Thursday, March 12, 2009

Personal Finance Coaching

In years past, most families would have put "develop healthy financial habits" on the "nice-to-do" list but certainly not on the "must-do" list.

My, what a few bank failures and a tanking economy will do to shift financial priorities.

If only it were that easy -- just a few behavioral tweaks and then everything will be good-to-go. In fact, families and their financial advisers are realizing that learning new ways to relate to money is difficult -- especially now that money is tight for so many. A few recent statistics illustrate my point:
- 75% list money as the No. 1 source of stress in their lives (American Psychological Association).
- One in four Americans are seriously distressed about their financial situation (Thomas Garman, Virginia Tech).
- Credit-card debt per U.S. household averages about $9,000 (Department of the Treasury).

Lately I've been speaking to people about the importance of having a good defense when it comes to your finances. Whether it was a large group of corporate employees, successful entrepreneurs and their families, or attendees at a regional community foundation conference, I've noticed several new themes emerging from the folks in the audience.

People are eager if not anxious in their quest to adapt to this "new normal." Specifically, they're asking for ideas and guidance on rebalancing the family budget, discussing a job loss with a child, setting short-term and long-term money goals, creating spending boundaries for everyone in the family, and keeping a philanthropic focus in an increasingly challenging environment.

In the haze of stock market run-ups and the housing bubble, most adults, regardless of socio-economic status, forgot the personal-finance basics. Now more than ever, investors need guidance and wisdom to help them rebalance their money habits -- not just their retirement portfolio. They need a good coach to help them play defense in an increasingly volatile economic environment, and to focus them on things they can control.

Lack of attention to the fundamentals is a big part of what got us into this mess. So seize the day and navigate the new normal by reconnecting with the basics. Here are three discussion topics that both investors and financial advisers should find valuable:

1. Refocus core money values - Look closely at your past habits to avoid making the same mistakes. Check out a one-page exercise for adults and young people called My Money Plan that you can download for free from the Share Save Spend Web site.
2. Come clean about spending - Use the information from Step One in My Money Plan as a springboard into an honest talk about financial habits. This can be accomplished by doing a 30-day expense-tracking exercise (and yes, credit card charges count). I call this the "Truth Tonic." It will do wonders to help determine where adjustments need to be made to spending behavior.
3. Involve the entire family - A good relationship with money is not just an issue for adults. Children also need help in developing a healthy attitude about financial matters.

Remember, it's always easier to instill healthy money habits in a young child than it is to unravel unhealthy habits in a young adult.

[from Market Watch]

Is Your Church On It's Way To Extinction?

A church consulting colleague of mine, Bill Tenny Brittian, recently posted the following:

I suppose I shouldn't be surprised, but over the past several weeks I've been hither and yon across the country training church leaders in evangelism and church transformation. One would think with the way things are that leaders would be ready to hear what’s working. But by and large, that’s not the case. And the more European the denomination, the more push-back we get. I’m finding that the worse off the church becomes, the more church leaders seem to “need” to cling to something for stability and comfort … and that something is almost always tradition. Whether it’s traditional worship style, traditional doctrines, or traditional thinking, it’s clear that Tevye was right … tradition keeps the fiddler on the roof (with images of Rome burning flitting through my mind) and it keeps the church on track to irrelevance and all too many local churches to extinction.

This week, the ARIS came out - the America Religious Identification Survey from Trinity College in Hartford, CT. If you’re waiting for good numbers, you’re going to be disappointed. Christianity in North America is it a flat spin, which is significantly worse than a tailspin (just ask a jet pilot).

- The percentage of “Nones” (no religion) has risen from 8.2 percent in 2001 to 15 percent in 2008. The percentage of “Nones” has grown in every state of the Union.
- The percentage of people claiming to be Christian has plummeted from 86.2 percent in the 90s to 76 percent - and 90 percent of that decline comes largely from the mainline. Notice, that’s a full 10 percent loss in less than twenty years.
- The mainline lost enough members that they've gone from 18.7 percent of the population in 1990 to only 12.9 percent.
- Even the Baptists are shrinking, in terms of percent of the population. On the other hand, the Mormons are growing enough numerically that they’re keeping up their “market share” at 1.4 percent of the population … a number that is now greater than those who claim to be religiously Jewish (at 1.2 percent).
- A full 12 percent of the population are philosophically atheists.

The news is, shall we say, pretty grim. There is some good news … sort of. The number of those attending mega-churches has literally skyrocketed from less than 200,000 in 1990 to over 8 million today. Of course, a good number of those attending these mega-churches have left the small membership churches. Which is one of the reasons it’s so frustrating being a church consultant in these times. Churches are hunkering down. Church leaders are more married to their church traditions and antiquated priorities that they'd rather let their churches die than do what it takes to stem the hemorrhaging.

So, what did I teach at these training sessions that was so abhorrent that church leaders were metaphorically clapping their hands over their ears?

1. Church transformation must be built on a spiritual foundation - and a spiritual foundation isn't based on some prescribed set of denominational tenets, but upon practicing discipleship (Bible reading, prayer, faith sharing, encouraging one-another, etc.).
2. Church leaders must lead in these spiritual practices if they expect the congregation to follow. If the pastor isn't spending time with the unchurched and sharing their faith with them and bringing them into worship, the congregation isn't going to. Indeed, according to the above figures, it’s clear that most mainline congregation’s are already following their pastor’s example … and they’re following it very well.
3. Church leaders cannot allow conflict to go unresolved. Conflict isn't going away on its own, so pastors are going to have to get a backbone, step up, and deal with it (see the many posts I've written on resolving conflict).
4. Church leaders must shift their focus from teaching to discipling. Discipleship is 90 percent behavioral and 10 percent right thinking, not the other way around. We won’t turn these trends around until Christians start acting like Christians in church, at home, at work, in school, when making any decision about anything - but particularly about how they spend their money and how they spend their time.

And there were other things, but these were the offending key points … and the two most heinous were (1) Pastors have to model, not just tell everyone what they need to do, and (2) Teaching all those doctrinal points are mostly a waste of time. Nobody outside the church really cares about reformed theology. What they’re looking for is a religion that actually changes lives and is so life-transforming that it’s worth giving their lives to.