Okay so here we are. The third and final installment of my interview with Dr. Matthew Bowen. I hope it helps answer some of your questions and inspires you to take a more in depth look into your financial behaviors. Be sure to check out part one, and part two if you haven’t already. Thanks!
I have been working on this interview with my Psychology of Money and Wealth Professor, Matthew Bowen, PhD, to take a deeper look into why we misbehave the way we do with money. He graduated in Berkeley, California in 1986 and is a licensed psychologist.
He is the professor of the Psychology of Money and Wealth classes at PVCC. If you happen to be a local in Charlottesville VA and wish to learn more, be sure to sign up for his classes in the Fall. (Details listed below).
I wanted to go to the “streets” to get my questions because I wanted Professor Bowen to answer the questions that interested YOU.
I asked you, “What you would ask a psychologist specializing in financial behavior if you had the chance?”
As I stated in the the first part of this 3-part series, I received an overwhelming response from you mainly from Twitter. THANK YOU! I always enjoy seeing so much interest when it comes to the behind-the-scenes side, and perhaps the most important component of finance—your financial behavior. What’s causing you to mismanage your money?
Dr. Matthew Bowen
What is it that causes two people that are affected by their decisions with money to ignore or disregard the consequences of those decisions?
Going by the reference to “two” rather than persons per se, I’m going to assume this query is posed by someone in a couple, and that they are effected by a pattern of money behavior that has been less than favorable. People in couples need to begin by trying to take a step back from their couple-ness and understand what they are bringing as individuals to the combined behavior; one of them is going to be the greater influence in financial behavior either positive or negative. Otherwise, as far as the broader implications of this question, the human propensity to disregard the consequences of self-injurious behavior surely applies to the spectrum, and might apply in one person to their relationship choices, health habits and other domains in addition to money behavior. Thus the only approach for understanding and change is a case by case basis; there is no formula that can be conveyed for application to all.
What are some of the mental blocks that prevent people from saving money?
They are as numerous as the realm of possibility in the human mind, however….
a frequently presenting factors is being so accustomed to financial distress that you wouldn’t know what to do with spare funds. Excuse the term, but for so many people, even the slightest amount of financial padding would feel so “ego alien” that they would become anxious. They might feel guilty about having more money than they need to survive (because of intimate others either parental or peer), somehow unworthy of bettering their circumstance, paranoid that others will resent them or want to nibble at their nest egg, and again, so unfamiliar with money as anything other than enough to get through the month that any other form of it–as in extra lying around–makes them just plain anxious.
How does stress contribute to savings and spending habits?
Probably in the negative, as stress lends to desperation and impulsivity in service of relief on the one hand, or immobility and lack of alternative behaviors on the other. And surely this question very much requires a specific understanding of a particular person and the source of their stress.
What mindset changes help someone make positive financial changes?
An invariably slow, steady process wherein you come to a genuine belief you financial circumstance can be better. So it ultimately requires a broad and deep shift in the self, but one or more specific events can kindle the fire.
Can you “think yourself rich” or retrain your brain to help you save money?
To the first part of the question I will respond with a resounding “No.” While financial improvement surely requires at core a shift in one’s thoughts and feelings about their relationship to money, nothing is going to change until a plan is formed, implemented, and stuck with. And while in our society there is an infinite offering of packaged programs by endless experts on how to become financially or otherwise blissful in 12 weeks, the reality is that your brain is as much or more an organ of your feelings than your thoughts, and thus the retrain-your-brain through thinking approach typically lends to short-term optimism and changes that crumple once the old familiar emotional ogre(s) are activated, as they always will be.
Why is it such a problem for people to delay gratification for a greater purpose?
It isn’t for everyone by any means, but it seems for a couple of generations now there has been a great emphasis on this phenomenon as a particularly American syndrome. Personally speaking as middle-aged and so with a sense of both the Great Depression / WW2 folks of my parents generation on one end of my experience, and then the X-Y-Z (or whatever you call it) generation of my step-daughters, I believe that the profound and extended difficult times of the older generation surely shaped a sense of being in service of a greater purpose and knowing one (along with everyone else) was simply going to have to wait it out for better times and peace. I grew up in a time of great social upheaval e.g., the Civil Rights and anti-war (Vietnam) movements (the 60s), with their momentum into the next decade creating the environmental and women’s movements. These were all great and enduring causes that profoundly changed the American consciousness. By comparison to the previous two generations, what greater purposes(s) has the younger generation been subsumed by? The Internet (tongue-in-cheek needless to say)? So I will simply suggest that the lack of exposure to a greater cause during development promotes a lack of there being anything to delay self-gratification for in the consciousness–per se–of those under 40.
In what ways does a persons psychological health affect their ability to earn and create wealth?
This is quite an umbrella question, but it gets to the essence of the matter. A person’s psychological weaknesses in feeling and thinking can undermine their capacity–in every imaginable manner–to stabilize or improve their financial circumstance. As always, it comes down to that person and their circumstances.
From a psychological point of view, what are the most common traits of those who manage their finances well? (Does not mean those who are rich)
This is best answered by including parallel practical requirements:
Sufficient belief in the worth of oneself, adequate self-control / discipline, patience, and the capacity to simultaneously attend to the immediate and longer-term. And last but not least, not only admitting you’re a little greedy, but even allowing yourself to enjoy it as a motivator, rather than a source of guilt.
Does someone really spend more money at the register when they are using plastic as opposed to cash? Do you know of any specific studies that support this?
Yes. I suppose why is intuitively apparent, but one can find a good deal of research done on this by surfing the Net.
Your pocket is literally lighter when those $20 bills cross the counter going in the wrong direction before your very eyes, and that empty space in your wallet was just a moment ago filled by those pretty peas-in-a- pod greenbacks. Human beings are very sensory-perceptual influences creatures. By contrast, swiping a card is an automatic and less involved behavior that doesn’t activate the multi-sensory ensemble of a cash execution. And after you’ve used your card to make a purchase, it’s physical form is unchanged, unlike the after-effect of a cash purchase. Finally, cash runs deeper in the psyche than plastic, because for the vast majority of us we have our first and ongoing early money experience with cash (at least I didn’t swipe a credit card at the lemonade stand).
Part Three Complete…
Dr. Matthew Bowen thoroughly enjoyed answering your questions and is very excited to hear what you have to say. Please continue the conversation by sharing your thoughts, and please feel free to ask any follow up questions you may have related to the questions in this post. What do you think? Have any of the answers surprised you? Do you feel you have any better of an understanding about behavior and money?
Again, if you are a local to Charlottesville VA and want to learn more, don’t forget to sign up for BUS-195 classes starting in the Fall at Piedmont Virginia Community College.
