This post is part four of a four-part series focused on wealth transfer and financial therapy. The vignettes featured in each post are fiction. All names and events are the products of the author’s imagination and used in a fictitious manner. Any resemblance to actual persons, living or dead, or actual events is purely coincidental. 

Check out part one for an in-depth look at The Great Wealth Transfer, part two for a focus on common pain points and strategies for success, and part three for a peek at how financial therapy helps with wealth transfer dynamics. 

For today’s blog post, Sarina, Maria, and Devon have graciously allowed us to peek into their financial therapy journals! Now, I realize they are pretend people and made-up vignettes based on my decade of experience. Still, it’s nice to ask their permission to look at their pretend journal entries!

To start, let’s read what Sarina wrote in her financial therapy journal after a few appointments with me (a real financial therapist!).

I was excited to get on the video call with Wendy today. It was our third appointment together. So far, I have noticed a definite decline in my anxiety and racing thoughts as I have worked with the prompts Wendy offered. 

Today, she asked me to Breathe! Yes, I felt a bit frustrated because I wanted some action steps, but I followed the prompt out of curiosity. Here are the instructions from Wendy:

Let’s start off with a breath. Focusing on your breathing regulates the nervous system and connects you to your physical body. It grounds you to the present moment. 

Find a tall, comfortable seat that allows you to breathe fully and without restriction. Close your eyes and focus on breathing deeply. 

As you breathe, think about money: spending, saving, debting, earning, and anything in between. Imagine the physical representation of money: the way dollar bills feel in your hand or the way coins clinks together in your pocket. Think about how it feels to swipe a credit card or pay your balance online. 

Take five deep, intentional breaths, inhaling for the count of four…and exhaling for the count of four. 

Allow your breath to float in and out like clouds drifting across the sky. When thoughts come up, approach them with compassionate curiosity rather than judgment. 

After five breaths, open your eyes. 

This pause, this breathing exercise, really helped to slow my racing thoughts and to connect me with what I want my money life to look like. I don’t have all the answers yet, but I feel more able to sit with the uncertainty. 

I want to increase awareness of my money mindsets, realizing I have lived with a high level of general avoidance of money most of my life. I have unconsciously kept myself in a paycheck to paycheck cycle, not really thinking much about it. My parents did it, so I thought it was just the way it was. 

I also uncovered an attitude of resentment toward anyone who had “more than enough,” believing it meant they were doing something wrong, cheating, or being greedy. Now, I am faced with being someone with “more than enough.” It’s no wonder that I see the value in shifting my money mindset!

Prior to meeting with Wendy, I was ignoring my bank balance. The funds were transferred a couple of months ago, and I am still living the same daily life. I am relieved to hear that I am not alone in not knowing what to do with such a paradigm shift in my sense of self and lifestyle. I’m ready for whatever comes next!

Moving on, Maria has worked with me for a few months now. Here is a snippet from her financial therapy journal.

Wow! This week, Wendy gave me this journal prompt: What story do I want my money to tell? I hate to admit it, but I’ve never thought about having my own money story. As I begin to accept this money, these resources are mine to own now, not my uncle’s, or my parents’. I get to build a vision for it.

Wendy keeps repeating that I can approach this wealth transfer with compassion, curiosity, and zero judgment. This blows my mind! I have never experienced anything around money with zero judgment. And it’s so helpful. Now, I can see forward. I can see that I want my resources to grow and expand my life, not scare me or guilt me.  

When I think of my money story, I envision financial security for myself: taking family trips, having ways to create memories, and having money to leave for my children. I don’t actually know how to achieve these goals, but Wendy was very helpful in encouraging me to take this process one step at a time. Until I know the story I want it to tell, I won’t know the questions to even ask my Financial A-Team.

Devon is also working through a couple of journal prompts from me this week.

Today, Wendy asked me to journal about the money I am receiving and answer the question, “Whose money is it?” I immediately began to think of family members who seem to need money. This exercise helped me realize that I am not thinking of the money as mine but simply as mine to give away.  

In talking with Wendy about this feeling, I realized I am eager to give it away because I want to push the “problem” away from me — the “problem” being my fear of what to do with this money. It’s time to shift away from fear and toward more confidence that I can build my own money map and have it reflect my values.  

I also recognize that my sister has always been really good at presenting her problems to me and expecting me to give her money to solve them. I have done so a few times, and now, I see it’s actually not helping her change her life. Next week, I want to talk more with Wendy about how to have strong financial boundaries as I work toward truly owning my resources.

Wow! How cool was it that we were able to explore the thoughts of these individuals as they adjust to their new financial realities after wealth transfer?

What did you notice when asking yourself to consider these journal prompts? Journaling is a great tool for our relationship with money because money doesn’t hold a conversation with us. By slowing down your thoughts enough to write out the money map you desire, your brain can begin to identify the questions you need to answer to build your path.

Well, that’s a wrap on this four-part series. Together, we looked at the reality of wealth transfers, including the volume of funds to be transferred in the near future. We defined wealth as an abundance of resources. Then, we walked through the experiences of Sarina, Maria, and Devon to gain some personal insights into this process.  

So now what? What do you do with this new perspective? Whether you expect to receive or to give wealth in the future, I encourage you to use the journal prompts above to connect to the role you want money to play in your life. Explore your thoughts and reactions with zero judgment. Build paths toward communication that feels helpful and not overwhelming.  Knowing the high amounts of wealth, of resources, that are passed to generations and then lost, it’s worth looking at your communication style and goals, so that this wealth transfer can become a time of connection and care.

Remember: I am always here for you!

Click here for more supportive resources and additional help. If you’re ready for individualized support, book a free discovery call now!

The post Part Four: Financial Therapy Journal in Action for Clients Dealing with Wealth Transfer Dynamics appeared first on Financial Therapy Solutions.

This post is part three of a four-part series focused on wealth transfer and financial therapy. The vignettes featured in each post are fiction. All names and events are the products of the author’s imagination and used in a fictitious manner. Any resemblance to actual persons, living or dead, or actual events is purely coincidental. 

Check out part one for an in-depth look at The Great Wealth Transfer and part two for a focus on common pain points and strategies for success. 

Devon logged into their discovery call with Wendy Wright, a financial therapist, feeling both hope and trepidation. They were excited to hear that something like financial therapy existed, but they had no idea what it was or if it could help. They recently sold a business and received their payout last week. Seven million dollars! And they’ll receive a similar payout annually in the coming years. 

Devon has never had this much money. Historically, they struggled with credit card debt and lived a paycheck-to-paycheck life. They experienced the cycle of debt, paying it off in large chunks, promising to never go into debt again, and then finding themselves in the same situation. 

They also hated their relationship with money — which sparked their business idea. They built an app to help people barter for goods and services to avoid money. The app took off, and soon, Devon faced several buyout offers. They accepted this particular offer not because it was the highest but because the buyer seemed most aligned with their vision. 

So today, when the first installment hit their bank, Devon was stunned. They are glad to have a chance to talk through their feelings with a financial therapist.

In my years of experience working with clients in financial therapy sessions, I know solidly where to start. 

In helping define my Signature Financial Therapy Approach, I created 10 Principles of Financial Therapy ©, knowing that the first principle — Abundant Compassionate Curiosity and Zero Judgment — must come first.

We start here because it’s the best way to wipe the slate clean and allow for assumptions, old stories, and past hurts to be put aside. Money words, financial tactics, expert opinions, our parents’ words and actions…all of these influences live in your brain with certain meanings and intensities. They block your ability to move into your own money story — what I call “owning your money.”

A transfer of wealth often includes messaging from the giver, or from your “family of origin” (that’s therapist-speak for your mom, dad, siblings, grandma, grandpa, or other significant family members). These messages are often more subconscious than overtly conscious. 

Consider this example. Growing up, my family always used a grocery bag — the old school paper kind — for kitchen trash, kept under the sink. So that is what I did. Was this right or wrong? Nope, it’s morally neutral. I can remember going to a friend’s house where they had a stand alone larger trash can with plastic bags in it. Was this right or wrong? Nope, again, morally neutral. 

This is a silly example, but I hope to show that we grow up with ideas of how things are supposed to be because of our limited sample size. When we want to shift our relationship to money, it’s important to start by realizing that your money beliefs may or may not be true. This is why we look back and identify our money past — not to hang blame somewhere but to gain context and understanding. Then, we can start to build our own money path.

Now, let’s apply this idea to a wealth transfer.  

It’s important to give yourself grace as you enter into the adjustment period and shift your perspective on money. Charlene Laney, CFP, and Josh Dunlop, CFP, CDFA, wealth advisors and the founders of NewMaker Financial, explain it this way:

“When a financial reality dawns on us that we aren’t experienced in handling, there is an adjustment period. We see it all the time: Clients rack up a lot of unmanageable debt on that first credit card and overspend their first paychecks. Adjusting is just a normal part of life. The problem with an inheritance is that it can be largely spent before that adjustment has time to occur. Add in the tendency to emotionally spend as you process grief, and you have a recipe for a potential disaster. Being intentional with your inheritance is the best thing you can do.”

One of the biggest issues around a wealth transfer lies in the communication. Ramit Sethi speaks to this truth, saying, “It’s common for wealthy parents to leave an estate with no clear inheritance plan, and it’s always a disaster. Kids fight over the house and never talk again. Make a plan and discuss it with your kids while you’re alive. It’s not morbid; it’s planning.”

Ashley Agnew, the current president of the Financial Therapy Association, shares a similar sentiment: “Money can feel like the family member who no one talks about but is controlling everything.”

To help create clarity in communication, I created this matrix of the common kinds of communication that we find about wealth transfers.

You may have experienced several kinds of bridges across this matrix. For Devon, the wealth was just recently “expected” (so previously “unexpected”), alongside an absence of discussion. For Sarina (in part one of this series), the wealth transfer was “unexpected” and “not discussed,” so the level of shock is real! And for Maria (in part two of this series), wealth in her family was “sort of expected” and “sort of discussed.” I call this “sort of” because the communication around resources was not clear or designed to build confidence. Instead, it was meant to discourage, put down, and shame the receiver.

I also love the way that Megan deBoer, founder of Tended Wealth, explains the impact of unexpected wealth:

“Often, a recipient of unexpected wealth feels as though they haven’t earned it and therefore take longer to feel worthy of having it. This response, if unacknowledged, can lead to an unconscious rejection of it. This is typically expressed across a spectrum: on one end, not taking ownership of the wealth and only using small amounts in ways that Grandma would approve, and on the other end, liquidating the wealth rapidly to alleviate the uncomfortable feeling of being undeserving of it.”

Every combination on the communication matrix can trigger stress, anxiety, and confusion. 

These emotions often lead to behaviors like avoidance, grasping for guidance from the Internet, or pushing money away by spending, giving, or gambling. When we pause and name the existing communication pattern, we can then identify the desired communication pattern. This practice often involves words like clear, wise, and communication-enhancing. In financial therapy, we start with changing your communication to yourself. This step is so key in building a mindful and meditative relationship with your money!

You may be thinking, “But if so and so would just ______, then this wouldn’t be so hard.” And yes, you may be right. With that thought in mind, we also work on processing your grief around the communication that you didn’t get. This act is part of the healing process that I like to call “money work.” 

Once you have allowed space to grieve what did or didn’t happen, we can move forward to your vision, your relationship to money, and your desired communication patterns. If you stay stuck in the belief that someone “should have” talked to you, prepared you, or cared about you, you may struggle to energetically access the wealth, own the resources, and make your own decisions about the money.

Another key principle of my 10 Principles of Financial Therapy© comes into play here: Take the Money Word Out of the Sentence and Deepen What You Are Trying to Say.

This strategy helps you begin to write the story that you want your money to tell.  Let’s look at a few examples:

• “I don’t want this money” can mean “I don’t want this connection to my dad. He hurt me!” or “I don’t want this responsibility. It terrifies me!” or “I don’t deserve it.”
• “If I give this money to my kids, they will be entitled brats!” can mean “If I give this easy access to resources to my kids, they will be selfish and have no values” or “If I give them this big bucket of more than enough, they won’t learn how to save their resources.”
• “If my partner gets this inheritance, it will ruin them” can mean “If my partner has more than enough money, they won’t need me.”

You get the idea. For this principle, we want to identify the underlying fears, desires, and beliefs  driving your reaction. Taking out the money word is a great tool to help open up your mind to the deeper truth.

To close, let’s keep these three ideas in mind as we revisit Devon’s story.

• Communication is key to enhancing your money life.
• You don’t have to do it alone! A financial therapist is a safe and supportive person to add to your Financial A-Team.
• Uncover subconscious beliefs so that you can find your own money path and story.

The call went well! Devon was, at first, a bit teary just naming the events that took place and the dollar amounts. They felt seen and heard by someone who understands the psychology of money. They mentioned to Wendy that the first thing they wanted to do was pay off their credit cards and other debts. 

Wendy didn’t offer judgment, rules, or a strict approach. Instead, she supported the idea of Devon taking a few days to Breathe, allowing their new bank balance and money landscape to sink in. Wendy encouraged them to put the money in a safe place and then gave Devon some specific journal exercises to do to help them absorb the change. Although they were shocked at this first step, they felt relief that they didn’t have to rush forward.

In part four of this series (the final blog post), I will show you how applying these principles works in real time for Sarina, Maria, and Devon. In the meantime, click here for more supportive resources and additional help. If you’re ready for individualized support, book a free discovery call now!

The post Part Three: How Financial Therapy Helps with Wealth Transfer Dynamics appeared first on Financial Therapy Solutions.

by Wendy Wright, LMFT, Financial Therapist, Wealth Transfer Dynamics Specialist, Money Coach

This post is part two of a four-part series focused on wealth transfer and financial therapy. The vignettes featured in each post are fiction. All names and events are the products of the author’s imagination and used in a fictitious manner. Any resemblance to actual persons, living or dead, or actual events is purely coincidental.

Check out part one for an in-depth look at The Great Wealth Transfer! 

Now 45, Maria had always been meticulous with her finances. For years, she’d worked long hours as an accountant, scrimped on luxuries, and carefully deposited every spare penny into her savings account. Maria craved someone to talk to about finances and wealth, but her father, Luis, shut her down with shaming comments whenever she tried to ask for advice. He often responded with comments like, “If you don’t understand that by now, you’re stupid and hopeless.” 

Luis also drilled into her that money was a double-edged sword. “It corrupts the soul,” he’d say, “turns people greedy and cruel. Beware of its pull.” In the same breath, he’d threaten to withhold her inheritance if she disappointed him in any way. The tension between her hard-earned savings and her father’s unpredictable threats created a constant inner conflict. She worked with a quiet resolve, never allowing herself the luxuries she sometimes dreamed of, and maintaining a frugal lifestyle despite her substantial savings.

One August morning, Maria received a letter in the mail. The envelope was formal, with the crisp logo of a law firm embossed in gold. Her heart raced as she slit it open, revealing a letter that would change everything. Her uncle Diego, her father’s estranged brother, had passed away and left her a surprising inheritance of $600,000.00.

The news hit Maria like a bolt of lightning. She stared at the figure in disbelief. “An overnight millionaire,” she whispered, her mind reeling as she added the new sum to her current net worth of $800,000.00. The sum was staggering, enough to transform her life forever. Her initial excitement quickly gave way to a wave of anxiety. What did this mean for her carefully cultivated beliefs about money? Would this inheritance “ruin” her and make her greedy? 

With no one to talk to about her fears, her feelings became overwhelming. Embarrassment at having a million dollars (!) and not knowing what to do next. Fear of losing it or doing something stupid with it. Relief at having a solid financial base at her age. Happiness to receive such a special gift. Grief at the loss of her uncle, a man she knew well and loved very much. Shame and guilt at having more financial resources than her friends. Loneliness due to the lack of a support system and a safe space to share these thoughts. 

As shown in the story above, wealth transfer is a topic fraught with complexities and emotional challenges, which are often overshadowed by the allure of financial success.

As families prepare to pass on their fortunes, the process can become a significant burden rather than the blessing it is often envisioned to be. In part one of this blog series, I shared some surprising statistics related to the high percentage of wealth lost from generation to generation. It can often be traced back to a lack of effective communication about money and wealth transfer. 

The person receiving the transfer usually wants to talk to the giver about their financial situation, but unfortunately, this individual isn’t trained in or skilled enough to do so. There is no shame or judgment in that! It’s important to allow space to grieve that that person isn’t going to be your support system. When this grief is avoided or delayed instead of adequately processed, subconscious behaviors begin to push the money (and the burden of the money) away. This alarming trend underscores the need for effective strategies and thoughtful planning to ensure that wealth transfer doesn’t just become a passing moment but a lasting legacy.

With these thoughts in mind, let’s dive into three key pain points related to wealth transfer dynamics.

Communication Breakdown

One of the most common pain points in wealth transfer is communication. The effectiveness of communication can drastically impact how smoothly the process unfolds. Unfortunately, many families experience issues in this area, such as:

• Zero communication: In some cases, there is a complete lack of communication about the wealth transfer plan, leaving beneficiaries unprepared and confused.
• Shaming communication: When communication does occur, it can sometimes involve shaming or judgment, creating a hostile environment rather than one that fosters understanding and collaboration.
• Mystery communication: Vague comments — such as, “You will be fine when I’m gone,” or “There is money heading your way later” — often add to the confusion of wealth transfer dynamics. 

Effective communication strategies include regular family meetings and clear documentation of plans. Ultimately, all involved individuals should engage in open, respectful discussions about expectations and responsibilities. In financial therapy sessions, I often help clients find new ways to communicate about money. We develop supportive wording, clear ways for setting goals, and effective ways to listen. The third blog post of this series takes a deeper dive into how my signature financial therapy approach helps increase satisfaction in money talk.

With these thoughts in mind, I want to end this section with a quote from an Ellevest article about communication and generational wealth:

“It’s easy to point to communication as the solution to all intergenerational issues, but it’s harder to actually talk effectively. Family meetings alone won’t get you there. In reality, discussing wealth across generations is like having a conversation in different languages. And sometimes, these issues can bring up a lot of emotion, which can make communication harder.”

Grief and Emotional Processing

The emotional aspect of wealth transfer cannot be overstated. Grief from losing a loved one or facing major changes in family dynamics (like divorce or the loss of a primary provider) can significantly impact the process. It typically takes two to five years for individuals to fully grieve, and during this period, both short-term and long-term planning are essential.

• Short-term planning: This step involves addressing immediate needs and concerns. First, the receiver must get the resources into a safe and insured basic growth account. Next, it’s important to settle estates, manage immediate financial issues, and support family members through the initial shock.
• Long-term planning: Here, it’s important to establish new financial goals, revisit and update estate plans, and provide ongoing emotional support to help individuals adapt to their new circumstances.

Financial therapy sessions, grief counseling, and support groups can be valuable resources during this transitional period.

Safety and Confidentiality

Ensuring the safety of sensitive information is another crucial aspect of wealth transfer. Knowing who is trustworthy and safe to discuss matters with is vital. There is a new term you may have heard: a Financial A-Team. It’s no surprise that I encourage you to start with a financial therapist. In financial therapy sessions, you have a safe and non-judging place to talk about who you want on your Financial A-Team. Oftentimes, I will help clients practice talking to financial professionals to reduce sensations of shame, intimidation, and anxiety and increase confidence and clarity.

The Financial A-Team is important, and we want it to feel safe and supportive. If you feel any level of inability to talk freely with a member of your A-Team, that is a clue to make a change. Think about who is on your Financial A-Team. It can include financial advisors/planners, tax accountants, bankers, and more.

Additionally, individuals must safeguard their personal and financial information from potential breaches. This involves secure communication channels and careful consideration of who is privy to sensitive details. Implementing robust confidentiality measures and ensuring that all involved parties are committed to maintaining privacy can prevent complications.

Although the process of wealth transfer can be daunting, understanding and addressing these common pain points helps to pave the way for a smoother transition.

By focusing on effective communication, emotional support, and safety, families can better manage the complexities of transferring wealth and ensure that their legacy endures for generations to come. 

Stay tuned for part three, where we consider how financial therapy can help with wealth transfer dynamics. Click here for more supportive resources and additional help. If you’re ready for individualized support, book a free discovery call now!

The post Part Two: Navigating the Complexities of Wealth Transfer appeared first on Financial Therapy Solutions.

I’m thrilled to share my recent interview with The Pledgettes, a community of women who takes an active role in their finances in an effort to close the gender wealth gap. They focus on making value-aligned decisions towards individual financial goals — because when more women take individual action concerning their money, the collective impact grows.

Your Financial A-Team

This past spring, they discussed the five types of people you need on your Financial A-Team. It should include:

• Growth Partners: These licensed professionals help you identify your goals and develop strategies to reach them. They give you a safe space to talk about your wins and failures as you plot a path to financial freedom. 
• Connectors: We all have an outgoing friend or two who makes you feel like you can talk about anything. Chances are, they are happy to discuss finances with you — especially since money shouldn’t be a taboo topic! Start the conversation, and you’ll be amazed at what you learn. 
• Mentors and Mentees: Find people who are 10 steps ahead of your financially as well as 10 steps behind you. Ask questions about how they got to where they are or what their future goals are. You’ll feel both inspired and motivated.
• High-Five Tribe: This group of friends is simply there to support and celebrate your achievements. You may be working towards different goals, but the important thing is that you all believe everyone can reach financial success.
• Diverse Thinkers: These are the risk-takers who know all about cryptocurrency and Sacred Economics. Learn from their different perspectives and experiences!

As a financial therapist, I fall into the bucket of Growth Partners. During my interview with The Pledgettes, we discussed my work, my thoughts on Big Financial Goals, the members of my own Financial A-Team, and so much more! Check out the full interview here.

Master Your Money Workgroup

Are you ready to make 2022 your best year yet? Consider joining my upcoming Master Your Money workgroup, set to begin in January 2022. This six-month program involves one 90-minute session per month with expert guidance and one-on-one help. During this workgroup, you’ll learn how to get out of debt, save money, grow your business, and reach financial success. Plus, you’ll be working with a supportive group of people like yourself, all using your newfound knowledge and tools to bring about real change to your relationships with money.

I hope you’ll join us for the upcoming Master Your Money workgroup and start the new year strong! You can reach out to wendy@financialtherapysolutions.com with questions.

The post The Role of Financial Therapist on Your Financial A-Team appeared first on Financial Therapy Solutions.