Excerpts from Self Care Spending for “Moneyish”, Dow Jones and Co.

August 9th, 2018

Americans spend a whopping $143,280 over their lifetime to treat themselves, but are more likely to feel guilty about buying material goods than experiences, a new study finds.

  • Funto Omojola

Americans really care about self-care.

The average American spends $199 a month — 22% of their disposable income, or about $2,388 a year — on non-essential items to “treat themselves,” according to a recent surveyby ticketing platform Eventbrite and research company OnePoll. Those younger than 25 reported spending even more of their disposable income (33%) on material items or luxury experiences. And 62% of people reported wanting to treat themselves even more than they currently do, according to the survey of 2,000 adults.

“Many Americans feel spent because they work hard and seem to feel like they never get ahead,” Kathleen Gurney, president of Financial Psychology Corp., told Moneyish. “So spending money on ‘treating themselves’ gives them that momentary lift and good feeling.”

But women seemed more prone than men to buyer’s remorse: Sixty percent of women surveyed admitted that they felt guilty after buying material items, while under half (47%) of men did.

“Women, in general, are more aware of their feelings and tuned into their emotions,” said Gurney. And because of this difference, she added, many women report making impulse buys that feel good in the moment but then end up having feelings of guilt in the aftermath.

“Being self-aware and mindful of the cost, both financially and emotionally, is essential to feeling a sense of well-being and contentment with how we’re managing our money for both the short-term and long-term,” Gurney said. “Self-education, planning and being aware in the moment allows us to treat ourselves with our money without sacrificing our sense of taking good care of ourselves.”

© 2018 Dow Jones & Company, Inc. All Rights Reserved

Kathleen Gurney consults with individuals, financial professionals and institutions.  You can contact her at info@financialpsychology.com and 941-346-7558.

How to Stop Lying To Yourself By Rhea Wessel on BBC Capital July 11, 2016

July 20th, 2016

Newly divorced, Eleanor Bain thought she’d finally met the man of her dreams. She was in a new city, looking for a new job and starting a new life with her two daughters, when she fell in love, or so she thought.

It’s like a boomerang, when you suddenly realise that this is not so peachy
But along with the positives of shared interests, there were plenty of negatives. Sometimes the pair ended up screaming at each other for hours on end.
Looking back, Bain says she was in denial about the relationship. “It’s not that you don’t want to see it,” says Bain. “You don’t see it at all.” She wouldn’t hear it when friends hinted something might not be working. “I did everything to convince them that he was the man of my life.”
Why do we do it? Self-deception is a tool for protecting yourself from painful facts. It’s why we claim to be honest but break the rules anyway; tell ourselves we want something like a financially secure retirement but consciously construct the opposite, or stick with a company even when we’ve been passed over for a promotion at work.

Are you fact-resistant? You may be in denial.
Delusion may make day-to-day living easier, but it usually comes at a price, according to Cam Caldwell, a visiting professor of management at Purdue University North Central, Indiana in the US, who has been researching identity, self-awareness and self-deception for decades. He defines self-deception as “the holding of two conflicting ideas without acknowledging the conflict.”
The price for deceiving yourself includes the risk of alienation, when you lose your ability to connect with others because your devotion to your own view of reality is greater than your interest in the truth, Caldwell writes in an academic paper, citing American psychiatrist M Scott Peck.
For those who want to avoid burying their heads in the sand, ask yourself this question: What’s worse – a little bad news about your actual situation, or a ‘business as usual’ approach that leads to a train wreck for your partnership, your money or your career? While facing up to denial can be a struggle when it comes to matters of the heart, not tackling the problems can affect all aspects of your life.
When it doesn’t add up
Most of us are guilty of denial at some stage in our life. Consider your finances. You’d assume numbers on paper are facts that aren’t open for interpretation. But when self-deception and wishful thinking come into play, that’s not always the case, said Kathleen Gurney, the CEO of Financial Psychology Corporation, based in Sarasota, Florida.
She has even seen financial advisors unable to see the plain truth, despite the depth of their technical knowledge about money management. She mentioned one advisor unable to see the risk of losing his house due to missed mortgage payments. Other clients have refused to see the impact of credit-card debt strung out over years, Gurney said.

Self-deception has distinct stages and can become chronic.
“Self-deception has distinct stages and can become chronic,” Gurney said. The first is simple denial of unpleasant facts, like you are bouncing cheques or are regularly late on bills.

If you ‘see no evil, hear no evil, speak no evil’ can you convince yourself that everything’s fine?

A second form of denial is minimisation. In this stage, the person admits the fact, but claims it’s OK and rationalises the action. “It’s true (this is happening), but as long as I keep enough money in there, I’m not going to bounce any cheques.”
A third form of denial is projection. This is when you admit the problem but shift responsibility for it. “I know, but it’s really not my fault because I’m so busy and I have several jobs…”
Gurney’s advice: Consult with a friend or a professional to analyse what’s working in your finances and what’s not. “Keep asking the questions to yourself until you come up with answers.” Another idea is to take a psychological evaluation to determine your money personality to give you greater insight into your own behaviour.
More ideas: Make a chart that juxtaposes what you say you want versus what you actually do, or as Gurney suggests, write down emotions you have about your finances on cards, pile them up and see if you can spot a trend.
The writing on the wall
Self-deception is not limited to finances and relationships. It also plagues many people throughout their careers. Here again, it’s quite easy to let wishful thinking replace a sound assessment of the facts. That’s what happened to a client of Nadine Gimbel, a career coach in Frankfurt who is sales manager for RF/F Raum Fuer Fuehrung, a consultancy which supports organisations and management with change processes.

Life includes change, and we often hold on to things because we’re afraid. Usually we only regret the steps we didn’t take.
One woman she helped was a mid-level executive at a major German bank who complained about not being promoted, despite long hours and hard work. The woman, in her early 40s, had only a vague idea of where she wanted to go and why she wanted to go there. She was also waiting around for someone to notice that she was doing a great job. This self-imposed blindness had kept her career stagnant.
“She was fooling herself by thinking that someone else had to discover her,” said Gimbel, who worked with the woman on articulating what she wanted and communicating that to her boss. “She did this and the boss realised where she was coming from.”
Gimbel’s suggestion to those who are avoiding the writing on the wall at work is to first get clarity on what you really want. Then take responsibility by taking the necessary actions, such as communicating what you want or leaving a job that’s not working. “Life includes change, and we often hold on to things because we’re afraid,” Gimbel said. “Usually we only regret the steps we didn’t take, or the changes we didn’t make. We don’t know where we would have gone if we hadn’t been afraid.”
Finding courage
Of course, seeing truths about yourself and acting on them requires courage and steadfastness. For Bain, the tipping point in her personal relationship came when she saw her new partner criticise her daughters.
“It’s like a boomerang, when you suddenly realise that this is not so peachy,” said Bain, who added she felt “acute pain” and wanted to “run for her life” when she finally understood the denial she had been living in.
“It felt like the curtain suddenly opened and you can see what the reality is.”

Poll: 32 million adults have started shopping for the holidays

September 23rd, 2015

It’s still summer, but put a bow on 5 million ultra-early birds: They’re already done


If you’re perusing sale fliers and websites for winter holiday gifts while wearing T-shirts and shorts, you’re not alone. The calendar still says summer, but millions of Americans have already started — and a few have even finished — their holiday shopping.

A scientific poll of 1,004 U.S. adults commissioned by CreditCards.com found that 14 percent of consumers — about 32 million adults based on U.S. Census estimates — have begun holiday shopping. And 2 percent, or about 4.6 million, are ultra-early birds: They’re already done.

To be sure, huge swathes of the American public steadfastly refuse to let holiday shopping slip into summer, or even fall. More than half of us (55 percent of holiday shoppers) won’t finish until sometime in December. One in 5 won’t be done until Christmas Eve.

But for many, holiday shopping keeps creeping earlier into the year. When asked whether they’d be starting holiday shopping earlier or later this year, 15 percent of consumers said they’d start earlier, compared to just 4 percent saying they would start later, according to the survey (see “Survey methodology“).

Poll findings
Here’s what else the poll uncovered about early shoppers:

  • Online shoppers in particular have gotten a holiday head start, as 18 percent of respondents who said they mainly shop online have begun filling their digital carts, compared to 14 percent of those who prefer in-store shopping.
  • Grandma and Grandpa are furthest ahead of the holiday crowds, as 7 percent of consumers over the age of 65 say they have already finished holiday shopping. No other age group had more than 1 percent say they’re all done.
  • Nearly 1 in 4 shoppers (23 percent) say they will finish holiday shopping by the end of November.

Early birds want to save time, money
Overall, Americans are expected to spend approximately $886 billion on holiday shopping this year, according to eMarketer. For most of us, that’s still off in the future: 80 percent of consumers haven’t started holiday shopping yet. However, those already buying holiday goodies are setting themselves up for a more relaxed holiday season — and may save some time and money along the way.

Asked to name their main method of holiday shopping this year, poll respondents said:
Percent Method
60% In person at retail stores
23% Online, using a desktop or laptop computer
7% Online, using a mobile device such as a cellphone or tablet
2% From mail order catalogs
7% Other, don’t know or refused
Source: CreditCards.com survey of 940 U.S. adults who said they planned to shop for the holidays. Margin of error plus or minus 3.7 percentage points. See survey methodology.

“Last-minute shoppers are not able to do the comparison shopping the early shoppers can do,” said Kathleen Gurney, CEO of Financial Psychology Corp.

Who else shops early? The CreditCards.com poll found white respondents are more likely than nonwhites to start holiday shopping early, 16 percent to 9 percent. Parents are also more proactive holiday shoppers, as 20 percent of have begun shopping, compared to only 11 percent of nonparents.

Advertising starts early, too

Retail promotions have shifted at least two weeks earlier over the past five years and holiday promotions often conclude by Thanksgiving, to a 2015 holiday retail trends study conducted by Centro Inc. found.

“What traditionally was held on Black Friday or Cyber Monday is now being held weeks, and even months, before the holidays,” said Andrew Johnson, communications manager for financial counseling organization GreenPath Debt Solutions. “It certainly could be to your advantage to start looking now.”

All those early holiday advertisements may be working, as 23 percent of consumers will finish their holiday shopping by the end of November, according to the CreditCards.com poll.

‘I don’t like to be rushed’

Early holiday shopper Pamela Toler, a writer and historian from Chicago, enjoys reducing holiday costs, but values fewer crowds and less stress even more.

“I don’t like to be rushed, and this way I can enjoy the holiday,” she said.

An excess of leisure time may help explain why those 65 and older may have more presents ready than their children.

“Older people do have the time to think more about these things,” Gurney said. “I just think they are not as overwhelmed by other aspects of life. They have less stress and more joy in doing this now than you will if you wait.”

Starting early helps cushion budgets
Tackling shopping lists well before the holidays can help lessen the financial burden. Melanie DeCarolis, a wine educator from Boston, starts her holiday shopping in early July, wrapping up before the end of August to ensure she can more easily afford presents for all her nieces, nephews and godchildren.

How to Be Emotionally Intelligent About Your Finances

April 15th, 2015

Prudent and successful investing is as much about managing attitudes and feelings about money as it is about managing the money itself.  It’s all in how we use it that brings us the greatest satisfaction and success.

If we are self-aware and self-confident, we feel more of a sense of mastery.  We feel we are making the best use of it because we are using it to reflect our core values and our sense of ourselves.

Daniel Goleman has written extensively about the benefits of having and using “emotional intelligence” in our life’s pursuits.  In his book, “Leadership:  The Power of Emotional Intelligence” he posits that the ability to identify and monitor one’s emotions is imperative to being a competent leader.

He has a short list of competencies leaders must possess including self-awareness and self-management.  If you are self-aware, you have realistic self-confidence—you understand your own strengths and limitations. His point is that effective leaders understand how their personal dynamics, principally emotions, make an impact and learn to manage them so that they are used most effectively.

In my work at Financial Psychology Corp., the same principles are applied to money management.   In working with the financial services industry, it became clear early on that understanding feelings and being able to manage them was a key competency in mastering wealth accumulation.  Financial advisors had the greatest influence with their clients if they understood the importance of managing attitudes and feelings as well as finances—both their own and their clients.

Investing by its very nature is an emotional business and being able to understand our feelings and the impact they have on how we are using our money, enables us to make smarter choices and ultimately make the best use of our money.

I have seen too many otherwise highly intelligent investors allow their emotions to cloud their better judgment.  They react impulsively and inappropriately to market swings and use their emotional money minds instead of their more rational money minds.

The skill set is the same whether you want to be a good leader or you want to be a good money manager:  you have to know yourself and how to profit from reinforcing your attitudes and feelings which are assets and shoring up those that may be liabilities.  We can become our greatest financial asset if we learn how to use our personality traits so that we profit from them.  It all starts with knowing ourselves.

The mission of my company, Financial Psychology Corp., is to give people insight into their financial behavior so that they can make the best use of their money.  Visit www.kathleengurney.com and learn more about how you can discover the personality traits which make an impact on your financial sense of well-being.

Just as leaders use their personal attributes to achieve the most powerful influence in their pursuits, investors must be able to use the same skills and competencies to have optimum influence in how their money is being managed:  realistic self-awareness and self-confidence of doing the right thing.

What’s Your Comfort Level with Taking Financial Risk?

March 10th, 2015

If you’re puzzled in how to honestly respond, you’re not alone.  Most people find out their true comfort with risk only after the fact—after they’ve lost money.  Then, and only then, do they really know how much they can financially and emotionally afford to lose.

Your risk tolerance is your ability to make decisions, trading the known for the unknown, and to be comfortable with the decision once it is made.

Before you can begin to understand how to gauge your comfort level in taking risks with your finances and investments, think about how you feel in general about giving up something you know now without being certain of what your return will be in the future.  The possibility exists that what you get will be less than your investment.

There are several reasons that risk is mystifying and elusive:

Tolerance for risk is difficult for most people to accurately gauge because it is a socially desirable trait, at least in the United States.  The USA was founded by brave individuals who risked their lives and ventured into an unknown land for a greater sense of freedom and independence.   Ever since,   entrepreneurial behavior has been revered and rewarded.  So, people like to believe that they’re higher risk takers than they truly are.  They want to believe that they’d step up to the plate if they saw an opportunity for significant financial gain..

The truth is that most people would rather not gamble and take the financial risk because they would regret the potential loss in the process.  They are not certain they will reap a just reward for the risk they’d take.

When you search your minds and hearts for your own sense of what risk means to you and how much risk you can comfortably tolerate, keep in mind that you, too, may be swayed by what you’d like to believe.  Ask yourself how much money you can financially afford to lose.  And then ask an equally important question—how much can you emotionally afford to lose?  How will you weather the financial and emotional loss?

So what’s beneficial?  Should you aspire to be a low, medium or high risk-taker?  There’s no right answer or one-size fits all when risk-taking is involved.

Here are some guidelines that may help you in trying to gauge what’s appropriate for you in achieving your goals and objectives:

Impulsive risk-taking usually pays off with buyers or sellers remorse.

  • Calculated risk is always the preferred strategy and surest bet to make.
  • Don’t risk more than you can financially or emotionally afford to lose.
  • Look at what you may lose from risking as well as what you may gain.
  • Experimenting with risk is more costly with age.

You can increase your comfort level with risk slowly and consistently over time—taking small but consistent steps which will eventually lead to bigger gains than a one-time gamble on the risky move paying off.  Your confidence in yourself will also increase in the process if you succeed over time.

Take a look at this brief video with three financial advisers describing how they speak to their clients about risk and how to gauge what it means to them: http://www.cnbc.com/id/102397145

Stay tuned for Part 2 of “Gauging Risk” by understanding the money personality traits which play a big part in how you relate to risk.

Know What You Can Emotionally and Financially Afford to Lose

January 15th, 2015

So often, investors react impulsively to bad news and a volatile market selling shares of perfectly good stocks or changing their asset allocations in anticipation of a significant downturn in the market. Had they held on, history reinforces staying the course if the allocation makes rational and financial sense and the stocks deemed to be good stocks over the longer term.

But many investors, react with their emotional money minds rather than their rational ones.

Why is it that some investors make rational decisions, stick with their choices and strategies while others act out their emotions and make bad investment decisions?

The field of Behavioral Finance has given insight into the mental miscues investors make that sabotage and crimp their returns. One of those miscues or mental mistakes is the fear of losing money.

This is how it works: Psychologically, people give greater weight to a past loss than they do to a future gain. In fact, some investors find losing money so distasteful that they psych themselves out of investing altogether.

Investors don’t make reasonable tradeoffs. The drive to avoid loss really sabotages any future gains or opportunities. Rather, investors rationalize their feelings and walk away from being an involved and active investor in the market. Some work it out and choose a strategy of a more passive approach investing in index funds and stay the course.

From where I sit as a psychologist specializing in money management and investing, I tend to experience investors or would-be investors who are frozen by indecision and the fear of losing their money.

Solution: Determine ahead of time exactly how much you can “emotionally” afford to lose as well as “financially”. They are often very different.

If you feel that a financial loss will be a significant emotional and financial loss, then choose the more conservatively balanced approach of investing. If you feel you can handle the emotional and financial upset of a loss, estimate just how much of a loss that should be for you to continue to feel and be secure.

The point is that investing is by nature an emotional as well as financial business. Your heart and wallet go hand in hand.

With spending some time upfront reflecting and gauging your comfort level, you will be better equipped over the long-term for whatever happens in the market.

©2015 Kathleen Gurney, Ph.D.

Taking the Fear Out of Investing in a Nervous Market and Staying Your Game Plan

October 27th, 2014

Often Bull markets are like blinders.  Investors begin to believe in the fantasy that the market and our equity investments will always take good care of us and never disappoint. (more…)

Women and Wealth: The Gender Gap

April 17th, 2014


The blog describes the speech by Kathleen Gurney, PhD

Financial Institutions Have Not Changed Their Stripes and They’re After You

April 11th, 2012

You may be one of the fortunate to have learned from the recession by changing your ways. You gave up business as usual. (more…)

Tips to Fight Frugal Fatigue in Becoming Fiscally Fit

March 6th, 2012

What frugal fatigue is

Mental and emotional exhaustion caused by frugality – a constant life focus of counting and pinching your pennies. Frugal fatigue causes feelings of being over-spent, exhausted, depressed without hope of any change. It’s like fighting an uphill battle without any end in sight.

How best to address it (more…)

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Your Money Personality

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