According to a Bankrate.com poll, 36% of Americans of all ages have not begun saving for retirement—including a rather shocking 25%+ of the 50-64 year-olds surveyed. Of course there are many uncontrollable reasons why people are financially unprepared—losing their job to the recession, an obsolete skill set, disability or runaway medical expenses.
A recent Forbes article, titled "Retirement Reality Bites: It's Time To Bite Back," says there are many controllable factors when it comes to how we think about and deal with money. The article terms this your money mindset. Beliefs about money are founded at an early age, when we are just children. These beliefs can be healthy and responsible, or they can be destructive and lead to disastrous behavior. The “broken” money mindsets are a large part of that 36% or even worse, the 25%.
Let’s take a closer look at these money mindsets.
Avoidance Mindset. Some grew up in homes where parents never talked about money. These folks think, “I don’t know anything about it, so, I'm going to ignore it." These avoider-types are shackled by their own inability to understand and take ownership of their financial futures.
Anxiety Mindset. This mindset stems from growing up in a homes where money was the source of conflict. With this mindset there is anxiety when finances are brought up. As the original article explains, when the subject of money is broached, present feelings are tied to the past and this triggers anxious behavior. These folks have a tough time talking about money or dealing with it in a positive way.
Vanity Mindset. This is your material girls and playboys… bling and flash. This group is all about showing their wealth. "Keeping up with the Joneses" takes a lot of effort and a lot of money. This means spending to show off now instead of working to secure their future. These individuals think that what others think is most important. They are victims of peer pressure.
Magical Money Mindset. Lastly, these people have a mindset half-way between optimism and a faith-based belief that God or fate has everything planned. No need for them to get involved. Gamblers and lotto players are also in this category, thinking that one big score is all that is needed to get them flush for life. The original article describes this type of thinking as fantasy, as far as a strategy to become financially secure.
Good news! There are some things you can do to get out of these dysfunctional mindsets.
Investigate to see if your money problems are uncontrollable or controllable. If they are uncontrollable, think about some retraining, career counseling, or debt relief from a qualified professional.
If the unhealthy mindset is controllable, analyze your beliefs, admit you need an overhaul, and adopt a new mindset. The original article suggests you try something like, “I deserve to feel comfortable and secure” or a similarly positive message to see you through the potholes you will encounter down the road. It will take some time.
There are several other ideas and more discussion in the Forbes article that can help you transform your thinking to a healthier financial outlook. Read through the article and speak to a qualified estate planning attorney to start your move to a mindset that will serve you well as you start a new way of thinking and living—with a sound strategy in place with the future in mind.
You can learn more about this topic as well as other strategies on our website under the tab entitled: estate planning in Virginia. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning.
Reference: Forbes (September 16, 2014) "Retirement Reality Bites: It's Time To Bite Back"