b&b185 AFCPE Keynotes pt.1 Behavioral Finance & Financial Coaching

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Three Keynotes from the AFCPE share their expertise:

Kristen Berman, Common Cents Lab, Irrational Labs, studies behavioral economics and behavioral finance, which is basically how people actually act in the marketplace, as opposed to how they should or would perform if they were completely rational. To a large extent, social cues and our own fears and feeling around money dictate how we spend money–and here’s how.

Lillian Singh is the Director of the Racial Wealth Divide Initiative at Prosperity Now, and supports leaders of high-impact non-profits of color and programming with them. She speaks out about the lack of funding they receive, and the dangerous reality her leaders face everyday in order to help others.

Saundra Davis is the executive director and founder of Sage Financial Solutions, a Prosperity Now organization dedicated to helping communities develop comprehensive financial education programs. She is also a leader of the Financial Fitness Coach program through AFCPE. Here, she explains the difference between a financial planner, a financial counselor and a financial coach, and what financial coaching can really do for you.

Episode Highlights:

Christine Burman: We kind of look around our environment for cues around how we should act…Whether it be like the coffee shop I went to yesterday or there’s a line and so that implies that that’s a good coffee.

Christine Burman: The essence of behavioral science is that it’s not around knowing information. It’s around kinda looking at our environment and then we’re influenced by that–those kind of cues.

Christine Burman: The sad thing about money is that we see everybody spending it. We don’t see people saving it.

Dyalekt: Mama liked always to say a sale is not a sale if you still can’t afford it.

Christine Burman: We tend to want to increase our lifestyle too quickly. We tend to want to…buy the house, buy the car…and basically once you do that you can’t go back.

Christine Burman: What would change your behavior is if you, A, just didn’t go…if you yourself kind of crafted your own environment…you’re changing your environment to help you achieve your goals.

Christine Burman: Some of it is crafting your own environment to improve the likelihood of success.

Christine Burman: Imagine that you have created a savings account in your bank account that said…if you have kids “Kids College Savings” or, if you wanna save for a vacation, “Vacation”…you’re changing how your bank account looks–you’re making a hack to your life that says “I’m gonna create the envelope system.”

Christine Burman: Labeling and mental accounting’s very nice. We kinda compare it to a Pringle can. [With] two Pringle cans, when you get to the bottom you likely stop. You’re not gonna go and immediately get to the second one, versus if there were just one whole row, you’d probably just keep going.

Lillian Singh: One of the things I learned early on through the fight of my mother is, you know, it’s okay to ask for help, to not be ashamed of needing public services and social services.

Lillian Singh: I lived the racial wealth divide and now I can probably say because of my mother and my family members I’m one of the first people in my family to buy a home.

Lillian Singh: Trying to build bridges between non-profits led by people of color serving people of color in the community.

Lillian Singh: Very few funders are willing to really put themselves on the line and say to X grantee or nonprofit organization leader of color that I’m willing to invest in this vision that you have.

Lillian Singh: The majority of our leaders live in the communities in which they serve. They go, they get educations, and they go back.

Lillian Singh: The majority of our leaders, they see this nonprofit sector not as like a stepping stone to a better career in the private sector but really like as an institutional investment in their own livelihood, because guess what? Their families are still there. My family is still in South Central.

Lillian Singh: One of our partners in Chicago said it best “if you wanna find these organizations and you drive to their neighborhood, the first step is that you gotta get out of the car.”

Lillian Singh: They’re operating in that chaos, day in, day out. I think the lessons are intangible unless you’re in it with them.

Lillian Singh: My leaders, like, times when they leave their homes, often times it’s just straight down the street, but then it’s not often times, like, a safe space for them–like even physically for them to be there but they still choose to go. Those are the intangibles that I can’t really teach you how to do, you gotta get out of the car and go see it yourself.

Saundra Davis: A coach is more focused on a client’s underlying value that’s connected to what their goal is.

Saundra Davis: They might need my expertise. I have information, but they know themselves best, and so everything that I do is in service of them excavating what matters most to them, what are the opportunities and the obstacles, and what are they willing to do about it? Because, see, I don’t do the work, they do the work, and so a lot of those aha! moments happen when we’re apart.

Saundra Davis: As a coach I’m not there to be their hero.

Saundra Davis: If I haven’t taken the time to find out what’s gonna make them implement the plan, I have not served them well.

Saundra Davis: When I’m teaching people to become coaches we’re throttling back the expert and really allowing room for that client to figure out how do they step into their own power around their own dollars.

Saundra Davis: So even when circumstances are dire, we want that client to feel powerful, that they have choice.

Saundra Davis: [When looking for a coach] start with “tell me how you would work with me.”

Saundra Davis: Trust yourself.

Saundra Davis: This is not linear. You might have a client that’s ready in one stage of their lives and not in another. This is a cha-cha–sometimes a little spin in the middle.

Saundra Davis: I don’t need to be anyone else’s hero. I want them to own their own power.

Saundra Davis: If I empower you I own your power and that’s just not real.

Saundra Davis: I don’t believe we can motivate other people. Motivation, in my perspective, comes from within.

Saundra Davis: If you’re talking to someone and…they’re too attached to their perception of your situation, notice these things.

Saundra Davis: You are always in control, and here’s the hard part cause when you are in the financial distress it doesn’t feel like that.

Saundra Davis: It’s important to understand that intention is not the same as impact. So, if somebody is impacting you in a way that does not feel right, you owe it to yourself to find someone who can.