Our financial mindset: it's a bit of a mess

Figuring out how we feel about money during a pandemic with more plot twists than Succession is a challenge.

In November of 2020, according to CNBC, 77% of people siad they felt anxious about their financial situation and 58% said finances "control their lives." That led to better savings habits, with personal saving rates doubling from 2019 to 2020. 

But then, according to McKinsey research, "Consumers' pent-up demand and willingness to spend...caused spending to grow at 20 to 30 percent" from 2020 to 2021.

 

Are we just simple creatures with short memories?

Do we spend when we feel safe and save when we feel threatened? Perhaps. But spending reports are more nuanced than that. Home office and exercise equipment spending skyrocketed, hardly frivolous purchaes, while travel and entertainment suffered.

But the pandemic has also reinforced two polor opposite lessons. First, we have to save, save, save because disaster can—and will—strike. Second, we have to live in the moment and enjoy life...because disaster can—and will—strike.

The reality is that our feelings about finances have always been complex and sometimes contradictory.

Before the pandemic hit full force, our own research for Gesa Credit Union found the majority of people said they feel confident in their financial know-how.

In the same study, the majority said they could really use help understanding their finances. 

These two sentiments aren't as contradictory as they seem. People project confidence about their financial knowledge because that's what has been modeled. If you're an adult, you handle your money. And the basics have been drilled into us: save for retirement, don't spend more than you make, buying is better than renting, use credit for emergencies only.

But not all we've been taught holds true. So when we wade into true financial planning, it can get complex and confusing quickly.

 

Changing deeply-ingrained habits

You can't learn about money if you don't talk about money. And historically, we don't talk about it. As MarketWatch notes, "...money tends to be a topic that is private and discussing it is often considered taboo, (so) exploring money mindsets and unique money scripts can be uncomfortable." 

Psychologist Brand Klontz expands on the idea of "money scripts" which he says "are typically unconscious beliefs each of us have developed concerning money and life. Most commonly, money scripts are formed in childhood, shaped from both direct and indirect messages we receive about money from our partents, other significant people in our lives, our circumstances and society as a whole." It makes it hard to pivot when our situation changes. And there's been a whole lot of change for all of us.

So how can a financial institution like Gesa help people who need help but have been conditioned not to ask? It's simple, but not easy:

1. Break down the stigma that we can't talk honestly about money challenges. Make it the norm to ask for financial guidance before there's a problem.
2. Listen, educate and help each individual person with their life goals. The American blueprint for success has been torn up and burned. 

College, car, marriage, house, kids, retire at 65 is far from a shared goal anymore. And it's yet another reason financial research is muddled—success is now in the eye of the beholder. 

The good news for Gesa Credit Union is they've been dedicated to financial education since they were founded. In fact, they have student-run branches in high schools throughout Washington to help young people develop a strong financial foundation. 

They do it for adults too, in every branch every single day. And Copacino Fujikado had the opportunity to develop their new brand campaign to help break down the stigma and get people talking about money. Including actual scripts to rewrite the money scripts that have been ingrained in us. 

Check out the work here.