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Lilian Yoffee

June 2, 2021 By Lilian Yoffee

Your Financial Identity

Your Financial Identity

Finance and LGBTQ2+

A survey conducted by SAGE reported that 42% of LGBTQ individuals between 45 and 75 years old were “very” or “extremely” worried that their savings will run out, in contrast to the 25% of non-LGBTQ individuals.1 Additionally, an LGBTQ Financial Security Study by MassMutual reported that 40% of the LGBTQ community worries about money/household finance on a daily or multiple times a week, compared to the 29% for the general population.2 What does this tell us? The societal and institutional prejudice against the LGBTQ2+ community that still continues to persist impacts the financial health of those that are part of the community.

For example, there are 29 countries worldwide that legalized same-sex marriage. This means that in these nations, same-sex couples can plan their financial futures together, finally have their rights recognized under the law. This helps to alleviate a portion of the emotional damage that stems from the lack of legal support when dealing with finances. While it is a significant improvement compared to a time not so long ago, this also serves as a striking reminder that more work needs to be done in order for this to be recognized worldwide.

Additionally, the transgender population’s unemployment is three times higher than the public.3 In a society where some have to choose between securing their income while masking their identity, or embracing their identity while risking their financial status, it creates a great financial barrier that others do not experience nor will understand.

The podcast Nancy, hosted by Tobin Low and Kathy Tu describes the current economy being structured for cisgender and heterosexual individuals, rather than encompassing and fostering diversity among all. A case where a transgender woman was blocked out of her bank account because the phone operator thought she sounded like a man is one of many incidents that highlight the systematic discrimination when dealing with money. David Rae wrote, “It is a bit of a heteronormative attitude to think financial planning is the same regardless of sexual orientation.” Ignoring the differences and variability in needs will lead to a system that only helps the majority while creating a more polarized community as denial of one’s own identity by others or the lack of support simply due to one’s sexual orientation can cause emotional trauma.

As allies, it is crucial to stand behind and with those who are part of the LGBTQ2+ community and listen to their needs. By aiming and working towards creating a society where financial and moreover, human rights are applied to everyone regardless of sex, gender, sexual orientation, and all other factors, we can help the minority groups financially and emotionally.

The stereotypes and prejudice ingrained in society need to be addressed in all domains, including the financial field as it is an essential part of everyone’s lives.

No one should have to hide their own identity to claim their own rights.

  1. SAGE, “Out and Visible: The Experiences and Attitudes of Lesbian, Gay, Bisexual, and Transgender (LGBT) Older Adults, Ages 45-75”,  2014. https://www.sageusa.org/wp-content/uploads/2018/05/sageusa-out-visible-lgbt-market-research-full-report.pdf.
  2. Greenwald & Associates, “MassMutual LGBTQ Financial Security Study”, 2017.
  3. Out & Equal, “2017 Workplace Equality Fact Sheet”, 2017.
  4. https://www.wnycstudios.org/podcasts/nancy/moneypage

Filed Under: blog, Financial Identity

May 19, 2021 By Lilian Yoffee

Money is quantifiable, humans are not

Money is quantifiable, humans are not

It has been three months since you have been laid off your job. In the first two or three weeks, you were able to manage to pay all your monthly bills: rent, electricity, food, and so on. However, you are entering month three. It is getting harder and harder to make ends meet and the inadequate income has finally caught up. Now, it is not a question of if you can buy new clothes and afford to go to a nice restaurant once a month, but rather “how am I going to feed myself this month”. The urge to call your friends and family is shadowed by a strong sense of shame and guilt.

While the scenario written above devastating, it is not a rare nor an irregular story. It is something that happens to countless adults for an extended period of time, leading to financial trauma. When an American survey reports that about three quarters of adults experience stress regarding finances, it comes as no surprise that the compounding of stress snowballs into symptoms of PTSD. However, the disconnect between money and our emotions creates a lack of acknowledgement in how these intrapersonal and interpersonal financial issues are dealt with. While the problem might stem simply from money, financial health is not just about quantitative data. It is about having a stable and healthy relationship.

Financial trauma, as Brianna Wiest writes, is caused by the effects of one’s income being insufficient for the expenses for a long period of time.1 Not only does it affect our emotional state, but it also negatively influences our physicality and our cognitive functions. When we are faced with financial stress, the autonomic nervous system in our body signals the body to react in one of three ways: fight, flight, or freeze. As these responses are not suggestive of a healthy and balanced reaction to prolonged distress, it makes it quite clear that our response to financial stress can lead to grave and alarming emotional responses. Economic hardship as a child or inability to secure a stable income as an adult are one of many situations in which it can lead to financial trauma.2

Similar to PTSD, depression is also commonly seen in those who endured financially traumatic experiences.3 The cyclic nature of depression can stem from the recurring and overbearing thoughts of shame and guilt that is often caused by one’s financial instability. The stigma surrounding money prevents people from acknowledging and addressing their financial worries and issues with professionals and these issues are often kept bottled up. This further pushes people into lethargy and continues the cycle of depression.4  Galen Buckwalter, who is an expert in financial trauma, emphasizes that as our stress system was developed way before money become an integral part of our everyday lives, our body’s response to financial stress is not transient like it would have been when we’re chased by a bear, but rather continous.1 Unlike a sudden stress trigger that is momentary, this consumes our body every second of the day.1

Additionally, when society establishes a financial hierarchy where the higher you are, the better off you are, many start to associate these different levels with one’s worth. The more money you have, the better you are as a person. In retrospect, we know this is far from the truth and an extremely myopic way of looking at self-esteem. However, the coupling of money and self-worth is a result of social conditioning that is prevalent yet harmful.5 The danger of this association is that we start to evaluate ourselves by using a single number (ex. income) and as transient being that is easily replaceable, such as being cut from a job. In times of low financial stability, questioning our self-worth often becomes an additional stress factor that can contributes to the accumulation of distress and damage. When our goal to overcome this chronic stress of finance seems unachievable despite the hard work, this traumatic experience leads to symptoms similar to those of PTSD.

Is there an end to this?

Money is an integral part of our lives but more importantly, it is crucial to understand that they do not define our worth.

A healthy relationship with money is not synonymous with perfection. A recovery from financial trauma is completely possible with addressing the core issues that lead to chronic stress. While budgeting and planning are important aspects of recovery, respecting and acknowledging our emotions is a vital aspect of truly accepting ourselves. When we are more familiar with our feelings, it becomes easier to identify emotions in various financial situations. Some may think pushing our emotions aside and relying on our logic is the only way to go; however, this can lead to both psychological and physical distress, which is something we want to avoid. Some ways of facing chronic financial stress and trauma include:

  1. Respecting our emotions and acknowledging them
  2. Keeping a budget and trying to aim for transparency for yourself
  3. Talking to family, friends, or professionals

Our emotions are a crucial aspect of who we are. It is important to include them in the conversation, even when we’re talking numbers.

  1. Wiest, B. (2021, January 7). Financial Trauma Is A Reality For One Third Of Millennials, This Expert Explains How To Recover. Forbes. https://www.forbes.com/sites/briannawiest/2019/04/04/financial-trauma-is-a-reality-for-one-third-of-millennials-this-expert-explains-how-to-recover/?sh=7cb2dc38130c.
  2. Polizzi , M. (2021, April 29). Growing Up Poor Can Cause Long-Lasting Trauma-Here’s How You Can Overcome It. Health.com. https://www.health.com/money/child-poverty-financial-trauma.
  3. Tull, M. (2020, March 27). How to Get Treated for Your PTSD and Depression. Verywell Mind. https://www.verywellmind.com/ptsd-and-depression-2797533.
  4. Wehrenberg, M. (n.d.). Shame and Depression. Psychology Today. https://www.psychologytoday.com/us/blog/depression-management-techniques/201507/shame-and-depression.
  5. Gariepy, L. (2020, June 23). Your relationship with self-worth and money: It’s complicatedLaura Gariepy. Financial Best Life. https://financialbestlife.com/your-relationship-with-self-worth-and-money-its-complicated/#:~:text=Research%20shows%20there’s%20a%20powerful,someone%20has%20healthy%20self%2Desteem.

Filed Under: blog

March 24, 2021 By Lilian Yoffee

One Year Since Covid

The Pandemic Anniversary: It’s been a year… where do we go from here?

It is mind boggling to believe that it has already been a year since the outbreak of Covid-19. On March 11th 2020, WHO announced that COVID-19 can be characterized as a pandemic. In the past year, the number of deaths due to COVID-19 has climbed up to over 2.5 million, and the number of cases is about to reach 125 million. While the possibility of vaccination can make us hope for the return to some semblance of normality, the emotional and financial damage from the past year is not something that can heal immediately or in a passive manner. In a catastrophic and dire event like this where the whole world is affected in one way or another, it is evident that there is not a one-shoe-fits-all solution. From toilet paper and water-bottles emptied from the shelves of supermarkets and streets that used to be filled with people before this pandemic being emptied, to majority of the population getting used to the quarantined lifestyle we have certainty witnessed a great deal of change internally and socially. Over the year, we have learned to adapt to this new way of living through facing and overcoming new challenges when there is a string of hope.

The emotional and financial changes we have witnessed varies across each demographic in the population. Essential workers throughout the world have dedicated their time and energy, risking their own lives to save the rest of the population. However, the workspace that has become beyond nerve-racking also resurfaced, in addition to amplifying, the underlying problems of the workforce that was never entirely addressed: uncertainty, work and family imbalance, and finances.1 A poll conducted by Eagle Hill in August 2020 reported that 58% of US workers were burnt out in comparison to the 45% that was recorded in April.2 This spike can be attributed to many factors, but especially to the stress and anxiety that comes from the uncertainty of the world that surrounds those workers.

On the other hand, many workers were demanded to leave their original workplace and adapt to a new style of labour. This brings in another level of complexity to how we regulate our emotions. A sudden shift in our environment induces extreme isolation and loneliness, especially in the face of precariousness within our media, government, and everyday lives. It leads to extreme financial behaviours reflecting the turbulent external milieu. Additionally, the financial pressure due to the possibility of unemployment acting as the opposing force of emotional exhaustion makes the decision of continuing to work strenuous, leading to financial trauma.

Similarly, the student body as a whole was asked to adopt a new way of learning, which is very different from the traditional way. The conventional educational dogma does not necessarily match all student’s optimal learning methods; however, the so-called “zoom-fatigue” exhausts both the students and the teachers and is not conducive for long-term learning. Moreover, the psychological and physical tiredness are not the only problems. According to the WalletHub’s 2020 College Student Financial survey, ⅔ of the college students express change in how they feel about their financial future.3 Coinciding with the increasing cost of living, the pandemic has aggravated students financial worries.

Within each population, each individual has had a different experience throughout the pandemic. Some may have lost loved ones, while others may have experienced a drastic decline in mental health. Many of us did not have the choice but to persevere and make these tough financial decisions despite the psychological exhaustion this pandemic has caused. A year after the initial shock, many still are unsure about what the future holds. Jefferson Center trauma clinicians, Jamie Schlichenmayer and Joel Smith, discuss the two different types of trauma, direct trauma and vicarious trauma, that are associated with the current pandemic. While direct trauma is our response to the direct exposure to the distilling event, which in this case is our experiences with the pandemic, it can lead to vicarious trauma due to the interconnectivity of all our lives, especially through the use of social media.4 Despite all we have in the scientific literature, we cannot know the full emotional and financial impact of COVID-19 on our lives yet. The financial toll and its peak impact may show a couple months, or even years after.

Though it has been a year already, it is still equally important as it was in March 2020 to acknowledge the trauma that we have gone through. It is mentally draining and damaging to have the mentality of “it’s already been a year, I should be fine”, or “why am I still thinking about this”. Emotional regulation does not only apply at the peak of stress, but rather a habit that can help us manage our polarizing emotions in situations like these. In a way, the financial concerns of many individuals are not as urgent nor critical as before.5 However, almost half of Americans are spending less compared to a year ago and also 49% of the people who lost wages is still earning less than before.5 What does this say about us and our emotions?

  1. It is not necessarily that the situation got exponentially better in the past year, but we have adapted.
  2. It is important to keep working on emotional regulation because it is about creating a habit, and not a band aid solution.

Unlike a sudden problem that had emerged out of nowhere, finance has always been affected by our emotions as it is such an integral part of our life. Although none of us are certain about the future, it is critical to remember that while we may not be able to control our external variables, we are able to manage how our emotions impact our financial health. Despite all that happened in the past year, we have all survived 100% of the days. Let’s not let our environment dictate our decisions.

References

  1. Bruce, J. (2020, April 03). In a Covid-19 WORLD, mental health is workforce health. Retrieved March 23, 2021, from https://www.forbes.com/sites/janbruce/2020/04/03/in-a-covid-19-world-mental-health-is-workforce-health/?sh=28b40b072385
  2. Employee burnout FROM covid-19 on the rise, with 58% of US workers reporting burnout. (2020, November 19). Retrieved March 23, 2021, from https://www.eaglehillconsulting.com/news/employee-burnout-from-covid-19-on-the-rise-with-58-of-u-s-workers-reporting-burnout/
  3. Dickler, J. (2020, August 31). Due to PANDEMIC, more than 13 million college students are worried about their financial future: Study. Retrieved March 23, 2021, from https://www.cnbc.com/2020/08/31/majority-of-college-students-are-worried-about-money-due-to-covid-19.html
  4. Bruce, J. (2020, April 03). In a Covid-19 WORLD, mental health is workforce health. Retrieved March 23, 2021, from https://www.forbes.com/sites/janbruce/2020/04/03/in-a-covid-19-world-mental-health-is-workforce-health/?sh=28b40b072385
  5. Horowitz, J., Brown, A., & Minkin, R. (2021, March 05). The COVID-19 Pandemic’s long-term financial impact. Retrieved March 23, 2021, from https://www.pewresearch.org/social-trends/2021/03/05/a-year-into-the-pandemic-long-term-financial-impact-weighs-heavily-on-many-americans/

Filed Under: blog

September 21, 2020 By Lilian Yoffee

Know Your Money Culture

For millennials and Gen Z-ers, financial literacy is a germane topic as young adults grow into responsibility for their own economic decisions. Although managing personal finances is a critical aspect of independence many are, at first, daunted by the task—feeling ill-equipped for financial decisions and unsure of the best course of action. Often, people cite the lack of personal finance classes in high school as a principle source of their discomfort; but many factors beyond such external resources work together to influence financial behavior. One’s cultural narrative figures heavily, our cultural background affecting our financial decisions as much as our ideas and opinions. The cultural narrative is a primary source from which our thoughts and feelings about money originate.

As a Canadian with Japanese and Russian backgrounds, and having lived in Japan and Canada, I can proudly say that I am truly multi-cultural. Each of my diverse cultures has distinct values, passed from generation to generation, and as deeply ingrained in me as in my parents and grandparents. While some of these values share basic elements, others clash with one another— resulting in confusion and ambiguity over my decision-making. This process repeats every time a major issue arises to re-trigger conflicting mentalities, temporarily allowing my emotions to take over the decision making. On the surface, financial behaviors may seem to be detached from our cultural background but, in fact, cultural norms and beliefs affect our financial decisions in subconscious ways that cannot be explained merely quantitatively.

For example, the concept of investing has only recently begun to spread among the younger generation in Japan as an effective way to grow personal assets. Growing up in Japan I was never exposed to the notion of personal investment. Asked about Japanese openness to personal investment, Japan strategist at a Hong Kong-based brokerage firm, Nicholas Smith, stated, “Japan at the moment just doesn’t have the culture for it.”

The Japanese do not reject personal investing outright; but, unlike North Americans, investing simply isn’t the first line of accumulating wealth for many Japanese. It was only after I came to Canada that I heard people talking casually about investing in the course of daily conversations. This example demonstrates how differences in values between cultures affect what financial concepts and strategies dominate personal finance.

Here is another fascinating example. In 2018, Swiss researchers Brown, Henchoz, and Spycher surveyed over 700 secondary school students in the Swiss canton of Fribourg, on the border between French- and German-speaking regions, to investigate the effect of cultural background on financial literacy and attitudes. They found that German-speaking students had a higher level of financial literacy than French speakers, due to a significant disparity in their “embedded cultural differences.” They reported that “students in the German speaking region are more likely to receive pocket money at an early age and are more likely to have independent access to a bank account than students in the French speaking region.” Thus, in spite of geographical uniformity, the different German and French societal customs created major differences in the financial competency of the two populations.

As shown above, although economic education may play a role in young people’s personal financial literacy, cultural inclinations exert far more influence. We need to acknowledge that no one-size-fits-all approach will succeed in increasing financial literacy for millennials and Gen Z-ers. Both our culture and our own emotions contribute to our financial decision-making, and any instruction must be tailored to recognize and support differences among various ethno-cultural groups and individuals.

In addition to acknowledging your own cultural background, certain traits are labelled for different generations. For example, many claim—with good reason—that Gen Z-ers are tech-dependent. While growing up, using technology has been an integral part of daily routine. On the other hand, some claim that our wariness about the future may be a significant factor in our lack of financial knowledge. For millennials, the stereotypes range from a need for accommodation and flexibility to insistence on knowing the “why” of everything. Although such generalizations do not apply to everyone, nevertheless they may serve to plant certain ideas in our heads. Likewise, different perceptions and treatment of different generations play a large part in our financial conduct. Our own background might seem to be irrelevant in the topic of financial literacy, but it is important to recognize and appreciate all the elements responsible for our behavior to help us understand why we make—or resist making—certain economic decisions.

Our challenge is to respectfully acknowledge our personal and cultural heritage, embrace it, and use it to our advantage to make sound financial decisions. It begins with compassionate self-reflection. Many find the necessary internal examination easier with the help of a professional. Above all, knowledge is key and the ball is in our court.

For a free consultation about your best course to financial stability and health, call 818.600.2264

References

Brown, M., Henchoz, C., & Spycher, T. (2018). Culture and financial literacy: Evidence from a within-country language border. Journal of Economic Behavior & Organization, 150, 62–85. doi:10.1016/j.jebo.2018.03.011.

Generation Z Stereotypes: Debunking the Myths of Generation Z. (n.d.). Retrieved August 13, 2020, from https://www.npd.com/wps/portal/npd/us/news/tips-trends-takeaways/guide-to-gen-z-debunking-the-myths-of-our-youngest-generation/

Obe, M. (2017, August 28). In Japan, the lottery is out and investing is in. Nikkei Asian Review. https://asia.nikkei.com/Economy/In-Japan-the-lottery-is-out-and-investing-is-in.

Filed Under: blog, financial wellness, money and emotion, Money Management Tagged With: financial stability, making financial decisions, millennial, money

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