Thursday, March 3, 2011

Bibliotherapy and Beyond 12/2008: Coping With Financial Problems

I don’t know about you, dear reader, but my personal and professional life has been deeply affected by the recent economic downturn and I imagine in some way, yours has too.  So rather than discuss the holidays like everyone else at this time of year, I thought I would write about books that will enhance our personal and psychological understanding of money, finance and the economy.

I’ve always had an interest in economics, probably because I love math and statistics.  My work-study job in college was in the university’s general accounting office, which piqued my interest and taught me a thing or two about accounting and finance.  As psychologists, we don’t need to be financial wizards (although it helps if you have a practice or a research grant or run a department).  However, we do need to understand the emotional issues that revolve around money in our client’s lives and how macroeconomic issues impact people at the individual level.  And of course, a basic understanding of budgeting, investing, credit, loans and financial decision-making can enhance our effectiveness (not to mention our bottom lines) across the board.

I’ve always taken issue with the ‘personal self-discipline and will power conquers all’ approach to money management.  It seems overly simplistic and unrealistic given what we know about human nature.  So, I was delighted to find a book called “ Going Broke: Why Americans Can’t Hold On To Their Money” (2008) by Stuart Vyse Ph.D.  Dr. Vyse is an academic psychologist who expertly integrates the cognitive, social-psychological and behavioral neuroscience literature to explain in a highly readable manner why so many of us are going broke.  It’s a fascinating and engaging book that makes some excellent practical suggestions for overcoming the natural psychological obstacles to responsible money management.

Of course, graduate school didn’t teach us anything about budgeting, credit or finance.  For that matter, neither did college or high school.  Most of our parents didn’t discuss these topics beyond giving us an allowance, a piggy bank and perhaps, if we were really lucky, a savings account.  If you want a good understanding of basic money management, you can’t beat Dave Ramsey.  He’s written several great books but his most popular book “The Total Money Makeover: A Proven Plan for Financial Fitness” (2007), is a gem.  He also has a cable TV show if you want to learn more beyond the book or you want to recommend his system to clients or friends who don’t like to read.  Suze Orman writes for O magazine, appears on Oprah’s show and also has her own cable TV show.  Her 2006 book, “The 9 Steps to Financial Freedom” is wonderful.  Her most recent book “Women and Money: Owning the Power to Control Your Destiny” (2007) addresses the unique concerns many woman have about effective money management.  Another book of particular interest to women is “Money: A Memoir: Women, Emotions, and Cash” (2006) by Liz Perle.  It’s the only book I’ve found that offers an unflinching account of a personal journey through the emotional minefield of unexamined financial issues.

If you are interested in taking on the task of making sense (cents) out of the breakdown of the economy, I have some suggestions.  “Conspiracy of Fools: A True Story” (2005) by Kurt Eichenwald is a chilling documentary about the Enron disaster.  If you want to understand how narcisstic personality disorder can bring down an entire corporation (not to mention the national energy market), read it and weep.  “The Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash” (2008) by Charles Morris explains contemporary macroeconomics.  It’s a complex topic but the book is packed with lucid information about the evolution of our economy with particular emphasis on the current credit crisis.  A somewhat more accessible book on this topic is “Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism by Kevin Phillips (2008).  His earlier book “American Theocracy” is also illuminating and provocative.

If your clients (or you for that matter) are having credit problems, you will find “Solve Your Money Troubles: Get Debt Collectors Off Your Back and Regain Financial Freedom” (2008) by Robin Leonard a helpful read.  It’s in its eleventh edition so it must be pretty good.  This book is published by Nolo Press, which specializes in do-it-yourself legal assistance.  If you or someone you care about finds yourself considering bankruptcy, “The New Bankruptcy: Will It Work For You?” (2007) by Stephen Elias is a practical guide to a scary topic most of us would prefer never to think about.

Most of these books are also available as audiobooks on CD or MP3 downloads.  I particularly enjoy listening to nonfiction on the CD player in my car or on my iPod while I do housework or gardening.   I also listen to books on my iPod while I bike or walk.  I get to exercise my body AND my mind at the same time.  What a deal!  Whatever your favorite approach to nonfiction might be, I hope you find some of these books helpful and interesting.  Until next time, happy reading!  

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