What To Expect

I met with a new client that clearly needs help with financial organization.  When you bring home six figures, own two homes and continually get shut-off notices, you need a personal bookkeeper.  But this was a sell for him.  He just didn’t know what to expect from this business relationship.  In his mind, he runs a successful business, he should be able to do something as simple as go through mail, balance a checking account and pay a bill.  But he doesn’t, and this realization is bothering him.

I sat and showed him how my service could help.  I’ll balance all his bank and credit card accounts using the on-line information.  I’ll summarize information into spreadsheets and e-mail it to him weekly.  He’ll continue to get his statements to verify any information I provide to him.

He’ll be able to see:

• The amount of money he has in his bank account for the week.
• Bills to pay that week (he can decide what to pay and when
• Cash flow for the week (how much he has now and how much he’ll have when he spends what he thinks he’ll spend that week)
• Summary of what was spent the previous week.  With this he’ll be able to see:

             o   if something was charged without his knowledge;

o   a summary of his expenses categorized for tax purposes.

All this for 5-6 hours a month, depending on how much activity he has.  For some people this is a no-brainer, simplifying your financial life? Having a clear picture of what you have and what you can spend? No work at tax time? Many of us think that would be the answer to our prayers.  But here I am offering this service, and he’s hesitant.

I think the real issue is pretty clear – fear.  So many people are afraid of their money – afraid of seeing it, afraid of not seeing it, afraid of spending it, afraid of not spending it, afraid of losing it, afraid of being afraid of it.  Once we take the focus off of money itself and realize the fear is around what we think it represents, that will be the first step.

Thinking of Scary Stuff

It’s hard to do this every day.  Every day I deal with something scary and I think, “Oh, this is something to write about.”  But the sitting down and writing doesn’t always happen.  At first I told myself that I didn’t have the time.  But I think that’s just an excuse.  The truth is, it just sucks to think of scary stuff.

Which leads to the next logical question, “Why would anyone want to read about this scary stuff?”

When I started this business in 2006 everyone kept telling me that I would have people lined up outside my door.  I was offering to help people get organized around their finances.  C’mon!  How many people do you know could use help in that area?  Everyone I told the idea to said, “Oh, my uncle could use your service” or “My neighbor is a mess.”  But no one called and the money never flowed.

It took several years before I realized how much fear there is around this topic.  Money is terrifying.  Well, I should modify that.  Managing money is terrifying.  There are people who manage successful businesses, understand investments and the economy, and can’t remember to pay their personal bills on time.  They think they are good money managers.  Then there are people who keep large families fed and clothed on tiny incomes, and they believe they are bad money managers because they’re not rich.  It’s so screwed up.  And when I step in and try to help any of these people, they run.  This is scary stuff.

The reality is we all need to just sit down and face it.  Face the scary stuff.  That’s the only way we’re ever going to get through to the other side.

A Better Destination

My laptop stopped working during a presentation to a potential new client.  I had been working on the laptop all day, trying to get my personal finances in order.  When you work on other people’s finances all day, you never get to your own.  So I had been balancing my checking account and entering receipts for hours that day using the computer.  Then I had to pick up the sitter and drive through Boston to get to a client’s home.  The 25 minute drive took 105 minutes – thank you Central Artery at rush hour.

While I was showing the client spreadsheets, the computer locked up three different times.  Finally I shut it down and tried to verbally describe how I could improve his financial life with weekly updates.  I was embarrassed.  I wanted to come off so together and professional.

Since I’ve brought the lap top home, I’ve had no problems – not a one.  What’s up with that?!  These are the moments when I think higher powers are at work.  I imagine that there is a reason for the situation.  There is a reason that it was important that I felt insecure at that moment.  There is a lesson for me to learn from the experience.

I know this is just my imaginings.  But these kinds of thoughts help me through those moments.  I don’t like the idea that random occurrences control our decisions and experiences.  I prefer the less likely alternative – every negative experience happens to lead you down a path to a better destination.

Show Me the Money?

I hate asking people for money.  I hate “selling” my services.  I hate having to convince people that even though I help them manage their money, I don’t make a lot of money doing it.

It’s so illogical though.  I know I’m not going to do all this work for people for free, and I know the service is invaluable and worth what I charge.  I completely understand why people think it’s something they should be able to do on their own, even though most don’t.

Organizing your mail, balancing your checking account, and paying bills seems like something anyone with a half a brain and a decent job should be able to do, but I meet so many people who are completely overwhelmed with the task.  So when I sit and talk to someone about how they can benefit from my services, I need to really sell them on it.

The average client usually spends 6 hours a month on me.  I have one client who only requires 3 hours a month and another who requires about 12.  It depends on how much activity is going on in their bank accounts.  Once I start doing the work for a client, they’re sold.  They don’t have to go through mounds of mail, try to remember when bills are due, or sift through receipts at tax time.  For the $200-$300 a month they pay per month, it’s completely worth it.

So why am I so unnerved with talking about this to a skeptical client?  I’m sure it has something to do with having to deal with confrontation, or how I value myself, or some such other psychological issue.  I think I’ll leave this one un-analyzed and just decide that it’s something I need to just get over.  If I want to continue to help people, then I need to put myself out there and continue to market myself.  Show me the money!

Closing Your Account in Sweats and Sneakers

I went to the bank to close one of my bank accounts today.  I have several different bank accounts open at different banks.  I like banking at lots of different banks because I want to see what each bank is really like.  People are always asking me what I think about this bank or that bank.  Between the banks my clients and I deal with, I think I have a pretty good picture of what different banks are like.

I decided last year that I was going to work at not keeping money at any of the big banks.  I always had a problem with my affiliation with big banks, but the locations were so convenient.  But the Occupy Wallstreet movement solidified the decision for me.  I started the process of banking at credit unions and small local banks.

Changing banks is a lot of work – especially if you don’t have a lot of money and you have a lot of transactions going on.  I have automatic deductions, I write a lot of checks, and I pay a lot of our bills on-line.  My husband has direct deposit through his job and he uses foreign ATM’s a lot. 

I found a local bank that I really like.  They pay interest for a checking account, they reimburse for foreign ATM fees (huge!), and the account is free (so far).  All these banks love to talk about a “free” checking account, but I’ve noticed that after a few years they start implementing monthly maintenance fees or debit card charges or something.

The bank account I closed just started charging me $4.99 a month.  Ugh.  But like I said, changing banks is not an overnight thing.  I had already contacted my husband’s payroll department to get the paycheck to go into the new account; I went on-line and changed the bank for all the automatic deductions; and there are on-line transactions that weren’t automatic, but still had the old bank information on their website.  Some transactions take several weeks to start using the new bank, and if you have any outstanding checks, you can either wait for them to clear or contact the payee and write them a new check.  Whew!

I had left $9 in this bank account waiting for one check that I wrote to my kid’s school to clear.  The check was for $5.50 and I wrote it last September for some educational thing.  It was December and the check still hadn’t cleared.  I sent an e-mail to my son’s teacher and she said it should clear any day now.  Christmas came and went and finally on January 9^th it cleared.  But on January 5^th the bank charged me $4.99 “for keeping such a low balance in the account”.  So now I have a negative balance.

I know you have to go into a bank to close an account – you can’t do it over the phone. So today was the day to go to the bank.  My plan was to get them to reverse the fee, close the account and get my $3.50 back.

I noticed as I was getting dressed that morning my change in behavior.  Usually I wear sweats and sneakers when I’m running errands to places like the post office and the bank.  Sometimes I don’t even shower!  (Was that TMI?)  But this morning I put on a little nicer outfit (just a little nicer) and even a dab of make up – to close out a bank account with $3 in it?!

When you don’t have a lot of money and you have to deal with banks, it can be disconcerting.  Even for me, and I deal with money and finances all the time.  I had nothing to prove to these people and feel strongly about my decision to change banks, and I’m still making sure I look and act respectable for the occasion.

What’s this about?  Fear.  Fear of what people will think.  Fear of a possible confrontation.  Fear of what the bank person may say.

So what happened?  Nothing.  Everything went fine.  The woman was perfectly polite, they reversed the fee, they gave me my $3.50 and said “Thank you for your business.”  I was out the door in 10 minutes.

In this attempt at being honest with all my feelings of fear for this calendar year it occurs to me how difficult this relatively simple transaction at a bank may be for so many other people.  Just going into a bank and asking for your $3 back - while wearing sweats and sneakers.

Fears in a Grocery Store

It’s really important to protect the identity of the people I counsel.  Budget counseling is all about people’s personal money lives.  At times I think it’s the most personal thing someone can discuss with me.  It’s amazing how people will talk to me about problems their having with money and I’ll think I have some kind of idea of what they’re problem may be, but then once I ask for the specific numbers and I do the math I see a completely different story.  A session that starts out as “We need to improve our credit score and figure out how much money to save” becomes “I need to stop resenting my wife for making more money than me and thus sabotaging the bill paying process to compensate.”  That’s just one example.

I received a call today from a wife that is really upset.  I was in the parking lot of the grocery store when she called so most of the conversation happened while going up and down the aisles. We have talked on and off over the past three or so years.  Her husband keeps shopping.  She hates checking things on-line, so she doesn’t find out about most of the purchases until the credit card or bank statement shows up in the mail.  Most of the things he buys are for her, or other family members, or when they eat out.  The bottom-line number always surprises her.  His response, “I make good money. I should be able to buy these things.”  But it’s not what you make.  It’s what you spend.  All this shopping is keeping them from reaching some of their financial goals – buying a house, having a baby, just to name two.

Over the last several counseling sessions we’ve tried many things to help the husband track his spending.  He’ll stick to it for several weeks, and then it drops off.  He even agreed to have his wife give him a certain amount of cash for the week.  When the cash was gone, no more spending.  But then he started secretly using the credit card.  Now we’re talking about finding a way for the wife to get more comfortable with the internet and checking their bank and credit card balances more often.

But the truth is, all these things are just dealing with symptoms, not the problem.  Most money problems are not about money.  And this is especially true with spending problems. 

I was talking with a young woman about a month ago and she was going on and on about how she can’t resist sales, and she loves to buy dinner for her friends.  We talked for about 30 minutes before she quickly said, “…and then I have to give some to my mother, of course.”  It turned out whenever she came home after cashing her paycheck, her mom would insist on taking a lot of her money. “I wouldn’t mind if she was paying the electric bill or something, but I know that’s not what she’s doing with it.  And it’s not like I can say ‘no’ to her!”  This woman was spending all her money before her mom could find out about it so she didn’t have to give it to her!  Spending problems are rarely what we think. 

So, although I can’t say what will happen for sure with the husband described above, I suspect that spending all of their money has something to do with a fear not being faced.  Fears of settling down, growing up, and moving on with your life are extremely common.