Welcome to Where Parents Talk. My name is Lianne Castelino. Our guest today is a mother of two, a financial psychologist, a clinical neuropsychologist and a best selling author, Dr. Moira Somers consults with families, as well as financial advisors, organizations and individuals on money matters. She was part of the 2021 edition of Talk With Our Kids About Money day held in April across Canada. Dr. Somers joins us from Winnipeg. Thank you so much for being here today.

It’s a pleasure.

I wanted to start with a bit about your background, because you have such an eclectic mix of different areas of expertise and experience that you bring to the subject matter. How would you go about talking about the thrust of what a financial psychologist does?

Well, I don’t think there’s any typical version of that, because there aren’t many of us to begin with. I started out within a traditional kind of health care model. In fact, I still work as a neuro psychologist, and, and spend time every week helping people with mental health issues and neurological disease issues. And it was actually during the course of doing that work, Lianne that it became really apparent to me how much money kind of was interwoven into all aspects of people’s lives, you know, you get injured, you get a you’re in an accident, or you develop an illness. And money is one of those domains where you will, you will also be hurting not just your body, or your mind, but your money and your wallet. And then all of the things that I would I would bear witness to happening in terms of how relationships then got strained, or what kind of juggling had to start happening as people were making the trade-offs between paying for medicine versus paying for mortgage versus paying for food. And, you know, once you start working, you can no longer think about money as kind of this thing that doesn’t matter, or it will just take care of itself. You know, it does for most of us, it does require a certain amount of tending, you know, and, and the more sophisticated that we can become in managing it, the better.

We’re going to talk about several of the aspects that you just alluded to there. But I want to start with something that you’re quoted as saying that money management is a 21st century survival skill. Why do you describe it as such?

You know, when we were all kind of working on the farm, or we had a much more immediate involvement with in community of money, and we could exchange our honey for the eggs for the doctor’s visit for the minister services. You, you didn’t have to really understand how money worked. And until quite recently, you know, if you didn’t have money, then then that was kind of the end of the discussion in terms of how you proceeded you waited until you had money to buy things, for example, there weren’t the kinds of debt instruments available, that are now and so as money has become both more and more abstract in terms of how it works more distant from us, but also more complex. It’s, it’s become evident that we have to develop skill around its management. And we have to develop skill, emotional intelligence around talking about it and managing it and integrating it into family life, into romantic partnerships and into business partnerships as well.

Let’s talk about family life as a starting point. What would you say are some of the common challenges that you witness families go through, particularly parents, as they’re dealing with money matters and their children?

You know, every family is, is of course different on them. So I think what happens in families, no matter what the topic at hand, is that we’re often trying to figure out how to do things, our way how to keep the best of what we might have learned in our families of origin and how to meld that with the with the person we’ve yoked our life to, or and the people that we’ve birth into being and so figuring out how do we how do we bring our own wisdom and our own intentionality to Things like money discussions, are we even going to talk about money? Are we going to protect kids from money discussions, you know, at that level, for example, some of us grew up where the only exposure we had to Money Talks was through hearing our parents fight about it. And so we might go in the other direction and decide we will, we will never talk about money in front of the kids. And some of us might take that same background, and, and decide that money will become a frequent source of conversation and something that we intentionally build skill in. And so it’s it really varies from family to family land. But I think, you know, everybody, every family, whether consciously or unconsciously, transmits messages about money. And so we why not make them conscious? Why not talk about what matters to us? Why not talk about the need to develop and keep up marketable skills across the lifespan? Why not talk about giving? And how we discern how much to give, and to whom? Why not talk about the proper use of credit? And how you can get into trouble with why not talk about our own regrets as parents, why not give kids the chance to make their own mistakes with small amounts of money, so that they can learn important lessons before they leave our home?

So I’m curious, what did that look like in your own home as somebody who you know, was on tackles this topic from so many different angles, and so many different stakeholder groups, etc. But when it came to your own children, what kind of approach did you use?

Oh, you know, it’s still happening to this day. As you know, one child is preparing to go out on his own and figuring out how much can he afford? And should he look for a place on his own? Or should he look for a place with roommates? And how do you find trustworthy roommates if they’re not your, you know, your friends? So, you know, it’s it’s coming into play at that level, we certainly did decide to use an allowance as a teaching instrument as as what I call the financial apprenticeship model of parenting, right? So teach kids about, you know, this, you get this as a condition of just agreeing to learn about money. It’s not dependent on chores, it’s not dependent on my being in a good mood. This you get every week and or every month, and you learn about how money works through this experience.

It’s interesting, because, you know, it would be interesting to know what kind of conversations have been going on about money within families during this pandemic, when it seems that that is one of the top three themes that we’re inundated by on a daily basis, because of the circumstances that we find ourselves in. How would you like, how more important is financial literacy, in your opinion, because of the time that we’re currently living through.

As a mental health clinician, one of the things that I have been really struck by was is the very real link between savings. And I mean, let me put it I’ll give you some onomatopoeia here. Savings and sanity between savings and, and being able to stay mentally well, that has that that those findings began emerging within a couple of months of the pandemic, we were getting really robust findings, and it’s done nothing but increase. So we know that the biggest, the biggest risks to mental well-being right now are loneliness, and lack of savings. So I’m hoping that within more and more families, we are seeing that in families that can afford it. The savings rates are higher than they’ve been for generations within Canada and in families where they just have not been able, they’ve run out of savings. I think the conversations are going much more about how can we how do we flexibly To adapt to the new economic reality, you know, what can we you know, there’s only so much we can cut but what can we cut? And how can we be creative with assets that we have? What skills can we bring forward and try and monetize? What marketable skills do we need to learn? Do we need to develop in order to safeguard our well-being as a family? What alternative financial resources Can we tap into? You know, I think I think it’s been a masterclass this pandemic and in what’s that overworked word pivoting? Right, a masterclass in pivoting within the financial domain. It’s been a masterclass with an all family around how to negotiate rates, the as resources become scarcer, you have to be making your arguing your case about why this versus that. So there’s a lot of financial messaging that’s happening. And the challenge, of course, is to make sure that we keep it tender. We keep it loving, and that we keep it productive.
When ideally, should these types of conversations or interactions happen between parent and child as a relates to talking about money and finances?

Well, you know, I think it’s, I think it’s happening all the time. And so when you can make it you can make a point of just being conscious about it, oh, I’m, we’re talking about money, right here, it’s let’s, let’s make this a good experience. So what happens when you go shopping together and talk to your kids about why the $7 pair of plastic shoes may not be the good deal that they were hoping that they would be even though they’re so sparkly and so pretty, and why the $200 pair of running shoes might not be within your family’s either ethic or, or capacity to purchase for them, right? So so just the way that values get get, can get discussed, the way that trade-offs can get discussed during everyday purchases, you do have to think about the developmental needs of the child, right. And mostly what kids need from us as parents is a sense of safety and optimism that we’re going to be okay. And so if if you’re feeling not okay, as a parent, that isn’t necessarily the best thing to be sharing with your child. Sometimes they can see that you’re feeling not okay, and it’s sort of your job to, to let them know that grown ups feel this way sometimes. And we always have found our way through before, and we’re going to do it again, because that’s what our family does, you know, to, to continue to build in messages of optimism, when hard things have to happen to be candid about that. But, but always to just try and remember that our primary job as parents is to keep our kids safe. And to give them a sense of hope about the future.

How would you go about describing what a healthy attitude towards finances looks like, and the corresponding behaviors to those attitudes?

You know, it’s, it’s funny, because, in some ways, the messages that we have to impart to our kids, they sound polar opposite when I say those, so. So, you know, one message is to teach your kids that money is really important. And another message to teach your kids is that money is not important at all. So, you know, it’s important in that it gives you options and options are good. And generally, having money is way better than having no money. And so there’s that aspect of it and all that that implies, you know, on my website, I’ve got a perhaps we can link it for people if they’re interested, Lianne, but, you know, I’ve got a blog on what I think are the are those the top 10 skills needed for 21st century financial survival. And if you look at that post, you’ll notice that these are things that actually go across the lifespan. They do not end these skills, by the time somebody reaches the age of 18. Already, they’re ongoing, right? Like how do you protect yourself and your assets from predators. That’s a boy, that’s something that you’re going to really have to learn again, when you become a senior citizen, when we look at the rates of, you know, fraud, for example, when we another skill on that list is how to transfer wealth, right? That’s, that’s, that’s not something that you talk about to your 13-year old. But what you do talk about with your 13-year old and your six-year old, are, you know, how money matters matters, how it works, how savings work, how earnings work, over time, you teach them how to negotiate. You know, turns out boys and girls in Canada earn different allowances, like, holy cow, we’ve got gender gaps going on in our own family, right, so so to be sort of becoming more and more woke ourselves as parents and, and teaching those skills. But remember, I said there’s that other that sort of corollary, which is that there’s lots of ways in which money doesn’t matter at all. Doesn’t matter what your net worth is, you are a worthwhile person, and everybody that we interact with, you know, it’s our family value, that everybody’s is a person of worth, and that we don’t make judgments or distinctions based on that, you know, that. So that’s, it’s, it’s this because money is so nuanced, you have to make sure that you’re not inadvertently neglecting one side or the other depending on where you tend to lean with respect to your money, mindset.

In your work as a clinical neuropsychologist, where you’re looking at the behavioral relationship, I guess, between the brain and behavior, or the relationship between the brain and behavior, I wonder what strikes you in terms of some of your main observations as it relates to financial literacy?

Well, you know, from a learning perspective, from a teaching perspective, if you’re a parent or an educator, we know that learning sticks when it’s tied to real life issues. And that’s one of the reasons why allowances are just so genius, right? Like, it’s one thing to talk about how it’s a good thing to delay gratification. It’s another thing to recognize that if you bought, if you were allowed to spend your money on, on some really unfortunate product that fell apart, or you had a really big trip to the 711. And that you can’t then buy the game that you wanted to buy or go to the movies. Remember that time when we get rid of movies. The kids learn that, oh, they’re my choices have consequences for my future self even like myself next week. So that’s a really important thing. I think it’s as a neuropsychologist another thing. So tying lessons to practical life experiences is one thing that just being that is a really effective teaching modality. It’s a really ineffective learning modalities, what I should have said, I guess the other thing is that how how we think about money, kind of starts to create ruts in our own brain and our own mind, that we’re always looking for evidence to confirm that we’re right. So if we believe that rich people are bad, or poor people deserve it, we will find all kinds of evidence to support our view. And I think one of the really that’s kind of an unfortunate part of our own neuro psychology is that we’re constantly looking for shortcuts and, and, and ways of making sense of complex environments. But the good news is that we too, can, can pivot we too can change in response to, for example, just if we’ve decided long time ago that we were bad about money or that we can’t have productive money conversations. We can set ourselves up for different experiences, we can look for evidence that we’re actually getting better at this thing. We can ask for help. We can seek out some of that help professionally if we need it. That that wherever it is that we’re aware that we’re kind of limited in our thinking about money in our dealings with money, if we would develop that growth mindset that we can get better at whatever it is, we need to get better at whatever it is we choose to get better at. That’s a really important lesson from neuro psychology.

What would you say to parents who may be listening or watching this interview who say, you know, all of the messaging out there right now is and has been for many years, it’s so convoluted, you know, most Canadians are living paycheck to paycheck, you know, governments are at all levels have, you know, debt loads and increasing deficits. And so, you know, that kind of messaging just kind of goes counter to the idea of saving, and knowing your limits, and barriers, and all those things that, that you’ve alluded to, what would you say to those parents as they strive to, to educate their kids on this subject matter?

Well, again, we have to, we just have to have a relentless commitment to telling the truth that we live in a consumer culture that, you know, literally 24 hours a day, we can be spending our way into disaster for our family, we can take down our whole family through some of these decisions that we make. And so for parents to talk to kids to help them develop their own self-management skills. That, you know, when the new iPhone comes out, you’re really going to want that all of us are really going to want that. How should we deal with deciding whether that thing that we want is something that we should be devoting our money to? And how do we live with feelings of envy or disappoint? I think, you know, when I grew up, it was just like, stop talking about it, buck up. And sometimes that works. And sometimes that just leaves this real ache in your heart that you don’t know how to settle. But the fact is, that as parents, we can teach kids how to deal with difficult emotions, just like we can teach kids about money. And so if we bring these two realms together, about, about being aware of marketing messages, and at the same time, knowing how to handle when you’ve been triggered by marketing, but what it is to, you know, turn away from, from the things that make us want to spend and go out and have some experiences that cost no money whatsoever, how to take a breath between when we just opened up that fancy schmancy mail order catalog and became aware of all kinds of things we need that we didn’t even know existed four minutes ago, that if we close that catalog, and recycle it, the if we truly need that thing, it’ll come back, but we don’t have to act on it right now. You know, those are the kinds of ways of, of building insight and what psychologists call self-efficacy. So the belief that you have what it takes to reach certain goals, and sometimes that what it takes is self-management, and sometimes it’s actual skill at some pragmatic thing out there. And sometimes it’s social skill, how to have successful conversations with people how to negotiate and renegotiate. So in other words, this isn’t just about the math, it’s also about the person.

I’m wondering if you have an example of any of the interactions that you have and the various things that you do that would clearly and succinctly illustrate the relationship between financial health and mental health for people who may be don’t see that line right away? Is there some kind of anecdote that you’ve been, you’ve experienced, witnessed, encountered that might help illustrate that?

Oh, boy, I’d say it’s even hard to like, I feel like my, my head just turned into one of those cards shuffle, there’s like, there’s so many things. Well, let’s start at the really basic level. Like, what if you can’t afford your antidepressants? Right, there’s a direct link between financial health and money. To help one of your so now we’re going to talk about sort of the, how poverty is a determinant of ill health, right. So if you’re living in an unsafe part of town, if you can’t, if you can’t fix your car, so that you can’t reliably get to your appointments or even to your own job. It’s like every single decision that you make when you are in financial, in really straightened or tight financial circumstances, every single decision ends up having that much more impact on your life. And it it, it is, kind of there’s a cognitive tax to pay on that. We know that. Over time, you just, it’s it’s harder to make good decisions, you just get worn out by that. And this isn’t just you know, just so you know, I’m not talking about people living in cardboard boxes, this is also true of folks who are middle class or high net worth, where they’ve made decisions based on on certain predict about certain predictions about what’s going to be coming in, and those predictions have not come true this year. So financial stress is hard at every income level. It’s just that obviously, as the poorer you are, the more the more basic and fundamental some of those health-related issues are. On speaking of it in in a more positive side, you know, the money mental health connection, we talked earlier about how money often gives us some choice. It gives you the choice of whether you can go to school or not, it gives you the choice of whether you can take a risk in starting up a new company or moving to a different job or saying yes to a partner who lives in a different city. And, and we know that the most mentally healthy people are people who believe that they are in control, or that they have huge influence over big important outcomes in their life. And so to the extent to which money is one of those ways, that we feel like we have some agency in what happens to us, the more likely we are to be in a in a mentally healthy space.

Do you believe that the pandemic is a one of these key turning points in in many lives that will not only change potential attitudes towards money and financial management, but that it will be sustained long after we’re out of this particular period?
Yes, I think both for better and for worse. I you know. So what I’m thinking about, as I’m laughing are, you know, the elderly relatives that we went to visit when I was a kid, and my folks would sort of whisper to us, you know, so and so grew up during the Depression. If she serves you stale cereal, just eat it. Don’t complain, right? It was recognized that having lived through the depression, you would you would in some ways bear the the psychological and the behavioral marks of that throughout your lifespan. You would get really hinky for example, if you saw somebody wasting money, you would have a strong opinion that you would not hesitate to voice about that. And I think the pandemic will do this in in certain ways. You know, I’m seeing so much more, I would say so much more sensitivity to the to the discrepancies that exists even within our own families, let alone within, you know, our communities. I’m we we have seen that savings rates have ramped up and there is some notion that maybe there’s going to be this pent up like way experience of people spending. But I think there’s going to be lots of families where they say, you know what, let’s not go back to how it used to be for us. let’s let’s turn into savers the way that no Turn away from some of the more unfortunate aspects of Western culture that that consumerism. in psychology, we speak about money scripts, that these are, these are rules about money that we kind of discerned at a very young age or or we think that we’ve learned at a very young age. And I mentioned some of them, right, like, wealthy people aren’t to be trusted, or wealthy people are the only people who can be trusted, or I must always look the part, or it doesn’t matter how I look, none of that matters at all, these are lessons that get formed at a very young age. And it’s not that those lessons are, are either completely wrong or totally wrong are always wrong. When you think about what a script is Leon, right, if you’ve if you’ve been given the script to a fellow, you are not going to be creating a laugh riot in, in the play, right, like this is a script is is rigid and unyielding and inflexible. It’s there’s only so much leeway that you have in interpreting a fellow. And similarly the money lessons that are formed during times of great emotionality in childhood, sometimes come into adulthood, with a certain degree of rigidity and lack of flexibility. And there is a lot of money emotion in families right now. So we just have to be careful about what it is that we’re communicating. And as we emerge from this, and our, you know, in our own family lives, I can, you know, speak from my family about just the degree of financial setback that we’ve experienced in our own household, and the degree of life challenge that we’ve experienced in our, in our young, you know, in our, in our children, what it is that they’ve gone through and continue to go through, and how that might be affecting their view of the future. We have to consciously sort of be surfacing that and saying, really, is that the lesson we meant to convey? Is that the lesson that you should be taking forward with you, let’s have a look at this. And make sure that that if if we got kind of crazy in there, that didn’t turn into something that you should be embroidering in a sampler and sticking on your wall as a big life lesson, let’s let’s think about what it is that we really, that we really know, now that we’re on the other side of it.

In closing, I’m wondering if you have any tips that you would want to share with parents in terms of successfully tackling money talks with their children, whatever age group, they’re in whatever their financial situation is, how would you go about suggesting that they set them up, set themselves up for success?

You know, it’s I think, I think it’s hard. You’re already making it hard if you’re thinking about the talk, right? The sex talk, the money talk. Think about it more as the kinds of conversations that happen when you’re when you’re just going through the grocery store, like, Hey, here’s a condom, you know, what economists or, hey, here’s two boxes of cereal that are on sale, how do we make that distinction? Right? Just trying to weave it into, into everyday family life is is one of the big things that I would say, try not to make it so big. That it’s a talk that we have the organization that sponsors that to camp event that you mentioned, you know, they’ve got wonderful online resources, your publication, your videos are also great online resources and so to be just, you know, every week if you as parents can be deliberately saying, Okay, I’m just gonna look up something and we’ll see about talking about it at supper tonight. And, and, and just taking it from there.

Dr. Moira Somers, tons of wonderful insight and certainly strategies and tips for parents to look into. Thank you so much for your time today.

It was a pleasure.