“Don’t worry that children never listen to you; worry that they are always watching you.”

– Robert Fulghum

Shawn B. Young39th Annual NHSA

ConferenceApril 17th 2012

Nashville, Tennessee

Most Common Reasons1. Want to “stick to a budget”

2. Want to “save”

3. Want to improve their credit

4. Want to be less stressed about money

Bootstraps and Head Start

Money

Stress

Health

75%of Americans say that

money is their biggest stressor,

according to survey by the APA .

80%of all medical

expenditures are stress related,

according to the CDC’s estimates.

Health related debt is the number one cause of personal bankruptcy in the U.S. according to a

2007 Harvard University Study.

Rule #8: Stressed brains don’t learn the same way.

•Your brain is built to deal with stress that lasts about 30 seconds. The brain is not designed for long term stress when you feel like you have no control.

•Stress damages virtually every kind of cognition that exists. (Memory and executive function, motor skills, immune response, ability to sleep)

John Medina, Brain Rules

Rule #8: Stressed brains don’t learn the same way.

•You have one brain.

•The same brain you have at home is the same brain you have at work or school.

•The stress you are experiencing at home will affect your performance at work, and vice versa.

John Medina, Brain Rules

Short-Term Stress Can Affect Learning and Memory

•It has been known that severe stress lasting weeks or months can impair cell communication in the brain’s learning and memory region…

•A new study shows that short-term stress lasting as little as a few hours can impair brain-cell communication as well.

ScienceDaily (Mar. 11. 2008)

Money and Stress•Finances play one of the biggest roles in

a person’s day-to-day stress.

•Stress, as it turns out, is one of the biggest factors in a person’s health.

•And health is one of the largest burdens on personal finances!

Top 3 “Stress Related” Diseases•Obesity•Cardiovascular Disease•Diabetes

Obesity in America: Healthcare Costs Double Previous Estimates

•An obese person’s medical cost is $2,700 higher than a non-obese person.

•Nationally the costs associated with obesity costs $190 billion annually and account for 20.6% of all national health expenditures.

Business & Health (April 9th 2012)

Cardiovascular Disease•The estimated direct and indirect cost of

cardiovascular disease for 2010 was $503.2 billion in the U.S. (American Heart Association)

•The average cost of care for a patient up to 90 days post-stroke is $15,000. (The University Hospital, “Stroke Statistics”)

Diabetes•In 2007, diabetes cost the nation an estimated

$174 billion. Currently just under 1 in 10 Americans has diabetes. (American Diabetes Association)

•A 50-year-old person just diagnosed with diabetes has medical expenditures that are $4,174 higher than an identical person without diabetes with an annual average increase of $158. (American Diabetes Association)

Students & Financial Stress•Out of 14,500 students from 15 different

colleges, financial pressure was the number one reason these students dropped out of their four year college. (Larry Chiang, 2007)

Employees & Financial Stress•Personal finance is the #1 personal issue

causing stress in the workplace. (ComPsych printed in USA Today)

•Up to 40% of employees report stress over personal finances which leads to lost productivity, increased absenteeism, and a loss of job satisfaction and motivation. (Garman, Leech & Grable)

Definition of Stress• The non-specific response of the body to

any demand for change. (Hans Selye)

Two Kinds of Stress…• Acute Stress: is experienced in response

to an immediate perceived threat, either physical, emotional or psychological.

Two Kinds of Stress…• Als0 called Fight-or-Fight Response.

• Early human survival depended on this response.

Stress and the Body• Stress causes the body to release the

hormones Adrenaline and Cortisol and other stress related hormones.

Stress and the Body• Increased levels of Cortisol, Adrenaline

and other hormones produce:

An increased heart rateQuickened breathing rateHigher blood pressure

Two Kinds of Stress…• Chronic Stress: is a state of ongoing

physiological arousal.

• Over time this can wear down our bodies and cause us to become ill, either physically or emotionally.

• We were built to handle acute stress, not chronic stress.

OK – So money is the number one cause of stress…

then…

What is Money?

What is Money?•Money is simply a tool.

What is Credit?

What is Credit?•Credit is trust.

Available credit

Promise to pay later

Credit Report•Is a history of what you have done or have

not done.

What is an Asset?

What is an Asset?•An asset is simply something of value to you.

1.

Tangible and Intangible Assets•What is the difference between tangible

and intangible assets?

1.

Tangible

Intangible

house

car family

health

1.

1. Azoreg

Tangible and Intangible Assets•What are three tangible assets you have

now?

•What are three intangible assets you have now?

1.

Time

Energy

Environment & CommunityFriends & Family

ACCESSIBILITY

• Growth• Protection• Retirement

Income

• Growth• Protection

Savings & Investing

Asset Building Continuum

•Nutrition•Prevention•Management

Health

•Emergency•Renting•Buying

Shelter •Academic Education

•Life Education

•Civic Ed

Skills & Education

Asset Building Continuum

Traditional Financial Education

Barriers•Income, money and time are frequently

considered the primary barriers to achieving our goals. Generally speaking, what are the barriers

to increasing income and money? How does our allocation of time hinder

our progress towards our goals?1.

Improving your financial position will come from the creation and maintenance of ASSETS and not merely an increase in income.

Sharp Right Turn

What is a Personal Value?

What is a Personal Value?•Something important to you.

•“Ideals by which you live your life.”

Affection

Growth

Community

1. Frank Wouters

1.

Exercise: Personal Values• Please circle your top ten Values from the

list. Achievement Advancement/Promotion Adventure

Affection (love & caring) Arts Problem solving

Change & Variety Relationships Community

Compassion Cooperation Competition

Country Creativity Decisiveness

Democracy Faith Economic Security

Education Effectiveness Efficiency

Ethical practice Excellence Excitement

Fame Financial Gain Friendships

Growth Family Fun

Helping others Public service Health

Independence Influence Harmony

Peace Integrity Intellectual Status

Job security Knowledge Leadership

Location Loyalty Meaningful work

Money Nature Sobriety

Personal Development Freedom Physical Challenge

Pleasure Power Authority

Privacy Recognition Religion

Survival Responsibility Security

Self-Respect Serenity Stability

Status Time Fashion

Wealth Wisdom Acceptance

Balance Cleanliness Courage

Commitment Dedication Humor

Consideration Self Mercy

Fairness Tolerance Patience

Selflessness Flexibility Forgiveness

Kindness Convenience Control

Honesty Spirituality Truth

Reputation Joy  

Exercise: Personal Values•List your top five personal values in no

specific order. 1. 2. 3. 4. 5. 

Are Values Fluid?• Then vs. Now

EducationFunFreedomKindnessCourage

Family Job

Security Health Patience Influence

Personal Behavior•List one personal behavior that supports

each of your above listed values:

Personal Value: Health

Personal Behavior: I exercise 3 times a week

Exercise: Personal Behavior• We all have things that are important to

us but we all do things that are not in alignment with our values.

•It is a human condition.

Exercise: Personal Behavior•List one personal behavior that

contradicts each of your above listed values:

Personal Value: Health

Personal Behavior: I ate a dozen donuts this morning

Behaviors and Values•Remember, money is simply a tool.

•And our values drive our behavior around money.

•We decide what we do with our money.

Exercise: Wants and Needs• Make a list of your current wants and

needs:  WANT

1.   

2.   

3.   

4.   

5.   

  NEED

1.   

2.   

3.   

4.   

5.   

Wants and Needs• What is the difference between a want

and a need?Usually comes down to survival.

Wants and Needs•How do you determine what your wants

and needs are?

“I want a new car.”

“I need a new car.”

Wants and Needs•When a “want” turns into a “need” it adds

stress.

“I want new shoes.” “I need new shoes.”

+ stress

Wants and Needs• What are some influences on determining

your wants and needs?

Message in Our Head•Clip from “The Colbert Report”

The Message in Our Head•Marketing: The systematic planning,

implementation and control of a mix of business activities intended to bring together buyers and sellers for the mutually advantageous exchange or transfer of products. All the strategies used to get you to behave

in a certain way. Example: Humane Society Commercials

The Message in Our Head•Marketing:

•Advertising:

All strategies used to get you to willfully give up your money.

One strategy used to get you to willfully give up your money.

The Message in Our Head•How much is spent on marketing per

year?

$4 000, 00 0, 000•and they intend to get their money back.

0,0

The Message in Our Head•“By the time we reach the age of sixty-six, most of us will have seen

approximately two million television

commercials. Time-wise, that’s the

equivalent of watching eight hours of

ads seven days a week for six straight years.” (Buy-ology, p. 37)

The Message in Our Head• In 1971 the average American was

exposed to at least 560 advertisements per day.

• The average U.S. consumer receives roughly 1 million marketing messages a year across all media, or about 3,000 messages per day.

1. David Shenk, 1998

2. John Hagel III and Marc Singer, 1999

Marketing aims to…•Create a want where none existed.

•Turn a want into a need.

“You know, those shoes are pretty nice, I want them.”

“Those shoes are so nice, I need them for this weekend.”

Example: Cell phones• Cell phones circa 1980s

Example: Cell phones• Cell phones today

Message in Our Head• Big Pharma Spends More on Advertising Than

Research and Development.

• Estimates are as high as $10 billion spent on advertising all types of food and beverages to America’s children and youth. (Only 5% are for healthy foods/beverages such as dairy products and fruit juice. None are for fruits and vegetables.)

• Kids in the United States see 40,000 commercials each year.

3. American Academy of Pediatrics

2. Colorado State University

1. Science Daily, York University

Message in Our Head•Under the age of 8, most kids don’t

understand that commercials are for selling a product.

•Under the age of 6, unable to distinguish program content from commercials.

* American Academy of Pediatrics

Message in Our Head•Q: Why do marketers spend so much time

advertising to kids?

•A: Imprinting Before 7 years old, marketing messages

will have an impact on the way the kids will behave in the future.

Neuromarketing•An emerging field in marketing which is

focused on appealing to you at the subconscious level.

(Not subliminal advertising: Pictured Below)

Neuromarketing•Marketing: you know that they are directly

asking you to buy something.Example: Car commercial.

•Neuromarketing: they influence you without directly asking you to buy something.

•Can you describe an instance when you noticed “Neuromarketing” at work?

Neuromarketing•Marketing to the subconscious.

Example: At the grocery store.

Neuromarketing•Example: Cinnabon at the airport.

* Btotanes 2010

Neuromarketing•Example: Colors

Red: Energetic, HungryWhere you’ll see: Logosand calls to action

Blue: Secure, TrustworthyWhere you’ll see: Money and business related websites (banks, loans, etc.)

Deep Green: Stable, WealthyWhere you’ll see: Testimonials,Founder’s stories, etc. Light Green: CalmWhere you’ll see: Entertainment and leisure related websites

Orange: Enthusiastic, CheerfulWhere you’ll see: Calls to action (subscribe, buy, etc.)

* Ann Smarty, 2009

Neuromarketing•Example: Product Placement

* Wayne’s World, Photograph: PR

Message in Our Head•Clip “Shameless Product Placement on

TV”

1.

Message in Our Head•Chess Analogy:

If I know the rules and you don’t, I’ll win. If there is money on the table, I’ll take that too.

Values and Behaviors•We all have things that are important to

us, we all have our values.

•But we sometimes do things that are not in alignment with our values.

Values and Behaviors•Example: “I’m a good person, but I

robbed a bank.”

•How do I make sense of that to myself?

“I didn’t hurt anyone.”“The bank has insurance, it’s okay.”“The world owes me.”“I did it to take care of my kids.”

“I’ll never do it again.”

The Impact

DESIRED RESULT

BEHAVIOR

PERSONAL VALUE

JustificationRationalizati

onDenialBlame

Cognitive Dissonance• If you’ve ever said…..

“Well, it was only $2.”

“It was on sale!”

“I deserve it.”

“Just this once, I won’t do this again.”

“It’s Friday.”“It’s Monday.”

“It’s my birthday.”

“It’s their birthday.”

“It’s the weekend.”

“I’m stressed out, I need this.”

“It’s a gift.”

“It probably won’t be here later.”

80% of Spouses Lie About SpendingSecret spenders have hidden credit cards, bank accounts and debts

• Majority with secret credit card don’t tell in order to…Avoid an argumentOr to pay it down before the big reveal

• Some of the secret spending is so serious that 38% of married couples surveyed stated in a press release that they were “concerned the revelation of their secret spending would result in their spouse seeking divorce or separation if he or she were to find out.”

Chris Friedrich, August 2010

80% of Spouses Lie About SpendingSecret spenders have hidden credit cards, bank accounts and debts

• Typical Secret Purchases include:Clothing and accessories: 34.5%Food and dining: 24%Beauty and personal care items: 19.5%Gifts: 16.5%Alcohol: 13%

• 59% of consumer did not know their spouse’s credit score, and only 30.5% of all respondents checked their credit reports once a year.

Chris Friedrich, August 2010

Moment:

Where you make the decision

Thought or

Impulse

• In that moment all of the marketing and advertising is trying to help you justify or rationalize your thoughts and impulses to spend spend spend.

• Even if it is not in alignment with your values.

DESIRED RESULT

DESIRED RESULT

Moment:Where you make the decision

Thought or

Impulse

Consumer Debt•As of November 2011 Americans amassed

$2, 700, 00 0, 0007,

7in personal consumer debt*

*Federal Reserve

4

This is what we haven’t paid for yet.

Consumer Debt•Amount of credit card debt:

$749,100,000,000

*Federal Reserve

Consumer Debt•609.8 million credit cards in US.

•Average credit card debt per household with credit card: $15,799.

•Average APR on credit card with balance on it: 13.10% as of May 2011.

*Federal Reserve

Consumer Debt•Amount of student loan debt:

$976,656,828,135

*Fastweb and FinAid

As of February 2, 2012*

Consumer Debt•The amount of student loans taken out in

2010 was over $100 billion.

•Two thirds of the undergraduate class of 2010 graduated with student debt, at an average of more than $25,000 per student.

•Total student loan debt is increasing at a rate of about $2,853.88 per second.

*Federal Reserve*Projectonstudentdebt.org

*FinAid

Debt

*Student Debt (Mother Jones)

Debt•The amount of mortgage debt:

$10,300,000,ooo,ooo

*Bureau of Economic Analysis

In Summary•Marketers spent:

•Consumer’s DEBT:

$400,000,000,000.00

$2,477,700,000,000.00

US National Debt• The outstanding Public Debt as of April 12th 2012:

$15,633,810,755,214.03

•The National Debt has continued to increase an average of $4 billion per day since 2007.

*National Debt Clock

US National Debt•The estimated population of the US is 312,572,349 so each citizen’s share of this debt is $50,016.61

• Number of US Income Taxpayers is 112,583,135 making the share of debt rise to $138,864.59

*US Census*National Debt Clock

That’s a serious amount of debt…

…and debt = A WHOLE LOTTA STRESS!!!

Spending and Stress• Researchers say that it takes as little as 2.5 seconds to make a purchasing decision.

•“When we first decide to buy something, the brain cells that release dopamine secrete a burst of good feeling and this dopamine rush fuels our instinct to keep shopping even when our rational minds tell us we’ve had enough.” *Michael Lindstrom

*Moneywise, 2010

Short vs. Long Term

Short Term

Long Term

dopamine

cortisol

Short vs. Long Term• In the short term we are deciding to

spend our time and money somewhere, which makes us happy.

• In the long term we are creating stress and debt for ourselves and when we create debt we are agreeing to give up future time….

How Stress is Defined and Measured:• Aroused physiological response to stress.

Ex. Increased heart rate, quicker breathing.

• Stressor must be “perceived” as aversive . We want to avoid the thing causing stress

because it is unpleasant.

• Person must not feel in control of stressor.

*John Medina

Different Responses to Stress• If two people are in the exact same

stressful situation, do they respond the same way to that stress? Most likely they do not have the same

response. One might be better able to deal with the

stress.

Different Responses to Stress• What does that mean about stress if people

have different reactions? Stress is subjective. It means something different to each one of us.

Different Responses to Stress• How are our perceptions about stress

shaped?

• How much is within your control?

• Is it possible to change?

Different Responses to Stress• If you want to improve your economic

situation but you do not feel you have control over your stressors, it will have an impact on many areas of your life such as: Your ability to learnYour productivityYour relationshipsYour healthYour finances

HOW DOES THIS AFFECT OUR CHILDREN?

&WHAT ARE WE GOING TO

DO?

Your Stress• Please write down one reoccurring

stressor in your life.

Your Stress• What about your perception of the

stressor could be changed?

Your Stress• What within the situation could you

control or change?

What is a Habit?

Habits

•Habit: an acquired behavior pattern regularly followed until it has become almost involuntary.Ex: Looking both ways when crossing the

street.

What is the purpose of a Habit?

Habits•The purpose of a habit is cognitive ease.

Your brain has to do less work.

How do we change a Habit?

Habits

Habits

Making Change•“If we keep doing the same thing we’ve

always done, we can expect to get the same things we’ve always got.”

•Definition of Insanity: doing the same thing over and over and expecting different results.

Stages of Change(Prochaska and DiClemente)

Stages of Change• Q: How do we get from pre-contemplation

to contemplation?

• A: Shift in values. (Gotta Wanna)

• Example: An event triggers a change in values.A child is born: I valued smoking, but now I

value my child’s health.

Tools for Change

Goal Setting

Goals and Values Sheet

Spending Behavior•Receipt Exercise

•Spending JournalDate Item or Bill Cost Payment Method6/11 Rent

Soda$750$.79

CheckCash

6/12 Pizza $12.00 Debit

BudgetIncome Source

Gross (Total Amount)

Taxes, Insurance, &

Benefits

Net (Gross minus taxes, etc.)

T.V.

1.        2.        3.        

Expenses Expected Actual Difference T.V.

Savings/ Investments        Food        Housing        Medical        Transportation        Health Insurance        Car Insurance        Life Insurance        Clothing        Household Items        Convenience Foods        Entertainment        

Monthly Asset Plan with Asset Building Continuum

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