Many See Finances Through Rose-Colored Glasses

San Francisco Examiner/Chronicle, Tuesday, January 23, 1996, by Edward Iwata

THE LOVE OF MONEY MAY not be the root of all evil. But it sure influences our values, our behaviors, our psychologies – for better or worse.

Look at the San Francisco lawyer who foolishly spent her money or loaned it to family or friends each time she neared $100,000 in earnings.

Her fear? That her blue-collar siblings and pals from the old neighborhood would resent her professional success.

“She was the first in her family to have a college education, which carried her into another class,” said Aislyn O’Coyle, a financial counselor and the owner of Reversal of Fortune, a San Francisco firm that advises people on money management and psychological issues.

“The more money she made, the more she feared rejection from her loved ones.”

Or take the young Peninsula couple who had hoped to get married last year. The woman was $30,000 in debt from educational loans. She wanted to spread out the payments. But her fiance, worried about their credit, urged her to pay off the loans.

“It became very emotional, and they eventually broke up,” said Cheryl Broussard, author of “The Black Woman’s Guide to Financial Independence” and a principal at Broussard & Douglas Inc. in Palo Alto. “They agreed it was good they talked through the problem before they got married.”

Or consider the frugal Marin County businessman – a

“money bulimic” – who would go on wild saving and spending binges. He’d save $5,000 or $10,000, then blow it on gambling vacations at Lake Tahoe or Reno.

“He feared he was becoming as parsimonious as his father,” O’Coyle said. “He was also worried that this was the end of his youth.”

Financial experts say that money may be the scariest taboo next to sex. Nearly everyone gets tense when talking about their spending and savings habits, and for good reason: Money reflects some of our deepest values.

“There’s an emotional component to money that’s so deeply rooted that most people don’t see it or acknowledge it,” said David Yeske, a financial planner at Yeske & Co. in San Francisco.

Financial experts and counselors say that people learn their cultural and family attitudes toward money as children.

Their fathers or mothers may have been compulsive spenders or savers. Religious parents may see money as an evil temptation. Other families might hide their wealth, or never talk about it. Families who survived the Depression may have cracked down too hard on their kids, who rebel as adults and spend too much.

Broussard said that schools and colleges also fail to teach vulnerable students about wise money management, and the cycle of ignorance keeps spinning from generation to generation.

Society’s attitudes toward the sexes also come into play, according to O’Coyle. It’s fine for a businessman to boast about his new yacht. But it’s frowned upon for a successful businesswoman to talk up her big salary or promotion.

Often, people in financial denial are forced to take action by a crisis or a personal disaster, such as a divorce or death in the family.

Good advisors will act as counselors and create a warm, supportive environment for clients to talk freely. They’ll listen to their clients’ needs, probe for their attitudes about money, watch their body language, unearth hidden issues.

“I’ll ask a lot of questions,” said Norman Boone, a financial planner and registered investment advisor at Boone & Associates in San Francisco. “What’s important to them about money? What drives their values?”

One spouse may favor a better lifestyle, a larger home, a fancier car. The other spouse may place a greater value on economic safety and security, Boone said.

Advisors will then match the clients’ values and philosophical goals with the right savings and investment strategies.

“People may have wonderful earning power, but they don’t have much knowledge about how money affects them emotionally,” O’Coyle said. “There’s a lot of silence around money, and hopefully that will change.” <