Do Our Attitudes About Money Help or Hurt Us?

We may need to change them to better our financial prospects.

Our relationship with money is complex & emotional. When we pay a bill, go to the mall, trade in a car for a new one, hunt for a home or apartment, or pass someone seemingly poor or rich on the street, we feel things and harbor certain perceptions.

Are our attitudes about money inherited? They may have been formed when we were kids. We watched what our parents did with their money, and how they managed it. We were told how important it was – or, perhaps, how little it really mattered. Parental arguments over money may be ingrained in our memory.

This history has an effect. Some of us think of money, finance, investing, and saving in terms of getting ahead, in terms of opportunity. Others associate money and financial matters with family struggles or conflicts. Our family history is not responsible for our entire attitude about money – but it is, undoubtedly, an influence.

Our grandparents (and, in some cases, our parents) were never really taught to think of “retirement planning.” Just a century ago, the whole concept of “retiring” would have seemed weird to many Americans. You worked until you died, or until you were physically unable to do your job. Then, Social Security came along, and company pensions for retired workers. The societal expectation was that with a company pension and Social Security, you weren’t going to be impoverished in your “old age.”

Very few Americans can make such an assumption today. Many are unaware of the scope of retirement planning they need to undertake. An alarming 54% of pre-retiree respondents to a 2016 Prudential Financial survey had no clue how much they needed to save for retirement. Additionally, 54% had balances of less than $150,000 in their workplace retirement plans. Have they been lulled into a false sense of security? Did they inherit the attitude that when you retire in America, Social Security and a roof over your head will be enough?1

How can pessimistic attitudes about money, saving, & investing be changed? Perhaps the first step is to recognize that we may have inherited them. Do they stem from our own experience? Or are we simply cluttering our minds with the bad experiences and negative assumptions of years ago?

One example of this leaps readily to mind. Earlier this year, Bankrate surveyed investors per age group and learned that just 33% of millennials (Americans aged 18-35) owned any equities, while 51% of Gen Xers did. (That actually represented a dramatic increase: in 2015, only 26% of millennials were invested in equities.)2,3

College loan debt and early-career incomes aside, millennials watched equity investments, owned by their parents, crash in the 2007-09 bear market. Some are quite cynical about the financial world. A 2015 Harvard University study showed that a mere 14% of respondents aged 18-29 felt that Wall Street firms “do the right thing all or most of the time” as they conduct business.3

How do you feel about money? What were you taught about it when you were growing up? Did your parents look at money positively or negatively? These questions are worth thinking about, for they may shape your relationship with money – and saving and investing – here and now.

Citations.
1 – businessinsider.com/reasons-for-americas-retirement-crisis-2016-11 [11/29/16]
2 – ibtimes.com/should-you-invest-stock-market-why-millennials-might-be-missing-out-when-it-comes-2389589 [7/6/16]
3 – thestreet.com/story/13135109/1/why-millennials-dont-trust-wall-street-or-investing-in-stocks.html [5/2/15]

This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This material was prepared by MarketingLibrary.Net Inc., for Mark Lund, Mark is known as a Wealth Advisor, The 401k Advisor, Investor Coach, The Financial Advisor, The Financial Planner and author of The Effective Investor. Mark offers investment advisory services through Stonecreek Wealth Advisors, Inc. an independent, fee-only, Registered Investment Advisor firm providing investment and retirement planning for individuals and 401k consulting for small businesses. Stonecreek is located in Salt Lake City, Murray City, West Jordan City, Sandy City, Draper City, South Jordan City, Provo City, Orem City, Lehi City, Highland City, Alpine City, and American Fork City in Utah.

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