Anchoring; how it impacts on our spending behaviour

At some time or other we have all been anchored.  This tends to happen more often when we are purchasing a product or service that we don’t know too much about.  Here’s how it works.

tyre croppedI was happily driving my car when it developed a bit of a shudder through the steering wheel.  I didn’t think it was a major so I took it to my local Tyre shop, thinking my wheels just needed balancing. (That is about the extent of my technical knowledge of tyres).  I left my car in the serviceman’s capable hands and headed off to my appointment.

Within 10 minutes my phone rang – never a good sign.  It was the tyre shop, the problem was somewhat more serious than balancing.  I needed a new tyre as this one was falling apart (apparently I was lucky I made it to the tyre shop without having a serious accident).  Not only did I need one new tyre, the others were looking quite worn so I really needed to replace all four.  Not what I wanted to hear, but safety comes first so I took a deep breath and asked for some prices.

This is what I was told. Continue reading


Financially supporting our Children. When does it stop?

It is an exciting day and also tinged with a bit of sadness when our children leave home. Maybe they are off to see the world, heading to university or flatting with their friends.  Does this mean we stop supporting our children financially?  This question can become the elephant in the room for many families.

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The short answer seems to be no we don’t stop supporting them financially!  Among friends and clients it seems many of us with adult children are still helping out in one way or another.

The agreement we had with our children was we would support them during university and after that they were on their own.  Sounded like a really good plan at the time, but over the years it hasn’t quite worked out that way.  The number of parents in the same boat as us seems to be growing.

The old adage of children leaving home at 18 or when they finish their tertiary education and supporting themselves, has disappeared for a high percentage of parents.  We are faced with the dilemma of supporting our children for longer than originally thought.  This can cause friction between the parents.

This story was told to me in a humorous way, but there were serious undertones.

“Our son came back from overseas, no money, no job, so of course we welcomed him back home.  Six months later he is still here, he has a job, but isn’t contributing a penny. Continue reading

Pocket money for children; 9 tips to think about

As I discovered when chatting to a group of parents about pocket money, the topic can get quite emotive and there are lots of different views about how much, when to start and whether or not to ‘pay ‘children to do chores.

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Everyone in the group gave their children pocket but the amount was the tricky part. It seemed to be linked more to peer pressure about what everyone else was getting, rather than what the parents thought was appropriate.

This story from one Mum really highlighted the children’s understanding of the value of money.  “It was Xmas and the kids got an envelope with $20 in it from their aunt.  The 11 year old got mildly excited about $20.  The 7 year old thought it was a lot of money and the three year old wondered why his aunt had given him a pretty picture”. Continue reading

Money or Time?

Quite a dilemma isn’t it.  We work hard to earn the money to give us the good things in life but then we don’t have the time to enjoy them because we are working too hard.  Bit of a chicken and egg scenario.

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When we think about what we are trading (or compromising) for money, time tends to be the first thing that pops into our head.  The 40hr working week that our forebears fought so hard to get seems to be a distant memory.

I received an email from a client at 11pm she was still in the office (she arrived at 7am) and would be back at 7am the following morning.  She has two children who she feels spend more time with the babysitter than they do with her.  But she is building her career in a profession that expects that kind of commitment.  Whilst she loves her work, she is really concerned about missing time with her children as well.  So why does she do it?  She feels she has no choice, she needs to provide for her family, and the hope of a large salary and less hours at some point in the future keeps her going.

This is a common story, not only from people on salaries, but business owners as well.  We seem to be prepared and feel we need to work long hours for some financial goal in the future. Continue reading

A new relationship. When do you talk about money?

I was presenting at a women’s conference recently about money and mindset.  At the end of the presentation I was asked this question.  “My daughter is in a new relationship, when she should talk to the new boyfriend about money?” 

money relationship compressed “As soon as possible!!” I said.

I continued: Just let me clarify what I mean.  You probably wouldn’t talk about your financial situation or expectations on a first or maybe even second date.  But once the toothbrush starts moving and you are planning further ahead than the movies or dinner next week; the relationship is looking a little more serious.  Maybe you are planning a holiday away together.  Whatever the trigger is for you that gets you thinking things are moving beyond the dating stage and a longer term relationship is looking likely then you need to have a conversation about money management.

Money can cause huge stress in a relationship.  It is hard to pin down the statistics, but some reports say that up to 70% of relationship breakup is due to money.  So get it out in the open early.  Continue reading

BNZ’S Money Emotion Scan Tool

The BNZ (Bank of New Zealand) have a new tool on their website that uses facial recognition software to show your emotional response to particular money scenarios

BNZ bank

I had to give it a go, didn’t I!  I couldn’t help myself, I am a money mentor after all, and I spend a lot of my time helping people understand their relationship with money.

So here I am at 5.15 in the morning in my office, P.J’s and headphones on, waiting for the Emotional Tools scan to start, ready and eager to watch and listen to the scenarios.  It felt a little weird having the webcam on and seeing my face with the lines linking the recognition software.  Was I expected to speak? Was I supposed to try and keep my emotions in check?  The only instruction was to relax I am not sure that I really was that comfortable.

Continue reading

Children and Money: To Teach or Not to Teach…

Financial literacy for children is a hot topic.  Start them young so they learn to save not spend, is one school of thought.  But what if as a parent you are struggling with your own financial literacy can you be a positive role model?

money box

Children and money is always a very interesting topic of conversation.

The question of what to teach children about money and when to start is something I am asked quite frequently in my role as a money mentor.

I really like Rob Stocks article Cents and Financial Sensibility , his 10 point checklist, whilst somewhat tongue in cheek, does have a few gems in it.

Teaching your children financial literacy should go hand in hand with their understanding of maths. There is no point trying to teach the value of $20 or what you can buy with it if the child can only count to 10.

Continue reading