Episode 227: How to Clear a Money Fog With Mikelann Valterra
What can I afford? How much is enough? What is now possible? Now these are big questions you want to be able to answer.
Mikelann Valterra’s mission to help all of us heal our relationship with money and really understand how to use it in today's world. What I hope you listen for today as we talk about her new book, Rise Above the Money Fog, is how we talk about money with our loved ones.
Mikelann is a thought leader in the industry of financial psychology. She has written, spoken and been interviewed extensively on powerful practical ways to reduce money anxiety, and she teaches effective methods for earning, saving, reducing debt, and managing money.
Clearing the money fog
Years ago, when Mikelann was asked about her superpower, without missing a beat she said, “I help women rise above the money fog.” The phrase became a lightning rod because so many people would call her and describe being in a fog.
It's financial vagueness that induces feelings of anxiety. When you hear people talking about money, it's this practical, neutral tool. But the truth is money is so emotional, says Mikelann.
The money fog is this combination of the feelings we feel as a result of not being clear about our money. Fog stands for stands for when we're in fear about our money, when we're in overwhelm, or when we feel guilty around our money.
Fear, overwhelm, and guilt are all signposts that you might be in the fog, which impacts our life in so many ways.
“There's just all of this secrecy around money that we all carry because we have this message from childhood that says, don't talk about money,” says Mikelann.
Family and money
In her book, Mikelann describes three different types of families.
- The periodically tense family: You grow up and you're not super communicative, but it's an average, loving family. But things happen. In most families there are tense, difficult things that happen, such as divorce or illness. The message is don't talk about money. It's rude to talk about money. Don't ask dad what he makes.
- The high conflict family: These are the unhappy families where you feel like you’re walking on eggshells. You might have heard your family fight about money and you might remember that money makes mom cry or money hurts adult relationships.
- Supposedly ideal family: This is the family where money was talked about, but it was done behind closed doors. So people that grow up in the supposedly ideal family as adults often describe themselves as being bored when it comes to money talk and being disinterested and disconnected when it comes to money. They recognize money is important but it stresses them out.
Our job as parents is to normalize talking about money. For a lot of parents, the first time they talk about money is college funding – that’s a bit late. When it comes to age-appropriate conversations, Mikelann recommends helping children look at what they need versus what they want.
List making with kids – what they want as gifts, or what they need for school – is a good way to talk about money. Then over time you are bringing your kids into family meetings to talk about what the family is doing this year. Some things cost a lot of money, and that's okay. Let's look at where we want to choose to put our money as a family.
Three core money questions
As people rise out of the money fog, they come to the place in their lives where they know the answers to what they can afford, how much is enough, and what's possible in their lives.
The problem is when transition happens, the answers to those three questions tend to have changed. And that can catch us by surprise. How much you can afford might change if you get a divorce or if you move to a new city.
And while some transitions are not voluntary, we still have to ask the questions. When people aren't clear about their money, it does lead some people to overspend, but it leads some people to underspend.
Some people over earn; they get locked in golden handcuffs because they're not sure how much is enough. Other people under earn because they again, they don't know how much is enough. They don't know what the goal is around earning. They know something's not quite working, but there's no clarity there. That's why the money fog creates so much anxiety.
Most of us aren't aware of how much fog we're in until we're out of it.
How much is enough?
Mikelann says the answer to knowing how much is enough for you is to create an annual income and spending plan.
“What's exciting is it's about vision,” says Mikelann. “What do you want your year to look like? And now let's put numbers in it.”
She says most of the fear lies in getting to the number. But a lot of times, the number is different or lower than the what’s in her client’s heads. Clear the money fog; it's powerful and empowering.
Free gift for listeners
Are you trapped in a money fog? Take the quiz and receive a free ebook.
