“You cannot spend your way out of
poverty.”
- Michael Sherraden
"You cannot teach a man anything;
you can only help him find it
within himself." -Galileo
Colorado Conference on Poverty
August 8th 2012
Pueblo, CO
Most Common Reasons
1. Want to “stick to a budget”
2. Want to “save”
3. Want to improve their credit
4. Want to be less stressed about money
75%
Stress
of Americans say that
money is their biggest
stressor, according to
survey by the APA .
Money
80%
of all medical
expenditures are stress
related, according to
the CDC’s estimates.
Health
Health related debt is the
number one cause of
personal bankruptcy in the
U.S. according to a 2007
Harvard University Study.
Rule #8: Stressed brains don’t learn
the same way.
John Medina, Brain Rules
• Your brain is built to deal with stress that lasts
about 30 seconds. The brain is not designed for
long term stress when you feel like you have no
control.
• Stress damages virtually every kind of cognition
that exists. (Memory and executive function,
motor skills, immune response, ability to sleep)
Rule #8: Stressed brains don’t learn
the same way.
John Medina, Brain Rules
• You have one brain.
• The same brain you have at home is the same
brain you have at work or school.
• The stress you are experiencing at home will affect
your performance at work, and vice versa.
Short-Term Stress Can Affect Learning and
Memory
ScienceDaily (Mar. 11. 2008)
• It has been known that severe stress lasting
weeks or months can impair cell communication
in the brain’s learning and memory region…
• A new study shows that short-term stress lasting
as little as a few hours can impair brain-cell
communication as well.
Money and Stress
• Finances play one of the biggest roles in a
person’s day-to-day stress.
• Stress, as it turns out, is one of the biggest
factors in a person’s health.
• And health is one of the largest burdens on
personal finances!
Top 3 “Stress Related” Diseases
• Obesity
• Cardiovascular Disease
• Diabetes
Obesity in America: Healthcare Costs
Double Previous Estimates
Business & Health (April 9th 2012)
• An obese person’s medical cost is $2,700 higher
than a non-obese person.
• Nationally the costs associated with obesity costs
$190 billion annually and account for 20.6%
of all national health expenditures.
Cardiovascular Disease
• The estimated direct and indirect cost of
cardiovascular disease for 2010 was $503.2
billion in the U.S. (American Heart Association)
• The average cost of care for a patient up to 90
days post-stroke is $15,000. (The University Hospital, “Stroke Statistics”)
Diabetes
• In 2007, diabetes cost the nation an estimated
$174 billion. Currently just under 1 in 10
Americans has diabetes. (American Diabetes Association)
• A 50-year-old person just diagnosed with
diabetes has medical expenditures that are
$4,174 higher than an identical person without
diabetes with an annual average increase of
$158. (American Diabetes Association)
Students & Financial Stress
• Out of 14,500 students from 15 different
colleges, financial pressure was the number
one reason these students dropped out of their
four year college. (Larry Chiang, 2007)
Employees & Financial Stress
• Personal finance is the #1 personal issue causing
stress in the workplace. (ComPsych printed in USA Today)
• Up to 40% of employees report stress over
personal finances which leads to lost
productivity, increased absenteeism, and a loss
of job satisfaction and motivation. (Garman, Leech & Grable)
Definition of Stress
• The non-specific response of the body to any
demand for change. (Hans Selye)
Two Kinds of Stress…
• Acute Stress: is experienced in response to an
immediate perceived threat, either physical,
emotional or psychological.
Two Kinds of Stress…
• Als0 called Fight-or-Fight Response.
• Early human survival depended on this
response.
Stress and the Body
• Stress causes the body to release the hormones
Adrenaline and Cortisol and other stress related
hormones.
Stress and the Body
• Increased levels of Cortisol, Adrenaline and
other hormones produce:
 An increased heart rate
Quickened breathing rate
Higher blood pressure
Two Kinds of Stress…
• Chronic Stress: is a state of ongoing
physiological arousal.
• Over time this can wear down our bodies and
cause us to become ill, either physically or
emotionally.
• We were built to handle acute stress, not chronic
stress.
OK – So money is the number one
cause of stress…
then…
What is Money?
What is Money?
• Money is simply a tool.
What is Credit?
What is Credit?
• Credit is trust.
Available
credit
Promise to
pay later
Credit Report
• Is a history of what you have done or have not
done.
What is an Asset?
What is an Asset?
• An asset is simply something of value to you.
1.
Tangible and Intangible Assets
• What is the difference between tangible and
intangible assets?
Tangible
Intangible
1.
house
car
family
health
1. Azoreg
Asset Building Continuum
Time
Shelter
•Emergency
•Renting
•Buying
•Nutrition
•Prevention
•Management
• Growth
• Protection
• Retirement
•Academic
Education
•Life
Education
•Civic Ed
Income
Skills &
Education
Health
Environment & Community
Friends & Family
ACCESSIBILITY
Energy
Savings &
Investing
• Growth
• Protection
Asset Building Continuum
Traditional
Financial Education
Barriers
• Income, money and time are frequently
considered the primary barriers to achieving
our goals.
 Generally speaking, what are the barriers to
increasing income and money?
 How does our allocation of time hinder our
progress towards our goals?
1.
Improving your financial position will
come from the creation and
maintenance of ASSETS and not merely
an increase in income.
Sharp Right Turn
What is a Personal
Value?
What is a Personal Value?
• Something important to you.
• “Ideals by which you live your life.”
Community
1.
Family
Growth
1. Frank Wouters
Exercise: Personal Values
• Please circle your top ten Values from the list.
Exercise: Personal Values
• List your top five personal values in no specific
order.
1.
2.
3.
4.
5.
Are Values Fluid?
• Then vs. Now
 Education
 Family
Fun
 Job Security
Freedom
 Health
Kindness
 Patience
Courage
 Influence
Personal Behavior
• List one personal behavior that supports each of
your above listed values:
Personal Value: Health
Personal Behavior: I exercise 3 times
a week
Exercise: Personal Behavior
• We all have things that are important to us but
we all do things that are not in alignment with
our values.
• It is a human condition.
Exercise: Personal Behavior
• List one personal behavior that contradicts each
of your above listed values:
Personal Value: Health
Personal Behavior: I only ate a bag of
chips for lunch.
Behaviors and Values
• Remember, money is simply a tool.
• And our values drive our behavior around
money.
• We decide what we do with our money.
Exercise: Wants and Needs
• Make a list of your current wants and needs:
WANT
NEED
1.
1.
2.
2.
3.
3.
4.
4.
5.
5.
Wants and Needs
• What is the difference between a want and a
need?
Usually comes down to survival.
Wants and Needs
• How do you determine what your wants and
needs are?
“I want a new car.”
“I need a new car.”
Wants and Needs
• When a “want” turns into a “need” it adds stress.
“I want new shoes.”
“I need new shoes.”
+
stress
Wants and Needs
• What are some influences on determining your
wants and needs?
Message in Our Head
• Clip from “The Colbert Report”
The Message in Our Head
• Marketing: The systematic planning,
implementation and control of a mix of business
activities intended to bring together buyers and
sellers for the mutually advantageous exchange
or transfer of products.
All the strategies used to get you to behave in a
certain way.
Example: Humane Society Commercials
The Message in Our Head
• Marketing: All strategies used to get you to
willfully give up your money.
• Advertising: One strategy used to get you to
willfully give up your money.
The Message in Our Head
• How much is spent on marketing per year?
$400,000,000,000
• and they intend to get their money back.
The Message in Our Head
• “By the time we reach the age of sixty-six, most
of us will have seen approximately two million
television commercials. Time-wise, that’s the
equivalent of watching eight hours of ads
seven days a week for six straight years.”
(Buy-ology, p. 37)
The Message in Our Head
• In 1971 the average American was exposed to at
least 560 advertisements per day.
• The average U.S. consumer receives roughly
1 million marketing messages a year across all
media, or about 3,000 messages per day.
1. David Shenk, 1998
2. John Hagel III and Marc Singer, 1999
Marketing aims to…
• Create a want where none existed.
“You know, those shoes are pretty nice, I
want them.”
• Turn a want into a need.
“Those shoes are so nice, I need them for
this weekend.”
Example: Cell phones
• Cell phones circa 1980s
Example: Cell phones
• Cell phones today
Message in Our Head
• Estimates are as high as $10 billion spent
on advertising all types of food and beverages
to America’s children and youth. (Only 5%
are for healthy foods/beverages such as dairy
products and fruit juice. None are for fruits and
vegetables.)
• Kids in the United States see 40,000
commercials each year.
1. Science Daily, York University
2. Colorado State University
3. American Academy of Pediatrics
Message in Our Head
• Under the age of 8, most kids don’t
understand that commercials are for selling a
product.
• Under the age of 6, unable to distinguish
program content from commercials.
* American Academy of Pediatrics
Message in Our Head
• Q: Why do marketers spend so much time
advertising to kids?
• A: Imprinting
Before 7 years old, marketing messages will have
an impact on the way the kids will behave in the
future.
Neuromarketing
• An emerging field in marketing which is focused
on appealing to you at the subconscious level.
(Not subliminal advertising: Pictured Below)
Neuromarketing
• Marketing: you know that they are directly
asking you to buy something.
Example: Car commercial.
• Neuromarketing: they influence you without
directly asking you to buy something.
• Can you describe an instance when you noticed
“Neuromarketing” at work?
Neuromarketing
• Marketing to the subconscious.
Example: At the grocery store.
Neuromarketing
• Example: Cinnabon at the airport.
* Btotanes 2010
Neuromarketing
• Example: Colors
Red: Energetic, Hungry
Where you’ll see: Logos
and calls to action
Orange: Enthusiastic, Cheerful
Where you’ll see: Calls to action
(subscribe, buy, etc.)
Blue: Secure, Trustworthy
Where you’ll see: Money
and business related
websites (banks, loans, etc.)
Deep Green: Stable, Wealthy
Where you’ll see: Testimonials,
Founder’s stories, etc.
Light Green: Calm
Where you’ll see: Entertainment
and leisure related websites
* Ann Smarty, 2009
Neuromarketing
• Example: Product Placement
Message in Our Head
• Chess Analogy:
 If I know the rules and you don’t, I’ll win.
 If there is money on the table, I’ll take that too.
1.
Values and Behaviors
• We all have things that are important to us, we
all have our values.
• But we sometimes do things that are not in
alignment with our values.
Values and Behaviors
• Example: “I’m a good person, but I robbed a
bank.”
• How do I make sense of that to myself?
“I didn’t hurt anyone.”
“The bank has insurance, it’s okay.”
“The world owes me.”
“I’ll never do it again.”
“I did it to take care of my kids.”
The Impact
Personal
Values & Self
Image
Cognitive
Dissonance
Thought or
Behavior that is
not in alignment
with Personal
Values
Cognitive
Dissonance
Justification
Rationalization
Denial
Blame
Self
Image
Relief
Justification
Rationalization
Denial
Blame
PERSONAL VALUE
DESIRED
RESULT
BEHAVIOR
Cognitive Dissonance
• If you’ve ever said…..
“Well, it was only $2.”
“It was on sale!”
“I deserve it.”
“I’m stressed out, I need this.”
“Just this once, I won’t do this again.”
“It’s Monday.”
“It’s Friday.”
“It’s the weekend.”
“It’s my birthday.” “It probably won’t be here later.”
“It’s their birthday.”
“It’s a gift.”
80% of Spouses Lie About Spending
Secret spenders have hidden credit cards, bank accounts and debts
Chris Friedrich, August 2010
Link: http://www.creditcards.com/credit-card-news/spouses-lie-about-finances-secrets-survey-1264.php
Thought
or
Impulse
Moment:
Where you
make the
decision
• In that moment all of the marketing and advertising
is trying to help you justify or rationalize your
thoughts and impulses to spend spend spend.
• Even if it is not in alignment with your values.
So where does all this
spending get us?
So where does all this
spending get us?
In some serious debt…
Consumer Debt
• As of May 2012 Americans amassed
$2,57 2,8 00,000,000
in personal consumer debt*
This is what we haven’t paid for yet.
*Federal Reserve
Consumer Debt
• Amount of credit card debt:
$870,200,000,000
*Federal Reserve
Consumer Debt
• 609.8 million credit cards in US.
• Average credit card debt per household with
credit card: $15,799.
• Average APR on credit card with balance on it:
12.76% as of May 2012.
*Federal Reserve
Consumer Debt
• Amount of student loan debt:
$1,015,645,586,140.00
As of July 10th, 2012*
*Fastweb and FinAid
Consumer Debt
• The amount of student loans taken out in 2010
was over $100 billion.
• Two thirds of the undergraduate class of 2010
graduated with student debt, at an average
of more than $25,000 per student.
• Total student loan debt is increasing at a rate of
about $2,853.88 per second.
*Federal Reserve
*Projectonstudentdebt.org
*FinAid
Debt
*Student Debt (Mother Jones)
Debt
• The amount of mortgage debt:
$13,366,278,ooo,ooo
*Federal Reserve
In Summary
• Marketers spent:
$400,000,000,000.00
• Consumer’s DEBT:
$2,572,800,000,000.00
US National Debt
• The outstanding Public Debt as of July 10th 2012:
$15,883,141,771,511.21
• The National Debt has continued to increase an
average of $3.94 billion per day since 2007.
*National Debt Clock
US National Debt
• The estimated population of the US is
313,108,443 so each citizen’s share of this
debt is $50,727.29
• Number of US Income Taxpayers is
141,536,000 making the share of debt rise
to $112,219.80
*US Census
*National Debt Clock
That’s a serious amount of debt…
We live in an Environment &
Community that is in debt big time.
…and debt =
A WHOLE LOTTA STRESS!!!
Spending and Stress
• Researchers say that it takes as little as 2.5
seconds to make a purchasing decision.
• “When we first decide to buy something, the
brain cells that release dopamine secrete a
burst of good feeling and this dopamine rush
fuels our instinct to keep shopping even when
our rational minds tell us we’ve had enough.”
*Moneywise, 2010
*Michael Lindstrom
Short vs. Long Term
Short Term
dopamine
Long Term
cortisol
Short vs. Long Term
• In the short term we are deciding to spend our
time and money somewhere, which makes us
happy.
• In the long term we are creating stress and debt
for ourselves and when we create debt we are
agreeing to give up future time….
How Stress is Defined and Measured:
• Aroused physiological response to stress.
Ex. Increased heart rate, quicker breathing.
• Stressor must be “perceived” as aversive .
 We want to avoid the thing causing stress because
it is unpleasant.
• Person must not feel in control of stressor.
*John Medina
Different Responses to Stress
• If two people are in the exact same stressful
situation, do they respond the same way to that
stress?
Most likely they do not have the same response.
One might be better able to deal with the stress.
Different Responses to Stress
• What does that mean about stress if people have
different reactions?
Stress is subjective.
It means something different to each one of us.
Different Responses to Stress
• How are our perceptions about stress shaped?
• How much is within your control?
• Is it possible to change?
Different Responses to Stress
• If you want to improve your economic situation
but you do not feel you have control over your
stressors, it will have an impact on many areas
of your life such as:
Your ability to learn
Your productivity
Your relationships
Your health
Your finances
Your Stress
• Please write down one reoccurring stressor in
your life.
Your Stress
• What about your perception of the stressor could
be changed?
Your Stress
• What within the situation could you control or
change?
What is a Habit?
Habits
• Habit: an acquired behavior pattern regularly
followed until it has become almost involuntary.
Ex: Looking both ways when crossing the street.
What is the purpose of a
Habit?
Habits
• The purpose of a habit is cognitive ease.
Your brain has to do less work.
How do we change a
Habit?
Habits
• I feel
stressed
out.
Cue
Routine
• I eat lots
of junk
food.
• I feel
better.
Reward
• I feel
stressed
out.
Cue
• I feel
stressed
out.
Cue
Routine
• I eat lots
of junk
food.
Routine
• I go for
a walk.
• I feel
better.
Reward
• I feel
better.
Reward
Habits
If you do not have awareness, you will not change.
You have to believe you can do it.
Having support can help you through the process
and keep you motivated.
And you need small wins to keep you going.
Making Change
• “If we keep doing the same thing we’ve always
done, we can expect to get the same things we’ve
always got.”
• Definition of Insanity: doing the same thing over
and over and expecting different results.
Stages of Change
(Prochaska and DiClemente)
1. Pre-contemplation:
• we are not considering any changes and are not examining our beliefs and
values;
2. Contemplation:
• we are considering making changes, feel a desire to change (seeking relief
or reward) but have not yet decided to change because we are ambivalent;
3. Planning (Learning):
4. Action:
5. Maintenance:
6. Relapse (Recycling):
• taking concrete steps toward making a change, and examining how our
believes and values either support or hinder change;
• Making the change; actively putting the plan into action
• Keeping the change going by continual practice and integration within our
beliefs and values;
• Brings us back into the stages and gives us another change to really
investigate our behaviors, beliefs and values.
Stages of Change
• Q: How do we get from pre-contemplation to
contemplation?
• A: Shift in values. (Gotta Wanna)
• Example: An event triggers a change in values.
A child is born: I valued smoking, but now I value
my child’s health.
Tools for Change
Goal Setting
Goals and Values Sheet
Spending Behavior
• Receipt Exercise
• Spending Journal
Date
Item or Bill
Cost
Payment Method
6/11
Rent
Soda
$750
$.79
Check
Cash
6/12
Pizza
$12.00
Debit
Budget
Income Source
Gross
(Total Amount)
Taxes,
Insurance, &
Benefits
Net
(Gross minus
taxes, etc.)
T.V.
Expenses
Expected
Actual
Difference
T.V.
1.
2.
3.
Savings/ Investments
Food
Housing
Medical
Transportation
Health Insurance
Car Insurance
Life Insurance
Clothing
Household Items
Convenience Foods
Entertainment
Monthly Asset Plan with Asset Building Continuum
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