Cultivating Wellbeing Through Financial Education

Candace Duecker, CFP®, CDFA®, AFC®, Director, Wealth Advisory

Money conversations are some of the hardest conversations for families to have. For families who desire to align their money decisions with their values and ultimately cultivate wellbeing, it is a vital conversation to have sooner rather than later. Postponing these conversations can create a lack of transparency around the subject of money and a risk for unintended, cultural influences over the values that shape the money decisions of family members. Rather than cultivating wellbeing, we have found that delaying these conversations often creates a slippery slope to resentment within families and divorce or separation among couples. Seemingly overnight, those conversations that were once hard to have suddenly become much harder and require much more courage.

At the heart of our mission at Threshold Group, we partner with our clients every day to help them achieve what matters most. This often includes supporting our client families through hard conversations, especially those involving money and values. These kinds of conversations go beyond fundamental wealth management topics such as estate planning, tax planning, gifting, and portfolio management. These conversations inspire passion, legacy, and help our clients understand how they can use wealth to make the world a better place for future generations. To ignite this magic and fortify it for sustainability, we hosted a Seattle Community Square event featuring the founder and president of Share Save Spend®, Nathan Dungan, to talk about how our money conversations and decisions should include our youth.

Let’s highlight that statement again - our money conversations and decisions should include our youth. Although not mutually exclusive, conversations and decisions involving money are not to be confused with financial literacy. Being able to explain money as a transaction to our children, while not to reduce its significance, is much different than explaining money as an interaction. The Share Save Spend® approach aims to incorporate interaction by infusing stories, values, relationships, culture, heritage, stewardship, mentoring, and generosity, with education. A combination akin to what is experienced by attendees of Threshold Group Community Square events.

Nathan shared his concept of money stories, or rather narratives, with the attendees and how individual money narratives are a collection of experiences, people, stories, values, goals, and actions. We all have a money story that has in one way, shape, or form, been influenced by the interactions and transactions throughout our life. Can you recall your earliest memory of spending money? What about one of your most memorable savings goals in life or your earliest experiences sharing your time or your money with others? For most of us, those early memories were more than likely setting the foundation for our future and we didn’t even realize it.

Just how much influence does one have in shaping the money narrative of the youth with whom they interact and transact? Nathan shared a new study in the Journal of Consumer Research which took a deeper look into what researchers called “material parenting,” using goods to express love and shape children’s behavior[1]. The study surveyed hundreds of adults about their current lifestyle and values, their relationship with their parents, and the rewards and punishments their parents gave them during three stages of childhood: grades 3, 7 and 10. The effects of material parenting were eye opening for many at our Community Square event, especially when hearing that taking away toys or cell phones, for example, may increase the importance placed on possessions in the future. Other studies have also linked materialism with low self-esteem, anxiety, and marital problems in adulthood.

Additionally, a study utilizing Nathan's tools showed that teaching youth about money can decrease their materialism and increase their self-esteem. The study, published in the journal Motivation and Emotion, is the first experimental evidence to demonstrate that decreasing focus on materialistic goals can cause long-lasting improvements in the wellbeing of youth[2]. Nathan’s approach with Share Save Spend® begins with principles of sharing to teach values associated with needs of others and gratitude, followed by principles of saving to teach patience and discipline, and lastly, teaching the principles of spending to help discern needs versus wants. No easy feat when children can potentially be exposed to numerous advertisements a day through various outlets, such as television, social media, reading materials, and their peers.

The mission of Share Save Spend® is to help individuals and families develop healthy money habits that honor their values and enhance their wellbeing. These can be difficult conversations for many families to start and as we know, hard conversations do not get any easier with time. To challenge the Community Square attendees to start thinking about the topics discussed in the presentation and how they might engage their own children in money conversations, Nathan asked everyone to connect in conversation with those at their tables to share some stories. The quiet room full of very active listeners suddenly turned into a room roaring with nostalgic stories from childhood to current challenges faced with their own children. We were all reminded that everyone has a money narrative, and that we all want to see the future generations engaged, educated, and equipped to handle their money decisions in the best way possible.

Nathan left the attendees with five steps for cultivating wellbeing through financial education. One of the five steps encouraged running lots of experiments and highlighting the invaluable insight and knowledge gained from experience. In other words, it is okay to try new things and if those new things didn’t work as planned, embrace the teachable moment and try a different new thing. Another step encouraged being proactive in collaborating with your advisors to create a family roadmap for building financial capabilities, both quantitative and qualitative. At Threshold Group, we stand ready to collaborate with you to start those vital conversations, develop your financial capabilities, and ultimately cultivate wellbeing in your family.

©2016 Threshold Group is a Registered Investment Adviser.
The information provided herein is for information purposes only and does not constitute financial, investment, tax or legal advice. Investment advice can be provided only after the delivery of Threshold Group's Brochure and Brochure Supplement (Form ADV Part 2A&B) and once a properly executed investment advisory agreement has been entered into by the client and Threshold Group.

These materials reflect the opinion of Threshold Group on the date of production and are subject to change at any time without notice. Due to various factors, including changing market conditions or tax laws, the content may no longer be reflective of current opinions or positions.

Threshold Group and any third parties listed herein, including Nathan Dungan and Share Save Spend®, are separate and unaffiliated and are not responsible for each other’s policies, products or services.

[1] The Material Parenting Study
[2] ‘Changes in materialism, changes in psychological well-being: Evidence from three longitudinal studies and an intervention experiment’ 
See Also: ‘Six Steps to Curb Materialism in Your Kids’

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