Newly minted millionaires are being created weekly around fintech and digital currencies, which is forcing many to take a sobering look at their relationship to money. Incredible advancements and opportunities abound around the future of money, but there are also innate risks if we blindly go where the crowd takes us.
Many in society struggle to master their personal finances, and this includes professional financial advisors. You see, you either have a strong desire to control your money and financial life, or you view money as stressful and overwhelming, something to run from and avoid.
These behaviors regarding money are just a couple of the personalities that are formed over the course of an individual’s life. Money behavior is a result of a personality built from direct experiences and indirect stories that are absorbed from the environment you grew up in and the family that raised you.
We call this early adoption around money your money story. A money story is a mixture of your innate personality, your family history, and the beliefs and values that were shared within your family environment. The socioeconomic level you were raised in also influences your money story and financial world view.
My money story was sparked by my fascination with foreign currency that my grandmother would share with me after her periodic travels to Ireland and France. Together, we would study the beautiful bills and the uniquely shaped coins. I would also help my grandmother sort, roll and stack the coins for bank deposit. During these moments, my grandmother would offer sage advice around saving money and investing for future purchases, even pointing out which rings she wanted to gift to whom after her passing. It was like a blue-collar master class on money. Although my grandmother never amassed a huge estate, she could go toe-to-toe with any expert stock broker at the time — just ask my father!
You see, my grandmother had established relationships with multiple key employees at several Philadelphia neighborhood banks. She would get calls from her “girls” at these banks about special promotions that the banks would sometimes run to attract new deposits. Some banks would offer toaster ovens, others would give higher rates for one day only. One time, my grandmother received a “secret squirrel call,” urging her to get down to the bank that very day to open a certificate of deposit. The caller told her that they were running an incredible special, 14% for 5 years. The requirement was that she had to deposit at least $1,000 and keep it at the bank for 5 years. My grandmother told the caller, a girl named Sally, that she would be there as soon as she could. But before she left, she called my father, who was a stock broker at Tucker Anthony in Philadelphia. In her best Irish brogue, she said to him, "Bob, you have to invest any extra monies you have; the bank is giving a 14% on a 5-year CD.”
Dismissively, my dad said to her, “Betty, you’re crazy. I am looking at the Quotron on my desk, and I don’t see any rates that high.” But later that month my grandmother presented my father her actual bank statements displaying three CDs, one for each grandson, all paying 14% for 5 years. That was the last time my father ignored my grandmother when she quoted bank rates.
We all have family stories around money, some fun and harmless, others serious and impactful. And as you can imagine, these money events get absorbed and imprinted on our psyche, both consciously and unconsciously.
In other words, your money story contains rules and closely held beliefs involving money and how best to handle it, and it is these rules and beliefs that guide most peoples’ financial decisions. A person’s money story can be fully formed or in flux, but everyone has a money story, and that story contains the unconscious rules, beliefs and scripts that guide how they view — and acquire — money.
Why then is a money story important? Just this: When you know what your own money story is and how it came about, you can better understand how and why you handle money, because understanding your own money story is the first step in learning how to change your beliefs and behaviors about money and wealth. Simply put, knowing your own money story empowers you to better manage and control your finances.
Can a person improve or change their money story? The short answer is yes. But making such a fundamental, sustainable change comes only after an individual first identifies and then challenges their previously held beliefs about money.
Examining one’s own money story doesn’t require a person to stretch out on a couch and talk with their financial therapist, but it can commence with the following simple hack, namely, changing a specific financial behavior or even creating a new money story. You can do this by establishing new rules for how you interact with money.
At the PNC Hawthorn Institute for Family Success, our team walks our clients through several exercises to help them explore their own money stories as we help them address areas that need improvement. From our experience in working with family businesses and families of wealth, we have found that awareness of one’s money personality and money story is key to building and maintaining financial harmony within families.
Additionally, you need to know that our PNC Private Bank advisors go through these same money story exercises themselves. We do this because we believe that it helps our advisors to know firsthand how money stories develop and how these stories can influence a person’s financial decisions.
A second reason we put our advisors through this training is to ensure that they don’t unwittingly bring in limiting beliefs or biases from their own money stories, biases that can interfere or disrupt the client as well as the client–advisor relationship.
In conclusion, we appreciate how your understanding of — and improvement of — your money story is vital to your financial behavior and overall financial health and success, and we help you to both recognize and improve your personal money story.
The PNC Financial Services Group, Inc. (“PNC”) uses the marketing names PNC Private BankSM, PNC Private Bank HawthornSM, and Hawthorn Institute for Family SuccessSM to provide investment consulting and wealth management, fiduciary services, FDIC-insured banking products and services, and lending of funds to individual clients through PNC Bank, National Association (“PNC Bank”), which is a Member FDIC, and to provide specific fiduciary and agency services through PNC Delaware Trust Company or PNC Ohio Trust Company. PNC does not provide legal, tax, or accounting advice unless, with respect to tax advice, PNC Bank has entered into a written tax services agreement. PNC Bank is not registered as a municipal advisor under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
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