Financial Success Means More Than Money
It’s about the money, yes, but financial success is also about what Commonwealth calls having a “financial security mindset.”
Hello Talking About Money Community, how are you?
This post is inspired by a December 2020 report published by Commonwealth called Money, Mindsets & Systems: A New Framework for Positive Financial Futures. As I sat listening to the webinar that introduced this report, I thought back to a matched savings program that I led a few years ago that quite by happenstance featured a few of their key findings.
Was this a coincidence, you might ask, or did the stars align intentionally for success? We’ll never know…
But first, a little about my involvement this program:
I was hired to run the monthly workshops and oversee operations for a year-long matched savings program serving a small town about 2 hours from where I live. I applied for the position because I read the job description and had this feeling I could help. Do you ever get that feeling?
This I explained enthusiastically to the organization’s directors over lunch at their local diner. “But why would you want to drive all the way out here and help us,” the staff asked. I really did not have a great answer for that (and quite frankly, I hate driving) other than I liked their energy and I wanted to be of service.
Their one reservation, as I remember from our conversation, was that I was from “the big city.” Because of this the staff had trepidations that the participants would not accept me. They explained to me that outsiders had come to their town and tried to explain to the locals their own life experience back at them, and this led some people to distrust people from “away.”
With this apprehension shared and with my reassurance that I would indeed be able to relate to the participants (would I?) they decided to take a chance on me, someone from the big city who drove two hours to explain over a diner lunch that she was interested in helping the residents of their small town.
This turned out to be such a great gig that I made that monthly two-hour drive (four hours round trip!) not for one year, but again a couple years after that, working with two different groups of savers.
And what came about in that matched savings program had the attributes of what Commonwealth calls a “financial security mindset,” as participants:
Viewed their financial security as a journey with them as the hero
Recognized the importance of following their own values and aspirations
Developed financially secure social networks that increased their odds of success
Let’s take a closer look at each of these, one by one.
Your finances are a journey, and you are the hero of your story
One interesting finding of Commonwealth’s report was that the imagery of a journey came up time and time again among the people that they interviewed. This infers that your client’s success is not going to magically materialize in one session with you, and most likely not in two sessions either.
In this matched savings program, we met once a month for 12 consecutive months. In a way, each meeting was another chapter in the participants’ journeys. In some months clients shared stories of success: a new job, a credit issue tackled, a tough financial negotiation that ended in a win. In other months clients shared stories of challenge: losing a place and having to couch-surf at a friend’s home with their young daughter, a major order for their small business falling through (taking with it the month’s income), or another car break-down.
By the end of the 12 months together, most of the participants had also experienced successes that they were proud to share. I will never forget one of these stories: One participant – let’s call her Lucy – came faithfully to each monthly meeting. She was a single mom juggling a full-time job and college classes in the evening. She must have been so exhausted, yet she always showed up with a smile on her face. Lucy was so sweet; I really liked here. During some sessions she shared her challenges with money, frequently ending with a shrug of her shoulders and an “oh, well.”
A few months after the program was over, the staff shared with me Lucy’s hero’s journey.
Lucy’s savings goal was to buy a reliable car to shuttle between work, school, and her kids’ activities. The old one kept breaking down and had to go. Once she saved what she needed and earned her match, she started shopping for a new-to-her car. Once she found what she wanted she approached the dealer to make the purchase. He looked at her and quoted his price. She lifted her head up and responded, “Nope, that’s not going to work for me. I’ve got this much today and it’s in cash and you are going to sell that car to me for this amount.” Period. And you know what? He did.
Your values and aspirations guide which direction you take
Each of the monthly meetings had a theme, and the theme of Month #1 was “Your Values, Your Goals, and Your Success.” In this introductory meeting we discussed the factors that shape people’s attitudes around money, like childhood experiences, age, the people around you, social pressure, and your mood.
In this first session, something remarkable happened.
As the conversation ensued, one of the participants – let’s call her Sue – went silent for a few moments, and then spoke up. “You know,” she started,” I never realized this connection until right this minute. When I was growing up I had an uncle who had more money than the rest of us. Other family members talked about him behind his back that he might have amassed his wealth by nefarious means. So growing up I always associated money with something that was bad.”
Sue went on, “So when I grew up and some money came into my hands – maybe a tax refund or something else big – I would want to get rid of it as quickly as I could. I didn’t want to be seen as ‘bad’ for having money. And I am just realizing this as we are having this conversation. There is nothing inherently bad about saving money; it’s just the lesson that I grew up with. This is amazing!”
After this epiphany, Sue bloomed. She contributed to her matched savings fund and opened additional savings accounts for her daughter and granddaughter, after years of having no cushion. She reorganized her business to attract more customers and generate more sales. She considered buying a home. She made plans for her future in ways that she had never done before. Her entire life changed.
The people you choose to have around you support your success
Another constructive element to this program was its size: Only 6 participants showed up to take advantage of matched savings and financial education each time the program was offered. While at first we were a bit disappointed with the results of our recruitment efforts, what these groups lacked for numbers they made up for in community-building.
Here is where my identity as a “stranger” turned out to be beneficial to the group. While I could guide conversations on the tenets of sound money management, I was not able to advise on what resources were available right outside their doors. Since I was not from there, I had to lean on the participants to teach me what they knew about getting by in their small town.
The unintended benefits were many. While in their eyes I was a financial education “expert,” I was not an expert in the microcosm of their community. As the months went on and they got to know each other better, mutual trust grew and they shared resources with one another. The hard-earned tips and tricks for managing their households that they had amassed over the years were now lessons that they could share with their peers. And as their sense of community grew, their confidence grew as well. They came to understand their own agency and their ability to succeed.
There was a happy ending to each of these programs. The six participants in the two cohorts (twelve participants in all) all reached their savings goals and invested in assets like vehicles, their education, or in growing their small businesses. Beyond that, they proved to themselves that:
They were indeed the heroes in their own journey
Recognizing and aligning their values with their actions was a recipe for success
They could serve as role models to others as much as others served as role models for them