Category Archives: Money Management

What Neuroscience Says About Making Financial Decisions

This post is in collaboration with BetterHelp.

Picture of a hard, plastic brain in a blue room. The brain is lit up mostly red with one section near the back lit up green.

Over the past several decades, our knowledge of neuroscience has skyrocketed. With it, our understanding of mental health has also expanded

Understanding how our brain works physically has major implications in the field of psychology. Understanding how our brain is physically wired can help us rewire mental workarounds. It can also tell us what medication may help alleviate the physical chemistry going on in our brains when necessary.

Because so much of our financial behaviors are based on our psychology and past experiences, this increased knowledge in the field of neuroscience can also help us make better decisions with our money.

Neuroscience and financial decision making

A 2017 study sponsored by Northwestern Mutual measured neural activity during the decision-making process. Some of the study participants were given assistance as they were making financial decisions. Others were left to make those decisions on their own.

Those that did not receive assistance experienced:

  • 20% more stress and difficulty when making a decision.
  • 28% less understanding of their financial decisions.
  • 21% less relaxed when making those financial decisions.

The study even included brain scans, visually showing the difference in brain functioning between the two groups.

The neuroscience shows that simply having someone to guide you through the process lessens your anxiety levels when making financial decisions. It helps you understand those decisions better, and can thus result in better results.

Ways to get assistance with financial decision making

How does one get this assistance that the neuroscience showed to be so important?

There are several ways to seek financial assistance. The best one for you will depend on your budget and the specific financial decision you’re trying to make.

Financial advisors and coaches

If you have money to spend on professional help, you can look for people with letters after their name.

For example, if you want help filing your taxes, you could look for a Certified Public Accountant (CPA) or enrolled agent (EA) with the IRS.

If you’re planning for retirement and have a complex array of financial products, you may want to find a Certified Financial Planner (CFP) or Certified Financial Advisor (CFA).

If you just need help getting your day-to-day money on track and want one-on-one attention, you might look for a coach who has their Certified Financial Education Instructor (CFEI) or Accredited Financial Counselor (AFC) certification.

Purchasing a home

If you participate in a first-time homebuyer program, you will often be required to complete a first-time homebuyer education course.

This may seem like just another hoop to jump through. But it’s often a positive thing for you as a buyer. You get access to that assistance that neuroscience has shown to be so important. And you get it through a unique process you’re only likely to go through a couple times in your life.

Day-to-day finances

You might need specific help with a specific financial problem. But if you just need general money advice, turning to financial influencers you trust can be a good way to get the support you need.

For example, when Tiffany Aliche launched the first Live Richer Challenge, she did so using her background in early childhood education. She gives participants one thing to do per day. A bite-sized task instead of a list of overwhelming decisions.

By the time you get to the end of the initial course, you have a budget, a finger on the pulse of your spending habits, and an idea of what it will take to get out of debt.

The Northwestern study showed that this tactic achieves the goal of alleviating stress. Your brain doesn’t have to worry or get overwhelmed with big decisions. It can focus on the one task in front of it, increasing your motivation as you successfully complete each task, building momentum and confidence along the way.

What to Do When You Can’t Bring in An Income

This post is in collaboration with BetterHelp.

A few weeks ago, The Plutus Awards asked this question on Twitter:

What do you do when difficulties enter your life and you can no longer bring in any income?

It’s a tough one to answer, partially because there really aren’t any great answers.

I mean, the best answer is to have a huge emergency fund before disaster strikes. But you never know when disaster will strike, causing you to lose your ability to bring in an income.

And perpetually maintaining an emergency fund that would cover 12 months+ of expenses is often, though not always, a mathematically unobtainable goal for average Americans.

What to do when you have no income and no savings.

I thought about the times in my life when traditional income wasn’t obtainable, or my ability to work was diminished so dramatically that my income was insufficient to my needs. More than once, an emergency fund saved me.

But also more than once, I’ve been caught with empty pockets.

Today, I’ll go through the things that I do when I’ve been caught with empty pockets. Because once disaster strikes, it’s too late to build that emergency fund.

And when you’re sitting nine months into a pandemic where money has been scarce or dangerous to obtain, you can’t build savings with income you don’t have.

Here are the basic six steps I identified in my past successful behavior in the midst of a financial disaster.

Forgive yourself.

Or at least attempt to.

Because here’s the thing about disasters: More often than not, they’re brought on by something outside of your control.

As Americans, we live in a culture where unadulterated individualism is a badge of honor. If anything is outside of our control, it can threaten our very sense of identity and self-worth. So instead of recognizing those things outside of our control, we internalize blame.

I should have saved more.

This must have been caused by my own irresponsibility. I could have done things differently in retrospect, so that must mean I am the one responsible for this period of my own suffering.

If I can’t bring in an income, what good am I to anybody?

These are not helpful thoughts. Some of them are blatantly inaccurate and stem from extremely problematic norms we’ve inherited from our culture.

We often blame ourselves so we don’t have to acknowledge our own lack of control in the grand scheme of things. We feel safer berating ourselves than recognizing that in life, there will be periods of time where we cannot get by without outside help.

That help may be emotional, spiritual, physical, or — yes — even monetary.

If we blame ourselves too much, we can actually pull away when help is offered and available. We’ve convinced ourselves we’re somehow undeserving.

With a little work, we can change those thoughts into more positive, helpful ones. This work is especially effective when go through it with a therapist.

I have never completed any of the following steps without first forgiving myself at some level.

I haven’t done it without recognizing that I’ve done the best I can with the resources I had at the time, and that there are, in fact, things in my financial life outside of my control as an individual. Whether I like it or not.

Assess resources.

After I’ve worked on forgiving myself, I start to make a plan on how to get by and hopefully make things better over the long-term.

The first step on that journey is assessing resources. There are three resources I target:

  • Resources can definitely be money. You might not have a 12-month emergency fund, but every penny you have socked away into savings can make a difference when your bank balance is low.
  • I also like to look at resources that aren’t money, but could be turned into cash with minimal effort. One way to do this is selling items around your home that don’t carry sentimental value.
  • Another huge resource is time. Sometimes, when you’re not able to bring in an income, the same thing limiting your income may be limiting your time. If you’re lucky and it’s not restricting your time, you might find that while you can’t secure a full-time income right now, you can find ways to make money on the side to help make ends meet.

Assess government assistance.

Do not let the judgement of others deter you from accessing the resources that can help you get by. If this second stimulus package ever gets signed, programs you can look to may include but are not limited to:

  • Expanded unemployment benefits.
  • Potentially food stamps (SNAP benefits) even if you’re on unemployment.
  • A second round of PPP.
  • Potential rent assistance depending on your state and/or locality.

Look for grants.

In times of distress, I also look to grants. For example, when Coronavirus hit, I was awarded a grant from PEN America. It helped me smooth over bumps as I got used to this new ‘normal’ and attempted to find new ways to function in my career.

Honestly, I haven’t seen as many grants available as the pandemic wears on. If you can find them, apply, though don’t expect the search to be easy. Also bear in mind that if a grant is easy to find, you may have a lot more competition than a grant you have to dig for.

There are grants for other life disasters outside of the pandemic.

For example, grants for recovery from domestic violence are out there, though they often come with a requirement that you’ve been living apart from your abuser for a certain period of time.

While in an ideal world, Medicaid and/or Medicare would cover all necessary equipment related to a disability in all fifty states, that’s not the reality we live in. There are nonprofits out there that attempt to fill the gaps by issuing grants for financial emergencies related to disability or medical need.

Whatever is impacting your ability to bring in an income, search for grants related to that topic. You can also look for grants tailored to specific expenses and qualify based on your income level.

Make a plan to get by.

Now I know all the resources available to me, whether they’re resources I own, resources from the government, or grants from outside organizations.

I have all the information I need to make a plan.

The first thing I do is prioritize my expenses. The things I can’t live without, like food and shelter. Any resources I have that can cover these things for the next twelve months, like my own cash, rental assistance or SNAP benefits, are applied first. Without food and shelter, everything else gets harder, so these expenses must be covered first.

Then I’ll eliminate any frivolous expenses, like paid subscriptions to services I’m not actually using or don’t actually need. During the pandemic, it’s probably been financially easy to cut out expenses for things like nights out with friends or activities for the children. Even though it’s been emotionally difficult, it’s an emotionally-difficult decision a lot of us would have made anyways due to the lethal nature of this easy-to-spread virus.

This sometimes-necessary form of disaster budgeting doesn’t leave you feeling super great or empowered at the end.

At least it doesn’t for me.

It usually shows that things are going to be financially difficult to impossible in the near future.

Which is why I go on to complete one final step.

Make a plan to come out stronger on the other side.

I can do hard things for set periods of time.

But it’s harder to do those hard things if I don’t feel like there’s an end goal. A light at the end of the tunnel. A way out.

So after I make my disaster budget, I also make a plan to come out stronger on the other side.

Here are some examples of plans you might make to do just that.

Go back to school.

At one period in my life, I had a choice: I could keep working at my less-than-$10/hr job and continue scraping by forever in the name of pride and individual responsibility, or I could access government benefits and go back to school. Because of other circumstances in my life at the time, I could not do both.

The latter would require both humility and a shift in how I viewed myself in the world. But it would lead to a higher income and more stability for my family long-term.

Reassess your business goals.

During this period where you’ve lost income, you might have to move differently in your business.

Did you lose a W-2 job that you don’t see coming back any time soon? You might consider building a freelancing business.

If you have a business, you might start focusing the limited time you have to work on behind-the-scenes efforts. This can prepare you for a successful relaunch when the disaster is over. It’s a shift from the day-to-day grind that used to provide an income, but sets you up for future success.

Get a clean slate.

If your money situation is in enough peril and you’re carrying debt, erasing or restructuring your debt may help you get to a financially-stable place at a quicker pace. Pursuing bankruptcy is a nuanced decision that isn’t right for everyone.

Some of your money — such as savings and investments held in certain retirement accounts — is protected from bankruptcy proceedings.

But there are definitely negative effects like a diminishing hit to your credit report over the next seven years and repossession of bank-owned assets. If you’re going to be behind on payments for the next seven years, anyways, it might be an option you want to research further. Just be sure to be thorough so you understand all the consequences.

Will this work?

Honestly, even the best-laid plans rarely turn out exactly the way I expect them to when a disaster hits. But by pursuing them, I’ve been able to open up future opportunities I didn’t even see coming.

Having a long-term plan to level up — even when I can’t immediately achieve — keeps me moving forward. Even when everything going on around me makes me feel frozen in place.

Favorite Money Journals for 2021

This post is in collaboration with Etsy. Much of Etsy is marked 60% off for Cyber Week Sales. Some of the below products are included in the sale.

Red text reading "Favorite 2021 Money Journals" being circled in black. Below, a pink notebook with a Black woman in business attire and sunglasses holding stacks of cash. Text on notebookos reads '2021 The Year of the Comeup'

We’ve all learned a lot about ourselves this year.

If one of the things you’ve learned is that your money’s a mess, don’t worry.

You’re not alone.

There are lots of tools out there to help you get back on track financially. Today, we’re going to look at money journals. Whether you want to rewrite your mental narrative around finances or track your debt payoff journey, there’s a money journal option for you.

Given tactfully to the right person, these money journals can also make great gifts or stocking stuffers.

Money Journals to Unravel Bad Financial Habits

We like to think of personal finance as neat little columns full of numbers. Numbers we’re fully in control of.

But in reality? The stories we tell ourselves about money are far more likely to dictate our behaviors than the numbers. Some of these stories we might be totally aware of. Others, we might have subconsciously absorbed from our parents, culture or personal interactions with the world around us.

Understanding these stories can help you change your behavior. Eradicate bad habits. Build healthy ones.

Here are some money journals that can help you unravel your money stories.

Year of the Come Up Money Journal

Text reads "2021 The Year of the Come Up". Below text is featured a cartoon image of a Black woman, wearing business attire and sunglasses, holding stacks of cash.

I love this energy.  This journal from CopperandBrassPaper has amazing cover art and is a blank notebook inside.

That’s not a bad thing. Sometimes money feelings need space to work themselves out. In fact, a blank notebook is the perfect thing to pair with the work of Eugenié George.

The Money Journal Financial Planner

Two copies of 'The Money Journal', one spiral, a darker cover is bound. Sitting on a white background next to a green plant.

This money journal from SistersforFI goes into things like mindset and money narratives. If you are pursuing financial independence — particularly in the vein of FIRE (financial independence/retire early) culture — this journal may be a good match for you.

On top of working through your mindset, the journal includes a basic budgeting page and a page full of (mostly) money challenges.

90-Day Guided Money Journey

Picture of printed pages of a money journal lying on a marble countertop.

This 90-Day Money Journal from SandraKStewart guides you through the process of reframing negative money thoughts into positive ones. At the end of every day, you’re asked to write out a takeaway. The program encourages not just contemplation, but action.

This is a digital download, meant to be printed after download.

Money Journals for Type A Personalities

Want a money journal that’s more oriented toward the hard numbers?

There are plenty. These journals — or budget planners — will help you get your money together on a day-to-day basis.

Day One Money Journal

Journal, pen and washi tape on a pink and yellow background. Notebook read, "One day or day one you decide" on the front.

Here’s another 90-day money journal. This one with a different orientation.

From FrugalCottageDesigns, the Day One Money Journal acts as a budget planner. It covers a wide array of categories for three months:

  • Goals
  • Debt payoff
  • Weekly expenses
  • Sinking funds
  • Investments
  • No-spend days
  • Space to track extra income

Goodnotes Compatible Financial Planner

Image of printed pages from a downloadable budget planner. This budget planner from shayhayashidigital covers similar territory, but it allows you to do so over the course of twelve months. Debt, savings, expense tracking and sinking funds are all covered. There’s also a page to plan not just your monthly budget, but your annual budget, too.

This is another one you’ll need to print as it’s a digital download. You could also use it with a program like Goodnotes or Notability.

In Case of Emergency Binder

Forms where you can record financial information overlaid with a blue cover reading 'In Case of Emergency Binder'If you’re a parent, your financial concerns have probably been heavier in 2020 than other years. Keeping your job and income is a heavy burden.

But let’s be real: We’ve also been facing the omnipresent question of death. How to keep our loved ones alive, yes. But also — what would happen if we caught this thing ourselves?

This emergency binder from SmartMoneyMamas tackles the hard questions. What would happen to your money if you died? Would anyone know the right account numbers? Would they know how to divvy up your cash according to your will? What would you want your kids to know, and what would you want their new guardians to know about them?

This is a digital download. You can choose to fill it out electronically.

Yes, Etsy also has adorable everything for children.

Money Journals for Visual Learners

If you’re more visually-motivated, you might want to check out these alternatives. They’re like money journals, except you’ll track your progress with charts and graphs rather than words and numbers.

Saving Goal Coloring Page

Origami birds flying out of a cage. Some are partially colored. Text reads 'Savings Goal Coloring Book'

This savings goal coloring page from BitchesGetRiches is built around the idea that you are 42% more likely to reach your goal if it’s written down. And if your goal is beautiful to look at, you’re more likely to stick with it.

The printable coloring page comes along with a calculator. It will help you figure out how much money each fragment of the bird is worth. If each section equals $X, you get to color one section in every time you save $X towards your goal. When you’ve colored in all the birds, you’ve reached your goal.

Debt Snowball Tracker

Debt snowball tracker visual tracking sheet on a white table.Part of the reason the debt snowball method is such an effective way to pay off debt is because your brain logs those little wins as early victories.

This debt snowball tracker from FrugasaurusVault reinforces those wins visually. With this printable, you’ll be able to draw your debts — from smallest to largest — by breaking them down into 5x5mm chunks.

Similar to the savings birds, each time you pay off $X,  you’ll get to color in one box. As you see your boxes fill, you’ll be able to visually track your debt payoff.

 

How Your ACE Score Affects Your Money Habits

This feature by Eugenié George is the latest in the Intersectional Money series. It is not intended to be a substitute for professional medical advice, diagnosis, or treatment. Always seek your physician’s advice or another qualified health provider with any questions regarding a medical condition. 

Economic inequity takes on many forms. One of the forms it takes is through trauma. This article will discuss Adverse Childhood Experiences and how they can affect Women of Color’s economic inequity. We will also cover steps to address the past with the present. 

Money Triggers

Imagine grocery shopping one sunny afternoon. You have all the right ingredients in your grocery cart, and you’re ready to purchase. 

But you have a taste for Honeycrisp apples. 

You look at the price tag and see that the apples are $3.49 a pound. That’s, like, a dollar more than any of the other apples! You have money to purchase the product, but you experience a weird uneasy feeling in your gut. Your brain is running several ideas: 

Girl, don’t waste your money on that! You can get cheaper apples at Kroger.

But on the other hand, apples are healthy, and you know what they say about apples and doctors.

You don’t have any money at all. 

If I had a man (or woman) who supported me, I could buy apples. 

I bet White people don’t have this problem. 

We can’t afford that because papa is looking for a new job. 

Now in the 35,000 thoughts that we run through our brain, which thought was the weirdest?

It was probably, “We can’t afford that because papa is looking for a new job.” 

Why was that thought in your brain, you might ask?  It’s because even though we are deciding on an action in the present, our minds can be triggered by Financial PTSD

Our money triggers can help us.

We experience money triggers from our traumatic experiences in the past. In many ways, these triggers help us avoid a lot of terrible situations. 

When I was little, my family told me never to walk in a check-cashing business because many of them engage in predatory lending. 

And I’m glad that they did because, according to the National Associates of Consumer Advocates, payday lending could ruin your credit and charge you five times more than cashing your check at a bank. 

This warning was given to be because my family did go to the check-cashing place and learned from their experience. 

Our money triggers can hurt us.

On the other hand, our money triggers can hurt us. They can stop us from getting the things we want. 

It can be as little as not purchasing Honeycrisp Apples — even though you can afford them. It could manifest as accepting less pay than you’re worth, even though you’ve attempted to negotiate your pay. 

Trauma and Money Habits

On a personal level, the most challenging thing as a writer is to convey to readers the urgency around money and trauma. Using trauma as a reflective-interactive tool can help Women of Color process their cultural beliefs around gender and race. 

As I was looking for more scientific research to support this case, I stumbled upon a TED Talk by Dr. Nadine Harris Burke entitled Adverse Childhood Experiences.  

What is Adverse Childhood Experiences (ACES)? 

Adverse Childhood Experiences (ACEs) are the traumatic events that occur during childhood between the ages of 0-17 years. Some examples of these traumatic events are: 

  • Experiencing sexual, physical or emotional abuse — including neglect. 
  • Witnessing alcohol and drug abuse.
  • Divorce or family separation.

ACE scores are formulated on a one to four scale. A score of one means you’ve experienced one form of childhood abuse. Four or more means you had many hardships to overcome. 

It’s also important to know that ACE scores don’t talk about racism. They don’t talk about coping strategies or how someone overcame adversity. 

So if someone has a high ACE score, they can also be dealing with environmental trauma, such as gender and racial inequity.

The Center for Disease Control and Kaiser Permanente investigated childhood abuse and how childhood abuse and neglect can impact adults. It turns out that most adults have experienced trauma in their life. 

According to the Center for Youth Wellness, about two-thirds of study participants had experienced at least one ACE category. The higher your ACE score, the higher the likelihood of developing long-term health problems like heart disease or cancer. 

Could ACE Scores be the missing link to personal finance?

When I stumbled upon this research, I kept asking my personal finance friends if they had heard of ACEs, and many of them scratched their heads in disbelief. This research meant that we could find out adults’ long-term health habits if we learned about their trauma. 

It also meant that I could find the relationship between ACE scores and socioeconomic patterns.

A 2014 study explained that the monetary hardship on women who had an ACE Score of two or more had a history of economic adversity. A UK study found out that women with an ACE score of two or more have a higher risk of premature death than women with lower scores. Many of these women had premature deaths from lack of health planning and budget prioritizing.

So what does this mean? 

It means that our trauma can have an economic impact that can affect our future lives. When we experience trauma as children, it can create barriers around future health and opportunity if not addressed early. 

The pathways associated with ACE scores could increase the likelihood of adopting harmful health behavior, impacting one’s ability to achieve upward mobility (i.e., education, employment, and income.) It also means that our ACE score can create an awareness of how vital social connections are to our overall health. 

Because we know that most Americans have experienced trauma, we must start the conversation around our behavior and emotions. 

My Family’s ACE Story

In my book, Our Money Stories, I go through a journey of understanding my ACE score through my father’s eyes. It occurred to me that my father had a high ACE score. Still, he managed not to endure all the adverse outcomes associated with high ACE scores: Violent behavior, incarceration, and premature death. 

But my dad did have one addiction that I was able to identify: His soda addiction. 

Coping with one’s emotion through addiction is a common practice. According to reporting done by Tulsa World, soda and cigarettes help people soothe and regulate emotions

The larger problem is that many adults with high ACE scores didn’t develop the ability to soothe and control emotions when they are stressed.  So as adults, they create ways to relieve their feelings either through food, soda, or cigarettes. 

On the economic side, the cost of any addiction is expensive AF. When I sat down with my father, it occurred to me that my dad spent money on soda every day. 

How ACE Scores affect your spending 

Prior to 2016, money was the number one cause of stress in America. The American Psychological Association reported that 72% of Americans stressed out about money at least some time during the previous month. 

ACE scores are the aspirin to your money headache. Why is this? 

It’s because the way we handle stress stems from our childhood. The adversity that we experience as a child — like divorce or neglect — can alter how our body reacts to all situations. In a recent discovery, ACEs Too High explained that our ACE scores could create long-term changes in our bodies without us even knowing it. 

Let’s go back to our example earlier in the article:

If I had a man (or woman) who supported me, I could buy apples. 

We can’t afford that because papa is looking for a new job. 

These ideas may stem from ACEs. 

Thought The potential link to ACEs
We can’t afford that because papa is looking for a new job. Because the family dealt with financial insecurity, the child feels neglected.
If I had a man (or woman) who supported me, I could buy apples. You might be a child from a divorce who fixates on ‘what-ifs’.

Our past can unconsciously help us make decisions. Paying attention to our thoughts and behavior patterns with money can help us create reflective money habits. Sometimes we have to dig a little deeper to find what’s going on.

3 Action Steps to Understand Your ACE Score 

Take the ACE Test 

Let’s be real: Taking the plunge of learning your ACE score can be a traumatic experience. 

Sometimes many of us block our traumatic experiences. They can be overwhelming. If you are comfortable taking the ACE test, you can do so here. You can also take it with a therapist or a specialist. 

Write in a Journal

One of the most healing forms of understanding one’s trauma is by writing it on paper. Take out a piece of paper and start writing about your past. Hannah Brame, author of The Year of You wrote a series of money journal prompts, and we’ve found the best ones to get your ACE brain activated:  

How do you talk about money with friends and family? (Do you?)

What does it mean to you to have “not enough” money

What does it mean to you to have “too much” money?

Write a Money Brain Dump 

A quick money stress reliever is creating a money brain dump list. 

A money brain dump list is the act of setting a timer and writing down all of the things that are bothering you. You can make your brain dump money-specific and write out a list of financial stressors. 

Getting your fears on paper can relieve your current money stress. It can also help you make a mental note of why you are stressed, so you can work through it and process your stress in new, healthier ways. 

Eugenié uses her 10+ years’ experience in tech, education, and finances to lead high- achieving individuals to understand their money habits. She works as a financial wellness strategist and is the author of Our Money Stories.

More from the Intersectional Money Series

Black woman sitting in an altered background that looks like a vortex of wind, inhaling deeply.

How Your ACE Score Affects Your Money Habits

Our past can unconsciously influence our decisions. Paying attention to behavior patterns with money can help create reflective money habits.

Black woman wearing a white shirt with black trim smiling. Background is blurry trees.

Why Representation Matters in Finance Media

Sometimes, all it takes to spark the confidence that you can be successful is seeing just one person who looks like you represeneted in the media.

Black woman wearing black sweater typing at a blue keyboard

A Lesson Learned: The Black Tax

When I first heard of the Black tax, it was often described in the context of Black Americans and immigrants who are having to deal with the financial and emotional pressure of supporting family members. I connected with that assumption, but learned that I was wrong.

domestic violence advocate

The Intersection of Islamophobia and Domestic Violence

Nour Naas shares her important story and perspective on domestic violence and how marginalized groups face additional barriers when it comes to reporting.

Flipping a Switch: Book Review

A few years ago, I met Dr. Barbara O’Neill in a Lyft, of all places.

We had both won a conference scholarship for articles we had written. We were headed to the same celebratory event. Our ride — packed full of scholarship winners — was supposed to take less than ten minutes.

It ended up taking over an hour.

And yet, I was only marginally annoyed by the gridlock traffic. The conversation I had with these well-deserving awardees was stimulating to no end.

Yes, I felt inferior in their presence.

Dr. O’Neill in particular was smart. It wasn’t just her academic resume that impressed me, though it surely did.

It was very quickly clear that Dr. O’Neill wasn’t just familiar with the most-recent research; she was effective at communicating economics and personal finance at an extremely high level.

She was one of those people who is simultaneously interesting and interested. By the end of our odyssey, I had gained so much nuanced insight from her expertise.

Beyond her own expertise, she asked attentive questions about each of the other awardee’s work; I remember being impressed that although she had such an incredible depth of knowledge, she was still actively seeking to learn more.

Flipping A Switch: Your Guide to Happiness and Financial Security in Later Life

I’ve been following her work with rapt attention ever since. When I found out Dr. O’Neill was writing a book, I absolutely knew I had to read it.

I was not disappointed. Flipping A Switch is a real-life guidebook to navigating the changes that come along with retirement.

As I read, I could see the same things that initially attracted me to her work that day. I saw the educator and communicator in her via the comprehensive action-step checklists at the end of every chapter.

I saw the academic in her through her thorough research and willingness to point out common misconceptions where they contradict the most recent studies.

Her compassion for others was evidenced in her acknowledgement of privilege and systemic obstacles throughout her book where appropriate.

Who should read Flipping a Switch?

Dr. O’Neill makes no qualms about her target audience: She is writing to a privileged group of people. She acknowledges that appropriately throughout the text without trying to make the text ‘one-size-fits-all’.

Specifically, the book professes to be best for those who already have at least $250,000 saved for retirement. Especially if you’re closer to traditional retirement age, it is even more appropriate if you have saved in excess of $1M.

O’Neill acknowledges that this excludes 77% of the American workers and some of the reasons for most Americans not being able to save that amount of money.

However, I feel like a lot of personal finance bloggers and readers may fit into this demographic, or are actively striving to fit into it soon.

Things I Learned from Flipping a Switch

I love reading books that expand my view. And Flipping a Switch did just that. Here are just a handful of the things I learned in its pages.

The 4% rule isn’t doctrine.

A lot of times when we talk about retirement, we apply the 4% rule. The 4% rule says that if you withdraw 4% of your investments per year over a 30 year period, you shouldn’t run out of money.

But recent research doesn’t support the 4% rule. According to a study that’s been around since 2013, Dr. O’Neill says, the 4% rule only works out 50% of the time.

A 2.8% withdrawal rate is far safer, with a 90% chance of not running out of money before you pass away (assuming that’s within 30 years.)

Rethinking the costs of aging.

There’s this misled though pervasive idea in the world of FIRE (Financial Independence/Retire Early) that if you just take care of your health, you’ll never get sick and therefore not need to worry about healthcare costs.

I know. I roll my eyes hard anytime someone makes that argument, too.

But in the pages of Dr. O’Neill’s book, for the first time I saw someone shut down this argument with hard money facts.

“Healthy older adults incur higher lifetime health care costs than those who are sick,” she explains, citing a study from the Center for Retirement Research at Boston College.

She notes that the longer you’re around, the higher your annual healthcare costs climb. As we get older, our bodies eventually deteriorate; you can’t escape the financial consequences of that fact — even if you cycle everyday and eat nothing but salad.

Of course, a longer life is more desirable, even if the costs of healthcare are higher by inherent fact that you’re paying them over a longer period of years.

But going all out on a healthy lifestyle doesn’t mean you’ll have a less expensive life in terms of healthcare costs. In fact, it could mean the opposite. It’s important to plan accordingly.

Younger people report being victims of fraud more often than older people.

If you’re age 60 or older, you’re 20% less likely to report being a victim of fraud than younger adults according to the FTC.

I was a little surprised by this stat read in the pages of Flipping a Switch. Whether younger adults are more apt to report or are actually more often victims ended up being beside the point.

Because the amount of money fraud victims over the age of 60 reported lost was much, much higher than the money lost by younger victims.

This chapter talked explicitly about different types of scams. Reading Dr. O’Neill’s words, I felt like I got a feel for the motivation and tactics of the scammer rather than just ‘What to watch out for as a potential victim.” And that type of perspective is incredibly helpful for generalizing safety rules into any medium, whether it be snail mail, email or someone you meet in person.

Other Topics Covered

These are just a few of the myriad things I learned in the pages of Flipping a Switch. Dr. O’Neill addresses so many retirement transition issues in this book, including but not limited to:

  • Why the 100-(Your Age) Rule isn’t necessarily the best option for asset allocation.
  • Social Security benefits and Medicare enrollment.
  • Investing in later life.
  • Philanthropy and estate planning.
  • Social transitions in retirement.
  • Finding fulfillment after full-time work.
  • Deciding where to live in retirement.
  • Handling wildcard events.
  • Finding happiness.
  • Estate planning.
  • Time management in retirement.

Recommend?

Yes. If you’re ever planning on retiring, this book is helpful in every last respect. It prepares you financially, on top of guiding you through a bunch of other life transitions.

If you haven’t started saving for retirement yet and want to learn how to make that happen, this isn’t the right read for you — yet.

But if you are planning on saving up a significant amount of money for retirement, this book can guide you through what your money can do for you across all the many transitions in later life. You’ll want to take every page under consideration!