected that disparate couples, those with different ways of viewing money, would have worse relationships. They found, though, that it was “materialism itself that’s creating much of the difficulty,” even when couples have plenty of money, he says.

Materialism might cause spouses to make poor financial decisions, such as overspending and running up debt, which can strain relationships. What’s more, materialistic spouses may pay less attention to their relationships and give their marriage lower priority than other concerns.

In other words, marry someone who values “having money and lots of things” at your own risk.

Winning Personal Finance 1

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Everyone is hocking financial advice so how does one decide whose to follow? For example, why on earth should anyone pay any attention to the personal financial advice I offer below? What makes one advisor more credible than another, credentials, their popularity, their marketing savvy, something else? Credentials are nice in that they create a floor with respect to technical knowledge, but they don’t tell you much about the person’s ethics, integrity, or track record. Ultimately all credentials tell you is they succeeded in passing exams.

If I was looking for a financial advisor I’d look for someone that managed their own money well and emphasized saving, investing simply, and had other values that jived with my own. But how do you know if someone manages their own money well when we’re loathe to talk about our personal finances?

Tip one. Ask anyone wanting to manage your money to prove that they’ve managed theirs well. That will probably reduce the pool from which to choose in at least half. Take me for example, I have managed my family’s money well, but for privacy reasons, I won’t provide details except to say that for every ten financial decisions I make, I tend to make seven or eight good ones. Were I in the biz, I would completely understand if that lack of specificity caused potential clients to walk away.

Tip two. Ask any potential financial advisor about some of the mistakes he or she has made and what they learned from them. Last year I made a $9,000 mistake. I repeat, last year I made a $9,000 mistake. It was a brutal, self-inflicted wound that took time to shake. My goal is not to be perfect, but to consistently make more good decisions than bad. Look for a humble advisor who acknowledges complexity and doesn’t over promise. That will probably reduce the pool of potential advisors by at least another half.

Tip three. Even if you find a financial advisor that meets all of those criteria, don’t decide to work with him/her without first looking at yourself in a mirror and repeating several times, “No one will ever care about my financial well-being as much as me.”

Tip four. Never accept any financial advice passively. Instead educate yourself and recognize that no one will ever care about your personal financial well-being as much as you. More specifically, become your own financial advisor. That’s the best financial advice I’ll ever offer. Become your own financial advisor.

Well, the best advice until Part Two.