Lori Walsh: South Dakotans are set to start receiving federal stimulus money in the days and weeks ahead. What's the best way to leverage that windfall if your finances aren't in crisis? What if your financial future is uncertain? Rick Kahler is founder of the Kahler Financial Group. He's a pioneer in the field of financial therapy and the author of several books on the topic and he joins us now on the phone. Rick, welcome back, thanks for being here.
Rick Kahler: Thank you, Lori. Good to be with you again.
Lori Walsh: It is such a challenging time for people as they wrestle with unemployment and an uncertain future and how to spend their money and what to save. Everything is thrown in disarray and enter into that the promised stimulus checks, which are set to be in people's bank accounts this week for many folks. What are some of the ways to sit and process this windfall and what to do with it?
Rick Kahler: Yeah, they started showing up Monday according to the reports that I'm getting from various people who are discovering them in their bank accounts. And just as a really quick recap, any single filer that has an adjusted gross income of under $75,000 will get $1,200 plus $500 for every dependent under age 17. That $1,200 will go down for any amounts over $75,000 to $100,000. That means a couple will get $2,400 if their AGI is under $150,000. These are starting to show up, they're meant as stimulus, they're meant to help people through this time. They're meant to help people buy food, pay the rent, and mitigate. Especially those that are unemployed, which we have record levels this disaster.
The interesting thing that I was asked recently on a town hall that we've done several of, was a gentlemen said, "I'm getting one of these checks and I'm retired. I have stable sources of income, I don't need this. How can I send it back?" That really caught my attention because first how you send it back. I mean it's sitting in the bank account, you can't tear the check up. The intention is for stimulus and yet a person is feeling a moral and ethical resistance. I don't need it, I shouldn't take it so that there's more for somebody else. Well, not taking it isn't going to result in anybody else getting that because there's no cap on the program. If you qualify, you're getting $1,200.
Lori Walsh: At this point like you said, it's set up for ease of distribution and Steve Mnuchin said yesterday in the White House press conference, that they were ahead of schedule. I haven't fact checked that, I'm not sure if that's true or what he's referring to there. But basically, it's designed so it comes to your checking account quickly and efficiently because there's so much of this money that's being distributed. You're not applying for this so it's very hard to turn it down, really can't. So then what? If you're one of those people-
Rick Kahler: I have a hunch it'll cost more to send it back than what the check is.
Lori Walsh: Probably. All right, so for those people who are thinking either I don't need this or I could live without this and I don't want the federal government to be sending this money out to me, what are some of the steps they can do?
Rick Kahler: Yeah, there's a real chance here for a win, win, win. I processed this with a colleague of mine with what do you do? We came up with some ideas that I think will be really helpful. For example, one is donate it to a food bank or a homeless shelter. I think a lot of your larger cities have that, I know that we have that. Or a charity providing meals and services to seniors. The list is just unlimited. You could pay the rent for somebody who's lost their job, which will benefit both them and most landlords are very small and will struggle to have to... They have mortgage payments. And so they're going to really struggle to be meeting their needs and the needs of their renters.
There's you could pay the utility bills for somebody, you could buy groceries. We all know our restaurants are struggling, so you could buy gift cards at a restaurant and then maybe give those gift cards to a medical worker or somebody, a caregiver. You could call a delivery service and have them pick up food from a restaurant and deliver it to caregivers. I mean, just a number of things.
One of the benefits of this and one of my beliefs is that we are hardwired to give as human beings. That it's actually a gift to us when we're able to make a difference or we're able to give to someone. So I just think the opportunity, the reward, if I could put it that way, of taking that money and doing something truly helpful for somebody that needs it, is going to have a much bigger reward than sending it back to the government.
Lori Walsh: Which as we said before, you can't really do anyway.
Rick Kahler: It's a black hole and you don't know what the government gets to do with it. And quite frankly, the government is creating this money. They're printing this money so it just really doesn't serve anybody to send it back.
Lori Walsh: Yeah, we've had these economic conversations and Joe Santos was on yesterday. So much of what happens in the longterm depends right now on how many people can keep their jobs in the short term. And clearly that's already a huge crisis. Which is why the payment protection program is launching. The whole concept here is how many businesses can we keep open during this? How many people can we keep employed during this? Because that is really going to make an impact three months from now, six months from now, 18 months from now with what the economy looks like as it rebounds. So it's important to think about this money in a way that has the big picture in mind even if you do need it and it's a huge relief that it's coming to your bank account.
And Rick, let's talk about those people a little bit. People who are uncertain right now about what the future of their job might be or people who have already lost their job. What are some of the things that you can do in an emergency or just a time of instability where you're not sure what the world is going to look like in a couple months? Do you just put it in your savings account and hold on to it? And if so, what else can you do during this time to look deep at your finances?
Rick Kahler: I have a hunch, since 70% of Americans pretty much live hand to mouth and I think it's 75% of Americans would have to borrow or sell something to come up with $1,000. So probably for somebody who has lost their job or who has had their hours cut, there's probably some immediate needs that they'll have with this money. For somebody that maybe has no immediate need today but might next week, I think saving that would be super beneficial because like you said, we don't know. We don't know what the restarting of the economy's going to be. I spent a lot of time this past weekend thinking about that and I really don't like what I came up with because I mean very quickly, here's what grabbed my attention. Seventy-two percent of NFL fans that go to NFL games say that they will not go to an NFL game until there's a vaccine and that really got my attention.
I don't know that we get back to anything close to normal and until there's a vaccine or there's herd immunity and that can easily be six months and we're being told a year. So it is a time of unprecedented instability. I think one good thing that has happened is that our spending has been cut externally and sadly, but the things that we do for lifestyle, eating out, entertainment, those aren't options. So the one thing to do when we have times of uncertainty like this is to really marshal our resources and attempt to cut our spending in all the places where we can. Oftentimes we work with clients who are in that position and as one of my associates pointed out, I don't think we need to work with our clients around how to cut their spending. I think it's been done for them.
Lori Walsh: Right. I have an interesting financial therapy revelation on a personal side, which I'd just love to share with you because we've been doing this work together for some time. I of course have spent much less than I've normally spent, but I have also felt this emotion that I'm conflicted about, which I would describe as relief from the pressure of feeling like I need to support everyone and solve every problem and write every check. I'm still feeling a little guilty because I do have favorite restaurants that I have not supported during this time, but I'm not sure I could have really afforded the way I was supporting them in the first place.
I'm looking at my finances a little more deeply saying, that restaurant bill that you had before, that was a little irresponsible. I apologize to the restaurant owners who don't want to hear that message right now, but for me in my case, I really should have been looking at how much I had been spending on food a long time ago and it's been a reset for me. But there's a lot of emotion behind that pressure to buy the next thing, to do the next thing, that I didn't even know I was susceptible to.
Rick Kahler: That is so insightful. As I was talking about cutting your spending, I had this little voice and this little twinge within me saying, "Yeah, that's not what we need right now as a society." That's why the stimulus is there to keep spending because we're a consumer based economy. When consumers stop spending, we get a recession. You have highlighted beautifully that internal struggle of guilt and of taking care of yourself. I'm seeing a lot of guilt amongst my clients that have enough, that are not struggling, that have reserves and it's a little bit of a survivor's guilt. Why me? Why shouldn't I be struggling like so many other people? That's a beautiful frame up Lori of something that you're not the only person that is struggling that. I think many, many people listening can say, yes, absolutely. I feel this, I'm torn what to do.
Lori Walsh: What to do.? And people are wrestling with their own privilege which maybe they didn't notice and they're wrestling with their own vulnerability, which maybe they knew all along. But now this idea of what safety net was there that was never there in the first place. It's a tough time to be thinking about money, but if you've been doing some of the financial therapy work, it's a really insightful time as well.
Rick Kahler: It is and there's even a new wrinkle I was exposed to yesterday. As you stated a few minutes ago, there are these PPP loans to protect payroll and give small businesses money to assure that they keep their employees on the payroll. And in the USA Today, and I can't cite the exact article, but there is an article that some reporters and other people are saying they are going to go on a... What do they call it? A vendetta once this is all over to track down businesses that got PPP money that in their opinion didn't need it. There's also the same thing the SEC has come out with something like that. Which the spirit and intent of what Congress passed was if you think you're going to be affected by this, please apply and make sure that your employees are protected.
I have had discussions already today with one, two, three, four, five planners who have been approved for this money who read that article, who are sending it back, and you can send this money back. Who are sending it back, who all, if the market stays where it's at, they are going to lose their profitability. I mean, the market only needs to be down 10%, 20% and a financial planning firm has lost their profitability. But the fear of the retribution of class, retribution of them being perceived as being wealthy and not needing the money, from a Monday morning quarterback position like, "Well, you should've known that things would recover or things would get better," which we don't know. Many people think we're on the precipice of a depression.
I had an article that came out yesterday that talked about what happens in pandemics and one of them is that it divides us by class and it further exacerbates the chasm between the "rich" and "poor." And we are seeing that play out in this in spades.
Lori Walsh: We see this in history as well, as other people have been through plagues and pandemics, this division. Whereas we look back at certainly post 9/11 America or World War II America had conflicts for sure, but there was also this rallying around the flag effect or this unifying effect. Not so with pandemics historically.
Rick Kahler: No. And that was a fascinating thing that I discovered in the best article I found was written by David Brooks in the New York Times a few weeks ago. The fact that disasters bring us together, wars bring us together, but pandemics separate us. He made the comment, you may not like who you're about to become. You talk about emotion, it's not as Jason Beckfield said, whose from Harvard. He said, it's not the virus doing the dividing. The dividing is a function of how we respond to it and of course all of that is emotional.
Lori Walsh: It's such a great article that you wrote and that David Brooks article. Thanks for pointing it out because I was reading that as well and thinking really, really deeply. I want to let listeners know that certainly financial therapy is available to you, but you can also go back and listen for free all the conversations that Rick Kahler and I have had that give you a really good place to start in thinking about this emotion.
Let's talk a little bit about financial stress and financial therapy and how some of those fundamentals can be particularly of assistance now and really in the days ahead Rick, because as we just mentioned, this is not a short term. This is not a three month problem when it comes to the economy, is it?
Rick Kahler: No, unfortunately it's not. We're just not going to get back to normal anytime soon. Financial therapy is the uniting of emotion and money. It's the uniting of your finances with respect to the feelings and the thoughts that we have around money. We know that research shows 90% of all financial decisions are made emotionally in the limbic system. That isn't somebody's hunch, that's research that a gentleman won a Nobel Prize for. I think there's several steps that a person can do in this time period that can give them some relief. And if you'd like, we could go into those.
Lori Walsh: Let's start with that. I think people need to hear that right now. I know I do.
Rick Kahler: The first thing is what you've already embodied. Is don't avoid or resist feelings. There's typically messages attached to our feelings or thoughts. If you ask somebody, "What are you feeling right now?" They will typically come off with a thought. I'm feeling that bah, bah, bah dah, dah, dah, dah, dah, dah. Well, that's not a feeling. A feeling is one word. Happy, joy, scared, terrified, frustration, anger. You could start with what are the messages going through your mind, what are those thoughts? Writing them down is a great thing to do. And then ask yourself, what's the feeling behind that? And if it's hard to find a feeling, underneath feelings are sensation. There's where being quiet, whether it's mindfulness or some meditation of just trying to let go of that thought and find a sensation. Oh, my stomach's tight or I feel constriction in my chest. Then ask yourself, what's the feeling there? Finding that feeling and then naming it, which therapists call affect labeling, naming it, usually a person will find pretty immediate relief and a clarity. The ability to think actually comes back on the line.
Because physiologically when we're triggered, when we're in our limbic system, in our emotions, there's a chemical reaction that literally disconnects our cerebral cortex from our limbic system. I mean we literally lose our mind. So when we get that relief, when we can name, I am just feeling so scared, it's like naming the elephant in the room. There's a real powerful chemical reaction that happens from that. That can help us bring us back into the present. It can help bring the thinking part of our brain back online. Then we're in a better position to start making financial decisions that are in our best interest.
I want to be clear Lori, as I say this, that I do not speak as somebody who has mastered this at all. I have the same brain everybody else does. You can call my wife and she will tell you, I wish he'd be listening to what he's saying. This is hard to do. It's hard [crosstalk 00:23:57].
Lori Walsh: I get that too where a couple days later or sometimes even that evening, someone who loves me will gently remind me that we had a conversation on the show today that said, "Were you're not paying attention when you asked that question to what the answer would be?" Oh well, I'll go back and listen. Let me look at that transcript.
Here's something I want to talk to you about because for people who have been doing that kind of emotional work for a while, it might be easy to say I'm scared or I'm angry. But I know when I felt the feeling of relief, I was fairly mortified that that's what the emotion was. Then that was immediately followed by guilt or a shame either of the person that I was four weeks ago or the thought I was having right now. Talk a little bit about accepting the emotion that you're having, even though it might be a surprise to you.
Rick Kahler: That's a beautiful question Lori, because that will happen. We have these parts of ourselves and one part that most of us have is the critic. The critic comes in and says, "Wow! Shame on you for having guilt. You should be above having guilt," or "Shame on you for being afraid," and away it goes. We develop that part of ourselves typically as kids. Sometimes it's called the parental voice. That part of ourselves was there to take care of us in a certain place, in a certain time it was important that we didn't show emotion because maybe we would be criticized or spanked or it wasn't okay to show emotions when we were growing up in certain families.
It's been a huge relief to me to understand I don't want to get rid of my critical part. To begin understanding that that critical part was a coping mechanism that had its place in time. It's not serving me well today, but to be able to approach it from a place of compassion rather than a place of judgment and trying to get rid of it. That has brought me a tremendous amount of relief in being able to bring a little compassion to myself because those messages are there. I personally get them a lot like, "Good God, Rick. You were just on the radio saying this and now look at you, what's wrong? You're a fraud."
Lori Walsh: I think the point there is it's not a onetime solution. It's an ongoing process of self-discovery here.
Rick Kahler: Yeah. Unfortunately, there's no vaccine for this.
Lori Walsh: Can we develop that please? Put some of that stimulus money into a shame vaccine or...
Rick Kahler: Yeah, emotional vaccine.
Lori Walsh: How do you bring yourself once you've stepped into that place? I think some people are afraid of not getting out of it. If I stand in my anger or my fear, how long do I have to stand there? Talk a little bit about what's on the other side of those steps to deal with financial stress where we think about what those emotions and feelings are and we name them. All right now what? Because the problem's still there. It doesn't make the problem go away.
Rick Kahler: That's a big one because I am great at naming the emotion that's there, but I haven't been so great at feeling the emotion that's there. And I do remember there was one time like, "I don't even want to go into that because I don't think I'll come out." It just feels so big and so deep and just like Scrooge felt when he was working with the ghosts and looking at his past it said he trembled and he cried. Having the courage to feel that feeling is pretty important and it is a huge step of faith to go into it and to embrace it. Because if we are resisting and avoiding it, we are depleting our emotional resources. We're actually making things worse in trying to resist it. And this is normal, it's totally normal in our society to resist emotions and resist feeling.
And when we turn toward embracing it, it can be intense. But an interesting thing is most difficult emotions that come our way last for 45 to 90 seconds according to the research that I've read. And on the other side of that is clarity and lightness. That's the prize to keep in mind when a person says, "I'm just going to feel it." I can't tell you how many times in the last two weeks that I've just felt sadness and I've just had tears come up and giving myself permission to go with that because this is such an incredibly stressful time. There's so many reasons to be sad and cry and rather than stuffing that down and saying, "Come on, chin up," those messages, to just go with that and give yourself permission. It is tough.
Lori Walsh: Talk a little bit about whether we can give ourselves permission to be joyful or happy right now because I've had my own struggles with that. It's fairly easy for me to say, "I just need to cry for a few minutes," because that's just part of who I am and I've embraced that and that wave will pass over me pretty quickly. The moments where I've just felt relief and happiness and sense of peace, that guilt follows as well because that's a position of privilege. Who can feel peaceful right now if the paycheck from your job isn't still coming like it used to be, and mine is so the guilt races in. Do we give ourselves permission to experience the happy feelings in the middle of a crisis?
Rick Kahler: Yeah. I think I should be interviewing you Lori, because you nailed it. That's part of the survivor guilt. I have no right to be happy. I was on a call with a peer this morning that I referenced earlier and I had sent out some very troubling information on this PPP law and he was so happy. I am so glad you sent that stuff, we have turned back our loan. I'm like, "What do you have to be happy about?" Just being in a good place and he was being thankful for what is happening and how it's given them a chance to look at things differently. And I was just feeling so much jealousy in that moment going, "I'd like to be in this place right now with you."
I think it's a big thing, being happy where you are, being secure, being happy of the decisions you've made financially, happy that you're working for a business that actually has seen increased sales during this time. There's a huge amount of guilt that that can come rushing in, in that scenario.
Lori Walsh: I'm very happy and grateful to have meaningful work and I think that's okay. That feeling passes in 90 seconds too sometimes when the next stressor pops up.
Rick Kahler: Ninety second rule is not a respecter of emotion.
Lori Walsh: Before we let you go, Rick and you and I could talk for two hours for sure, for people who are entering this phase and unexpectedly are seeing problems that they maybe already knew that they had becoming worse, what are some of the things to look at bad behavior and examine it a little more closely? We'll just be able to get started on this and maybe continue it next time. But I want to get into this money disorder thing where is there a way to hit pause when you had a problem before and then all of a sudden the crisis comes?
Rick Kahler: Well, there is. It becomes harder. Let's just take the money disorder of hoarding and that's of all the disorders, I think that's the one I rate highest on. Workaholism is another one for me. But it does become more difficult in times like this. I think one thing to do is just first being aware, just being aware and able to say, "I think I have a problem with hoarding. I think there's a disorder here," is huge. That's huge because most of us live in resistance and denial. No, this is normal. Who wouldn't go out and buy a case of toilet paper right now? I mean, and justifying. I think it's acceptance, naming it that yes, I've got it and I see it getting worse. That's huge. That can pave the way to start to understand the emotions that are behind that; anxiety, fear, whatever it is. And if a person can get to that place where they can start naming the emotions they're feeling, the opportunity to change behavior isn't too far away.
Lori Walsh: We will leave it there and look forward to our next conversation. Rick Kahler, thank you so much. We appreciate your time.
Rick Kahler: Thank you, Lori. It's always such a delight talking to you.