Winning the Lottery: Financial Peace or Pain?

Imagine it. You've just WON the Super Lottery and now have more money than you ever dreamed of. But, does winning create financial peace or pain? For too many it's pain. Most people that win the lottery are broke or bankrupt within 5 years. That’s because winning a bunch of money and financial wisdom don’t necessarily go hand in hand. Winning is really a set-up because our training in how to manage money, grow and enjoy our money in healthy ways is so lacking in our families and our school systems.

I was making a deposit at the ATM Thursday March 29th and there was a big line of people buying tickets for the lottery. A few years ago I might have been in this line also. But since I’ve been trained as a Money Coach the “money fool within” is less likely to run the show and imagine I’ll beat the 175 million to 1 odds of winning.  

Yet, of course, people do win the lottery. I say good for them, IF they can quickly learn how to manage their instant wealth. Unfortunately, that doesn’t often happen. In fact “*…70% of all lottery winners squander away their winnings…” in less than 5 years. This is the same problem that NFL players are notorious for having. Most are broke a few years after leaving professional football.

Why is that? The simple explanation is that when someone’s networth takes a radical leap upward their self-worth doesn’t necessarily change as well. We all have a financial comfort zone we operate within. Too many people will get rid of new money in an unconscious way to stay in their old financial comfort zone. What I want for new lottery winners is for them to educate themselves immediately about what’s happened to other winners so they can avoid the heart-ache of financial destruction. The key to financial peace whether you’re a lottery winner or not, is to learn about your relationship with money, your money strengths and weaknesses and the hidden pieces that create money problems so that you can make the best financial choices.  (*Read referenced article here: http://tinyurl.com/88zfryt) To get started read Deborah Price's book: Money Magic or David Krueger's The Secret Language of Money.

Money, The Super Bowl & Gotta Have A Big Screen TV!

Television companies LOVE Super Bowl Month. That's when 4.5 million of you bought new big screen TV sets in 2011, which was up from 3.6 million in 2010. Now, here's the question: If you're impulsively buying a new TV this season, are you more likely to use credit or pay cash? And, which part of your brain do you think is in charge of this decision - your logical neocortex or your more emotional midbrain? And why could the latter be a huge problem? (Well, not for the credit card companies.)

Before I answer those questions, think about this:  *"Would you rather have $15 in two weeks or $20 in four weeks?" According to fMRI brain imaging scans taken while the person is pondering, this question lights up your prefrontal cortex because it asks you to project into the future. But this next question:  "Would you rather have $15 now or $20 in 2 days?" shows that the logical ignores that question and the primitive brain lights up. This is why we get into big trouble as consumers. If we want something and we want it NOW we will have it. Just CHARGE IT, right?

Of course we all know that consumer debt is a problem that creates strife and struggle. For you Cpa’s or Financial Advisors this piece around emotional decisions vs. logical is key when you’re advising your clients to save and invest in their future. Saving for the future is a prefrontal logical decision. Unfortunately, the emotional brain is all too often in charge.  We all know of someone (cough, cough) who know they SHOULD be saving for their future or be adding money into their 401K. But the immediate reward of NOW wins out. 

To help keep your logical brain in charge of major decisions, Dr. Krueger says to avoid making important money decisions when you're emotional or too tired, wait and sleep on big decisions and have a plan that you STICK to. There's an acronym from 12 Step Programs: HALT: which means to avoid getting too hungry, angry, longely or tired because these are vulnerable states of mind. 

(*from The Secret Language of Money, David Krueger, M.D.) 

The Financial Responsibility of the 99%: Time to Put Your Big Boy & Girl Money Pants On!

There is a shared responsibility for the financial condition of the world. The 1% need to share their money more equitably. The 99% need to educate themselves about money and take their power back, or perhaps develop a sense of financial power for the first time. There’s something I realized this year and that’s how ignorant most of us are about our relationship with money. I came to this ah-ha while going through a five month training to become a Certified Money Coach.

Now that I can see more clearly, because my financial blinders have been partially removed, I get how little the collective us really understands about money. What does money really mean to you? Fill in this blank. To me money means________.*  Most people say freedom or security. I like to add FUN. As a therapist/coach/business owner I’ve been interested in making more money, and read at least 50 books about money – how to make it, and make more of it, keep it, save it and manage it.  But there's a deeper meaning to money that remains hidden for most of us.

The anger that the 99% feel toward the wealthy 1% can be a positive anger if it gets channeled in healthy ways. Yes, legislation that favors the 1% disproportionately needs to be changed. But, the 99% also need to take financial responsibility for their money ignorance and lack of power. We need to educate ourselves and there’s no excuse not to because the information is available. In the last ten years, not only do we have books available about the nuts & bolts of money (budgets, making more $$, etc), but most importantly how to change our emotional relationship with money. That’s where the real juice is.

I gave a presentation about Turning Financial Stress into Freedom to a group of multi-level marketers last week. It was really fun. These are folks that still believe in the American Dream and who are hard workers, and goal and success oriented. But, they will only be able to achieve their financial dreams if they understand and begin to transform their understanding of how they emotionally react and respond to money.

Here are 3 things I shared with them that may help you:

1) Raise your money consciousness by knowing how much money YOU need (not your parents, your spouse, your kids, your best friend) to make you happy. Write down that number________.

Research shows most believe that to be between $50-70K a year.

2) What is your earliest money memory?** __________ How does that memory affect your adult relationship with money today?

One woman at the talk shared that as a child she would ask her parents for money and they always gave it to her. Now, as a sales person she has no problem asking for the sale or the check.

3) How did your parents feel, talk about or behave with money? How do the thoughts, feelings & beliefs you developed in your family affect you today? "Your relationship with money is not just about money, it's about everything. Everything you eat, drink, fear & buy." David Krueger

*David Krueger The Secret Language of Money ** Deborah Price Money Magic