Stephanie McCullough: (00:06)

Welcome to Take Back Retirement, the show for women 50 and better facing a financial future on their own. I’m Stephanie McCullough and along with my fellow financial planner, Kevin Gaines, we’re going to tackle the myths and mysteries of “retirement” so you can make wise decisions toward a sustainable financial future. Through conversations and interviews you’ll get the information and motivation you need to move forward with confidence, and we’ll be sure to have some fun along the way. We’re so glad you’re here. Let’s dive in.

Stephanie McCullough: (00:40)

Coming to you semi live from the beautiful Westlakes Office Park in suburban Philadelphia, this is Stephanie McCullough and Kevin Gaines of Sofia Financial and American Financial Management Group. Say hello, Kevin.

Kevin Gaines: (00:51)

Hello Kevin.

Stephanie McCullough: (00:51)

So today we have a guest, Maggie Klokkenga. I’ve known Maggie for a few years now and we bonded immediately because Maggie is a financial planner. She’s actually an accountant, turned financial planner and now turned financial coach. She just started her own firm in Illinois, but works with clients all over the country really digging deep into the psychology of money, which we’ve touched on in a few episodes, but Maggie’s got a lot of cool stuff to share. So, I can’t wait to share this with you.

Kevin Gaines: (01:21)

Well, let’s get started and bring her in.

Stephanie McCullough: (01:25)

Here we go. Maggie Klokkenga, welcome to Take Back Retirement.

Maggie Klokkenga: (01:31)

Thank you so much, Stephanie. It’s great to be here.

Stephanie McCullough: (01:34)

So why don’t we start with what you do for a living?

Maggie Klokkenga: (01:36)

Yes. So, I reduce overwhelm and shame with money by helping my clients get out of the red and into the black. So, I teach them why they’ve made past spending choices, which empowers them to change their current spending patterns and achieve those financial goals that they’ve only dreamed of.

Stephanie McCullough: (01:59)

There’s a lot of power in that statement. I want to spend the next 40 minutes parsing it out, but I’m sure we’ll get to pieces of it. So, talk about the overwhelm and the shame, what I find so fascinating about you is that yes, you are a certified financial planner and a certified public accountant, and you’re really into all this money mindset stuff. And kind of that, what I think of as the touchy-feely side.

Maggie Klokkenga: (02:19)

Yes. So, the overwhelming shame. Money is such a taboo topic still to this day, right? We know that we can talk about sex. We know we can talk about politics. People still don’t want to talk about money. And I think what is not helping is that you’re looking out on the internet. You’re seeing people who are saying, these personal finance experts who are saying, “I got myself out of debt,” right? Or they’re saying, “oh, you can make a million dollars with my side hustle” or whatever, but they’re still not talking about how they feel, right? They’re not talking about how they feel dumb or clueless, or they’re just overwhelmed.

Maggie Klokkenga: (03:01)

Or even they just don’t know where their money is going. Nobody wants to talk about that, right? But so many of us are guilty of it because we just spend. So, there’s just this overwhelm and the shame that comes with money, and I really like to help my clients just address it. Let’s help you take control of it so you don’t have it anymore.

Stephanie McCullough: (03:22)

I love that because I see it in action. So often I think one of the big inhibitors that people have from working with a financial professional is that they’re going to have to get financially naked and show that, “oh, I’ve only saved this much, or I’m not sure how much is in my 401k. Or I don’t really know how much I spent going out to eat last month,” right? There is a lot of shame around it.

Maggie Klokkenga: (03:43)

Yes, I totally agree. And I liken this to kind of your weight, right? It’s like stepping on the scale. Sometimes when it’s time to really look at your finances, okay, it’s time to step on the scale and come to reality. But a lot of people don’t want to do that because they’d rather just stick their head in the sand and just say, “but I’m getting by. I’m earning a living and I’m able to provide for my family and tomorrow will come tomorrow,” right? When I’ve done research just on the psychology of money, it’s really been interesting because one of the things I’ve found is that we’re naturally spenders versus savers. So, Kevin did a history lesson on Roth IRAs.

Maggie Klokkenga: (04:24)

So, my history lesson is basically on early civilization. Okay, so I go back just a few more years. So, in early civilization, humans would forage. They would scavenge, they would hunt and gather their food and they would eat it that same day, right? They did that to survive. But for us, we don’t need to hunt and we don’t need to forage. We have-

Stephanie McCullough: (04:53)

Thank goodness.

Maggie Klokkenga: (04:55)

Right, we have deep freezers. We have savings accounts, right? There are things that we have in today’s society that they didn’t have back then. And so, we don’t need to spend right away, right now. And then the second one is that we share our resources. And so that was a natural inclination. Again, early civilization you’d have, typically the men were out hunting the food, the women were out near their shelter, foraging for food. They all come back together and then they would share their resources quickly, right? And again, they were trying to survive, but that survival mechanism doesn’t serve us now.

Maggie Klokkenga: (05:33)

We’re not told to share. We’re told to save in our own accounts like you guys know, right? We’re told to save and not just for a day or a year, but for decades. So, it’s like saving goes against that natural impulse of YOLO, you only live once. And so, that to me was really interesting. And I felt like that was something I wanted to be able to share with people. So, to get over that shame, you’re not hardwired to save. This is not something that is in your DNA.

Kevin Gaines: (06:06)

So, when you’re talking with people, do you find a lot of people keep money as a way of keeping score and the shame is their score’s too low?

Maggie Klokkenga: (06:16)

Kevin, that’s a good question. I think that that kind of goes down the way of money scripts and what their history is. So, money scripts is actually the term that Dr. Brad Klontz, he is a financial psychologist and certified financial planner. And he and his father, Ted Klontz, in their research came up with this term money scripts. And it goes back, Kevin, to the history behind what you learned in your childhood. So, you had your loved ones who were really doing the best that they can. And they were telling you things and just repeating those things again and again, whatever was helping to serve them in their financial life. They were telling you because that’s what was helping them, but it might not help you now in your adult life.

Maggie Klokkenga: (07:08)

So, keeping score, going back to your point of, okay, well, keeping score and having money that might mean that there might be a money script where you might literally have the money script of “money’s a way of me keeping score with others.” Or “having more money is better than having a happy home life.” Just things that we may think in our subconscious that we don’t even know until we start talking about it, right? There’s this very common one, “money doesn’t grow on trees,” right? I know I used it with my kids. I know my parents used it with me. This was one of those that you don’t really think about it until you’re talking about, “oh, well, I obviously know money doesn’t grow on trees,” but it’s just something that we keep hearing again and again and again. And so, we put that into our own subconscious in our adult life.

Stephanie McCullough: (08:00)

And how would something like that script affect us in our day-to-day behavior?

Maggie Klokkenga: (08:06)

So that would mean that essentially what you’re doing is it’s going to change your spending patterns. It’s going to affect the way that you spend. It’s going to affect the way that you save. So, for example, so “money doesn’t grow on trees” could mean, okay, you might be looking for a game for your kids that you want to go buy, but the price is $100.

Maggie Klokkenga: (08:26)

And immediately you might think in the back of your head, “well, money doesn’t grow on trees. I might go spend $15 on the game because that’s what I think would be a more realistic value to it. I’m placing my own value on it, but $100…” And that script just goes on in the back of your head and it’s like you just don’t even realize it’s happening.

Stephanie McCullough: (08:48)

So, it’s kind of that unconscious driver of our behaviors.

Maggie Klokkenga: (08:55)

That’s right.

Kevin Gaines: (08:56)

Something we’ve all come across with clients is anchoring on how things used to be 20, 30, 40 years ago without realizing that it was 20, 30, 40 years ago. We just recently had another episode we were talking about retirement age that people are thinking it’s earlier in the 60s. When it comes to spending and saving, do you find that the outdated numbers come up to be problems as well? That “oh, this should have only cost, should only be spending $20,000 a year” on something because that’s how they remember it cost. And then they feel guilty that they spent 40,000. But guess what? That’s what it costs today.

Maggie Klokkenga: (09:40)

Yes, with my older clients. Yes, I do. A very similar analogy would be when you see your friends’ children as they’re very young, right? And you still think of those children as little people. And then you see them 15 years later and you think, “how did they become teenagers? How was that possible?” Because they’re stuck in your memory as these little people. And so similarly, when you’re thinking, “okay, the price of a car should be $25,000. So, the new car should be $25,000 because that’s the price of the car that I bought in my early 20s.” And then times have changed. And there’s this thing called inflation. And yeah, absolutely, Kevin, that is something where we are anchored to that.

Maggie Klokkenga: (10:34)

And we do go back to that and it doesn’t serve us. It’s very jarring at times, because then we have to come to this reality of, “okay, well now I need to make a choice. Do I want to spend money that I don’t know if I’m ready to spend, because my value is something much lower? Or do I say, okay, I can come to that new thought and say, okay, this is something I want, something I value. And the value is higher than what I expected, but I’m okay with that. And I can afford it.” That’s another one, right?

Stephanie McCullough: (11:11)

Right, another key piece of the puzzle.

Maggie Klokkenga: (11:14)

Right, exactly. Small piece.

Stephanie McCullough: (11:19)

Are there any money scripts that actually are helpful?

Maggie Klokkenga: (11:24)

I will tell you that there are a couple that I’ve heard other people say, and it’s mostly to say “money is to help serve people,” or “money gives me freedom.” “Money allows me to be charitable to others.” And so, it’s just having that perspective. I think the problem is again, because going back to that money being a taboo topic, there’s this negative connotation with money or with a lot of people having a lot of money. The expectations of what one should do with a lot of money. But if you have this perspective to say “having a lot of money gives me more time with my family,” that’s a beautiful thing. So, I think if we could have more of those scripts out in the world, that would be fantastic.

Stephanie McCullough: (12:07)

So, when you’re working with clients, are you trying to uncover what their particular scripts are and then expose them to the light of day and see if they still make sense?

Maggie Klokkenga: (12:19)

Well, even better. So right before my first session with a client, I actually send them Dr. Klontz’ assessment on money. They can view the results before we meet, but then at our first session, we go over them. And there’s four main categories to the money scripts. And so, we go over those, but they’re given this assessment to say, okay, here’s the explanation of them. And here’s where you fall. And it just, again, gives them that awareness because once they have that, especially with partners, oh my gosh, it just opens up the line of communication.

Stephanie McCullough: (12:58)

Instead of pointing the finger and saying, “I can’t believe he does what he does,” then you have a little like, “oh, it’s because of this script he’s got going on in his subconscious.”

Maggie Klokkenga: (13:07)

Exactly, absolutely. There was one where I had coached a couple and when they had done their money assessment, their money script assessment, the husband had always gone and bought a lot of cereal at the grocery store. And the wife really just didn’t understand it, had talked to him about it and just never got to an understanding. It was just always this point of contention. And come to find out that back in his childhood, he had these money scripts where he came from lower income and what was happening was that lots of times, they would just eat cereal for dinner.

Maggie Klokkenga: (13:45)

And so, he made sure that when he was out grocery shopping, he would always have enough because his thought was there’s never enough. And it might not be that never enough money, but for him, it was never enough money to put food on the table.

Stephanie McCullough: (14:00)

And the backup plan was the cereal.

Maggie Klokkenga: (14:02)

It was the cereal. And for her, that compassion she had just completely opened up because now she understood. It’s not this obsession with box cereal for cereal’s sake, right? It’s because of this money script.

Stephanie McCullough: (14:20)

That’s very fascinating. And like you said, really helpful.

Maggie Klokkenga: (14:24)

Absolutely.

Kevin Gaines: (14:27)

And for the record, I am not a client of Maggie’s, but may even take a picture of it to post with the show notes. In my house, I actually currently have conservatively 15 boxes of cereal.

Stephanie McCullough: (14:45)

We’re going to make Kevin take the assessment after we stop recording.

Maggie Klokkenga: (14:50)

That’s a great idea. We have 15 boxes as well, but I also have three young boys and a husband who loves cereal.

Kevin Gaines: (14:58)

It’s me and my dogs.

Stephanie McCullough: (15:05)

The dogs eat cereal?

Kevin Gaines: (15:06)

The dogs will eat cereal. My wife really doesn’t care for cereal very much. So, yeah, it’s the three of us and yes, relating to the dogs, most of these boxes are peanut butter Cap’n Crunch, because not that I overindulged my dogs, but their favorite cereal is peanut butter Cap’n Crunch.

Stephanie McCullough: (15:25)

To see a picture of Kevin’s dogs, see the show notes for the episode on retiring before 65. So, Maggie, when we were talking before you mentioned this, we’ve all heard about the fight or flight response. Kind of a default response in our brain, but how the heck is that tied to money? I think that’s really interesting.

Maggie Klokkenga: (15:43)

So, before I do a history lesson, I’m going to do a little science lesson, okay?

Stephanie McCullough: (15:49)

Okay, cool.

Maggie Klokkenga: (15:50)

So, your brain is referred to sometimes as the triune brain, okay?

Stephanie McCullough: (15:58)

The what?

Maggie Klokkenga: (16:01)

The triune brain, T-R-I-U-N-E brain, three parts. So, you have the scientists part of your brain, and then you have the animal brain, which is made up of the crocodile or reptilian and the monkey brain. So, we’re going to do some brain definitions here in a second. So, what happens with the scientist part of your brain, this is made up of the neocortex. It’s the largest part of your brain. It’s the most recently developed. It’s the rationalizing part of your brain, okay? Unfortunately, this is not the part of the brain that you hear from when you’re under stress. That would be your crocodile or your monkey brain. So, the crocodile or reptilian brain is made up of your brainstem and cerebellum.

Maggie Klokkenga: (16:45)

It controls your reflexes, your balance, breathing and heartbeat. And so, this is the most primitive part of your brain. It collects sensory information and it’s protecting you from potential threats. I’ll use an example. So, I’m a walker. I try to walk a marathon a week. And let’s say, I’m walking early in the morning and I hear a noise coming from behind me. I might whip my head around, taking in that sensory information and then pausing and going, “okay, it’s just a jogger,” right? Or I might freeze my body thinking “maybe it will just pass me if it doesn’t see me.” And so, during that moment, my heart may quicken, my breathing might become shallow. And so, the crocodile brain is focusing on survival, it’s focusing on what is happening right now, not in the future. So now the monkey or limbic brain that is made up of the hypothalamus, the hippocampus and the amygdala. And this is the emotional center of your brain.

Maggie Klokkenga: (17:52)

So, the hippocampus helps you remember long-term memories, the hypothalamus releases your different hormones and the amygdala creates and stores the memories that are critical to those emotional experiences. So, remember I said the crocodile brain collects sensory information, right? And focuses on the potential threats, is trying to keep you safe. But it collects the information, doesn’t process. It’s not processing that information. And so, when you have an instinctive reaction to something, that’s your crocodile brain trying to keep you safe. So, it’s not until after the moment passes that the scientist part of your brain is kind of let back in. So, the way that this is tied to money – obviously we know money does not come out jogging behind you, right? Jump out from behind a door and scare you. But how do you feel when you see that you have $2 left in your bank account?

Stephanie McCullough: (18:57)

Oh yeah, panic.

Maggie Klokkenga: (18:59)

Right? Or how do you feel when you read the news that the stock market just plummeted, right? And so, what happens is we take steps based on emotions rather than logic, right? So, like with the stock market, people will sell. And that’s why as financial advisors, you’re there to calm your clients, to center them and say, it’s going to be okay. Don’t “jump off the ledge”, so to speak because they’re panicking because they see this and it’s the wrong part of their brain that’s taking over. It’s the emotions versus the logic.

Stephanie McCullough: (19:38)

And not because they’re weak people or have a character flaw. It’s the science, it’s neuro reality.

Kevin Gaines: (19:44)

Instinct.

Maggie Klokkenga: (19:45)

That’s right. So, one funny story is that my husband long time ago, he doesn’t do this anymore because I asked him early on in our marriage, please don’t do that. He would jump from behind the door to scare me. And my instinctive reaction was to fall to the floor and cover my head. It’s not the most attractive reaction.

Stephanie McCullough: (20:08)

I thought you were going to say, punch him in the face.

Maggie Klokkenga: (20:12)

He probably would have stopped doing it a lot sooner if I had done that. That would have been a good instinctive reaction. But yeah, it was so interesting when I was doing this research and thinking, okay, this is what happens. You have that visceral, that reaction. And then you think later on, “oh, that wasn’t the smartest thing to do.”

Stephanie McCullough: (20:31)

It’s involuntary really, right?

Maggie Klokkenga: (20:35)

It absolutely is.

Stephanie McCullough: (20:36)

There’s no thinking that happens along with it.

Maggie Klokkenga: (20:40)

Right. So, when I’m working with my clients, the first thing we’ll talk about is… And sometimes I’ll do this even during our sessions, we will just do some deep belly breathing exercises. And what it does is it calms your parasympathetic nervous system. It just helps center your mind and gives that space and a little bit of time for your scientist brain to come in and take over.

Stephanie McCullough: (21:04)

Like kind of get back up on line, right?

Maggie Klokkenga: (21:08)

Yeah, that’s right. So let the fog lift, and then all of a sudden you see everything again.

Stephanie McCullough: (21:14)

So fascinating.

Kevin Gaines: (21:14)

Now, let me ask this question. In trying to use your scientist’s brain more when it comes to money and finances, how important is going through the planning process for people? To actually sit and go through the various what ifs, even if there’s not necessarily a great answer, but just to have these situations confronted. And to add onto that, how helpful is it to not continuously do it, but periodically do it just as a refresher, as opposed to just one and done?

Maggie Klokkenga: (21:49)

Yeah, those are good questions. So, it’s good to open ourselves to possibilities, right? To obstacles that may pop up so that we know what to do when the moment arises. We may not do them right away. But we know we have an idea of what to do. And so, what’s interesting, so Kevin, to your point, our brains are programmed to be efficient, right? We will do the same repetition again and again, because our brains want to get from point A to point B in the quickest way possible. And so, if you want to have a different thought or if you want to go over a financial plan or say, one thing that I know we all know is difficult with clients is estate planning and getting our clients to really come to the idea that this is a good thing for you and your loved ones is-

Stephanie McCullough: (22:46)

To think about your death.

Maggie Klokkenga: (22:48)

Right, unfortunately.

Stephanie McCullough: (22:50)

Or disability.

Maggie Klokkenga: (22:50)

Right. You want to plan for that and for your loved ones is that you want to go ahead and create some new thoughts to that, but then you want to keep repeating that. So, here’s another little science lesson. So, your brain has neurons. These neurons are connected by dendrites. And what happens is the number of dendrites increases with the frequency that a behavior is performed. So, you’re creating a neural pathway that’s at point A to point B and this neural pathway, it gets stronger and stronger with every repetition. So, the simplest example is the phrase, “just like riding the bike.” You did it again and again, you might’ve fallen off but you learned how to ride a bike. And so maybe 15 years later, you haven’t had a bike in forever and you went and got on it. And it was easy, right?

Stephanie McCullough: (23:45)

To give another example, I am currently taking ukulele lessons. I am a new ukulele player and my teacher was teaching this song last week that includes a B chord, which I hadn’t done before. And it’s complicated because you have to barre two strings with one finger, and then you have to curve your fingers on the other two fingers on the other strings. And it’s hard, but I’ve been practicing over the week. And the more I do it now, I can pretty well, not perfectly well, but I can get to a B chord much quicker than I could when he first taught it to me. But I know that’s a physical thing, but still at the same time, it’s my brain telling my fingers to make that funky shape that didn’t feel natural.

Maggie Klokkenga: (24:21)

Absolutely. That’s absolutely very similar. And so, riding a bike is a physical thing. Going over financial plan, not as physical, but you might feel it emotionally, right? Because then it’s bringing up those money scripts, bringing up those reactions to what your thoughts are about money, but then telling yourself, okay, if you can have a thought that “this is something that’s going to help my family,” right? And then you just keep telling yourself that, and then being open to those thoughts, then it’s just going to help when you want that repetition say, “okay, I’m working on my estate plan with my attorney. This is going to help my family. I’m doing my beneficiary designations,” et cetera.

Stephanie McCullough: (25:02)

That’s a good point about bringing up the thoughts and kind of living with them more frequently instead of… Kevin, you and I talk about, sometimes people do a “financial plan”. They get this big binder and they stick it on the shelf and they never think about it or look at it again. That’s not really doing them much good.

Maggie Klokkenga: (25:24)

Exactly. When you think about how often have you seen… You might have a financial plan, you do it for a prospect, you prepare it. It’s beautiful. And then they never come back because they are overwhelmed. But you don’t know that because they’ve got their own thoughts about money going on. They probably made it to you. And they were like, “yay. I finally made it. I checked that off the list and I’m done for the time.” That’s it. That’s all I can do for right now, baby steps, which baby steps are fine. And I’m always coaching on baby steps. But if you don’t know what’s going on in their head, you can’t help them further. And so, if they put the plan in the drawer, you can’t see that.

Stephanie McCullough: (26:10)

I always ask clients, “how was money handled in your family growing up?” And they kind of sometimes ask me, “why the heck are we talking about this?” I’m like, “it’s to kind of uncover what barriers might be out there to you actually implementing whatever we decide on.”

Maggie Klokkenga: (26:25)

Yes, I’ve had several people tell me, when going into money scripts, “I don’t have any money scripts.” And I’ll just smile and nod and say, “okay,” and then just let them come to it themselves. Everybody has them and there’s got to be some good ones, some bad ones, but we all have them. We just don’t know that they’re there because we just haven’t been made aware of them.

Stephanie McCullough: (26:49)

Well, we probably have scripts about everything, right? Money just happens to be the thing that Maggie and Kevin and I like to talk about all day long.

Maggie Klokkenga: (26:58)

Like Roth IRAs.

Kevin Gaines: (27:00)

So, we want to extend this another five hours.

Stephanie McCullough: (27:04)

Oh, my goodness. So, what else do we need to know? What else is super interesting from all of your research and kind of how you’ve crafted your coaching practice that would be useful to our listeners?

Maggie Klokkenga: (27:19)

So, two things, and this is something that isn’t necessarily just money related, but I’ll give the example of money. So, you’ve heard of abundance and scarcity mindsets. So, abundance was talked about by Stephen Covey in The 7 Habits of Highly Effective People. So, abundance, he talks about that it’s a concept in which a person believes that there are enough resources and successes to share with others. And then on the flip side is the scarcity mindset, which is founded on the idea that if someone else wins and that they’re successful in that situation, there’s nobody else who can win. There’s always a loser. And so-

Stephanie McCullough: (28:00)

Zero sum game.

Maggie Klokkenga: (28:01)

Zero sum game, exactly. And so, the way that this can tie to money is that often people may have an abundance mindset saying, like when we were talking earlier about the money scripts, with money, “I can give my money away. I have control over my money.” Versus scarcity saying “I have no money and I can’t do anything fun in my life.” Something along the lines of that. Another one that I’ve heard is just being thankful for things, right? And being thankful and realizing that you have “enough” versus being frustrated or angry and having that scarcity mindset, because you’re looking on social media and you realize that person has that. And for you, that’s not enough.

Maggie Klokkenga: (28:48)

And you want more and you want more. But the problem is it’s never going to be enough. There’s always going to be that new thing and it’s still not going to satisfy you. So, the abundance and scarcity is just something that I like again, to bring up to people because even as simple as a W2 employee. So, when I was a W2 employee, I had the scarcity mindset that I had a finite amount of money that I could earn.

Maggie Klokkenga: (29:16)

As a business owner, I have this abundance mindset that I can earn all the money I want, right? And even within the money realm, you can say, “okay, I can earn all the money I want, I can create my own business,” but then maybe you have this other scarcity mindset saying, “but I’m terrified to invest my money with anything else other than myself.” So, you can have all these other thoughts. And again, it’s about being aware.

Stephanie McCullough: (29:43)

I think one place the scarcity mindset shows up, and I didn’t really put this together until you mentioned it, is I have women clients who feel guilty if they earn “too much,” whatever’s too much to them. Or, “I don’t deserve to earn that much.” Or “someone else deserves it more than me.” And I think that comes from the scarcity. Like, “oh, if I have more, that means someone else has less, which isn’t necessarily true.”

Maggie Klokkenga: (30:08)

Yes, it’s the scarcity mindset and it’s also money script because in their past they were told there is this finite pool of money. And so, they were most likely raised to say, “okay, well you’re earning this and so somebody is earning that and it’s not an infinite amount.”

Stephanie McCullough: (30:27)

“Money’s the root of all evil” and all those kinds of things come up too. “Rich people must be corrupt and of low moral standing.”

Maggie Klokkenga: (30:36)

Exactly.

Kevin Gaines: (30:37)

Or you have more than you earn. You didn’t earn this money or you didn’t work hard enough to get this money. And so, this is like a windfall that you are unworthy of.

Maggie Klokkenga: (30:49)

Yes.

Stephanie McCullough: (30:50)

We’ve seen that with people who have inherited, right Kevin?

Kevin Gaines: (30:58)

It’s a big issue.

Maggie Klokkenga: (30:59)

So that’s another great point. So, there’s something called your financial comfort zone. If you think of it in the neighborhood where you have lived the longest, okay? So, you know where the dry cleaners is, you frequent the coffee shop there, you know exactly where the nosy neighbor is who is in everybody else’s business. And if we’re in that financial comfort zone and our financial status is equivalent to our comfort zone, everything’s fine. But if our income increases or decreases significantly, and also in a short amount of time outside of that zone, we are not comfortable.

Maggie Klokkenga: (31:38)

So, like an inheritance, lottery winners, when we hear about lottery winners who they won all this money, and then next thing you know, you hear them filing for bankruptcy and it’s because they are spending their money again, subconsciously to try to get back to that financial comfort zone, right? Because they’re within their herd. It all ties back to this early history. They’re wanting to make sure that they’re with their group. Those boundaries are really strong about what is acceptable for money. And so, to be out of that, it really can unfortunately, cause some dire behaviors.

Maggie Klokkenga: (32:17)

So, the other thing you had asked about things when I’m working with my clients is, I’d like to present the three questions that George Kinder, who’s considered the father of the financial life planning movement, that he brings up. Because I feel that they really can… Again, going back to the money being overwhelming. When you ask and you both know in working with clients and trying to do discovery meetings and saying, “what are your goals? What do you want to do?” And it’s so vast, right? It’s just such a big question. And so, I really feel like his questions really drill down.

Maggie Klokkenga: (32:57)

And so, the first question is, so imagine you’re financially secure. You have enough money to take care of your needs now and in the future. So unlimited funds. How would you live your life? Would you change anything? And so that kind of starts the daydreams. It kind of goes, “oh, those daydreams might be possible, right? Maybe I can open that embroidery business, or maybe I can stay home with my kids part-time,” or whatever it is, or full-time. And then the second question says, now you imagine you visit your doctor. And your doctor has told you that you have five to ten years left to live. The good news is you will never feel sick, but you will have no notice of the moment of your death. And so, what will you do in the time remaining? Will you change your life at all?

Maggie Klokkenga: (33:47)

And this question doesn’t have unlimited funds. So, you have your current funds and that then just kind of drills down even more, what really is important to you? What are these things that you’re like, “oh, wait a second, okay, that embroidery business is really something that I really want to start? So maybe I need to just start doing it at night.” And then the final one is instead now imagine that the doctor has told you, you have 24 hours left to live. And so, you’re given this fact of mortality really being in your face. Do you have any regrets? Is there anything that you wish you could have been?

Maggie Klokkenga: (34:28)

Is there anything that you wish that you could have done? And so, with those, it very succinctly can just get you to a place where, especially when working with couples, to say, “okay, what is really important to us?” Interestingly enough, when I’ve been working with couples, usually the wives will say, “I want to make sure that my kids have all the experiences, have experienced all the things I wanted for them.” Whether it’s a vacation, travel, baseball, marching band. The husbands say, “I want to make sure that my wife and children are provided for after I’m gone.” And I just think that’s so interesting just because it’s been pretty consistent with their answers from both spouses on that. It was just different answers to the same question.

Stephanie McCullough: (35:23)

Yeah, years ago I went to a Financial Planning Association meeting in Philadelphia and George Kinder spoke. And he actually had us do the three questions right there in the session. And I was like, “oh, these are good. These are juicy.” And I went on to do a five-day training. And yeah, I’m a big fan of that work because people ask us, “what should I do with my money?” It depends, right? Let’s talk about you and your life and what’s important and who is important and all that stuff. That money is just a tool.

Maggie Klokkenga: (35:52)

Right, exactly. It’s a piece of paper.

Stephanie McCullough: (35:56)

And it’s a problematic one that we all have to deal with.

Maggie Klokkenga: (36:01)

That’s right.

Kevin Gaines: (36:02)

Yeah, too many people, we see it time and time again, that they spend so much time on the accumulation because they need to save for retirement. It almost feels like that they lose perspective of what the money is. That it is the means to the end. It just allows me to do what I want to do. But you have spent so much time, both internally and externally, (again, bashing our own industry for past transgressions) saying, “you’ve got to do it this way. You’ve got to do it this way,” that all of a sudden it’s a mortal sin to spend the money.

Stephanie McCullough: (36:36)

Well, I think it’s hard to flip, right? To go from being an accumulator to where you are kind of keeping score. Some people are like, “oh my gosh, I’m so excited to have this much in my retirement account.” And then you stop working and you have to spend it. And people are like, “but I can’t spend it because I won’t have that much.” Have you encountered that, Maggie? What do you think about that?

Maggie Klokkenga: (36:58)

I’ve encountered it a little bit in that money vigilance. So that’s one of the categories for the money script where you can… That’s basically, probably the good one out of the four categories for the money scripts. But it’s basically where you may have a little bit of anxiety about wanting to make sure you have enough money, but then you could flip it and it could go downhill quickly because you could become obsessed with making sure like, say that you’ve got that number. Well, that number is going to change. Again, it’s like stepping on the scale. The stock market fluctuates like your weight if you’re like me eating chocolate peanut butter all the time. So, I mean, you’ve got to just really be mindful of that and say, “okay, what am I working towards and what do I want in my life?” Not these numbers over here. These numbers, like you said, are a tool to help me so I can do those things. That’s all it is. And so, I’ll bring that up just to remind them that this is to help you. It’s not to basically be the protagonist in your story. You’re the protagonist, right? This is just a supporting character.

Stephanie McCullough: (38:04)

Yeah, I like that. Anything else we want to discuss before we wrap up? Anything we missed?

Kevin Gaines: (38:11)

Well, let’s be honest. Much like a Roth IRA, we could actually spend four or five hours talking, just delving into the psychology of money. We could just spend five hours talking about my hang-ups with money, but… So, money scripts, you just mentioned that there’s one. What are the other ones that we’re dealing with?

Maggie Klokkenga: (38:34)

So, Dr. Klontz and his father, they put the money scripts into four categories. So, Money Vigilance, like I talked about that is considered the good one out of the four, right? So, you are saving, you’re a little bit anxious about your money. You may be telling people that you earn a little bit less than you do as you might have a little bit of secrecy to it. So that could work and go a little bit downhill because you may become a little obsessed about your numbers and you want to hoard it, right? So, Money Avoidance, that is where money is “bad.” When Stephanie was talking earlier, “rich people are greedy” or there’s some virtue in not having money. So, we want to avoid it. So, going back to financial comfort zones, right?

Maggie Klokkenga: (39:22)

People want to avoid having a lot of money because they want to be in their financial comfort zone. And so, they just spend it, they just get rid of it. And again, that’s maybe a subconscious spending pattern that they’re doing that they just don’t realize. So, the third one is Money Focus. Sometimes you might hear of it as money worship, but it’s “more money, more things are going to solve our problems and make us happy.” We know it’s not the case. We know of the surveys, at a certain dollar amount that we’ll reach happiness and beyond that. That’s it.

Maggie Klokkenga: (39:56)

And then Money Status. This is where self-worth equals your net worth, which again, we know is not true, but that’s the “keeping up with the Jones’” effect, right? So, you want to buy some new flashy things, you’re really wrapped up in that status and sense of self. And in this one, you may be telling people that you actually earn more than what you really do.

Stephanie McCullough: (40:19)

Fascinating. And this is where I always say, don’t compare your insides to someone else’s outsides. If you do, at least what I’ve talked to people about is if you find yourself feeling like you need to keep up and wear the designer clothes and drive the fancy car and dye your hair and nails all the time, kind of thinking through like, “all right, those other people that are doing that, I actually don’t know if they’ve got anything saved for retirement or if they’re drowning in credit card debt. I don’t know how they’re keeping that up. And is it okay for me?” And if it fits in your budget, okay, great. And if it’s important to you. But again, a little awareness.

Maggie Klokkenga: (40:58)

Yeah, so let me bring up a quick survey. So, there was a survey that had been, or a study that had been done in the University of Leeds and they had 200 people that were in a hall. So just a very large room. And they told all the people don’t do anything. Don’t move, don’t say anything. Don’t even make any gestures with anybody else. So, they were told to just wait. And then they told 10 people to walk to a certain place and all the other people followed. And so, what the study concluded was that it only takes 5% of a group of people to essentially lead the others into this herd mentality where you think, “but everybody else is doing it.” So then “I want to be part of the group too,” because we want to feel socially connected. We want to feel like we’re part of our group. But like you said, Stephanie, oftentimes we don’t know what’s behind, Wizard of Oz, what’s behind the curtains. We don’t know. Everybody else is just keeping up with everybody else, getting possibly further into debt. And then you’re thinking, “well, what now? Where am I at?”

Stephanie McCullough: (42:12)

Goodness.

Kevin Gaines: (42:12)

Almost like I got a script running through my mind or something.

Maggie Klokkenga: (42:13)

Almost, it’s fascinating. Yeah, the brain stuff I literally could talk about all day, just because for me, again, it goes back to why I started my firm Make A Money Mind Shift, because it literally is shifting the way we’re thinking. And it’s bringing up first and foremost, why we’re spending the way we’ve spent in the past, and then focusing on, okay, now that we know the why’s, let’s figure out where your money is currently going. Tracking that spending, setting some action goals to get to those dreams that you want. We do some visual exercises and then really at the end, we’re just saying, “okay, here’s now your cashflow plan. Here’s your spending plan.” I don’t use the word budget. I don’t use the B word because like the word diet, nobody likes it. And then I really want to just say, “okay, here it is.” Set you free and you’re going to go be in control of your finances because that’s really what people want. They want to be in control. They just don’t know what to ask. Steph, I know you’re always saying, you just need to know some questions to ask, but unfortunately, we don’t know what we don’t know until we know, right?

Stephanie McCullough: (43:24)

Totally, because no one taught us about money.

Maggie Klokkenga: (43:26)

That’s right.

Stephanie McCullough: (43:28)

Cool. Well, Maggie, if people want to learn more about how you work, where can they find you?

Maggie Klokkenga: (43:32)

So, they can go to my website, which is makeamoneymindshift.com. They can find me on Facebook or Instagram or LinkedIn, all at Make a Money Mind Shift. And on my website, you can subscribe to a weekly email where I basically just talk about money related articles for that week. And you can also connect with me on my website there and we can do a free 20-minute call and we can decide, you can tell me money worries, what’s keeping you up at night and I can tell you how I think I can help you.

Stephanie McCullough: (44:02)

Excellent. Thank you so much for joining us.

Maggie Klokkenga: (44:06)

Thank you so much for having me. This was fun.

Kevin Gaines: (44:08)

Let’s do it again.

Stephanie McCullough: (44:10)

Yeah, we can definitely go longer.

Kevin Gaines: (44:18)

Well, I’ve got to say that was definitely an interesting conversation that, like many other things, could probably go on a lot longer. And I had to say, I’m left with more questions than I got answers because it opens up these possibilities. I’m actually a little ashamed to admit this because the single thing that resonated with me the most was her saying budget and diet. And the moment she says that, all of a sudden it dawns on me. It’s like, oh yeah, those are both two things that fail or get busted. Those aren’t things that succeed, rarely.

Stephanie McCullough: (44:53)

Well, they feel like restriction. They feel miserable. Nobody wants to live on a budget or on a diet.

Kevin Gaines: (45:00)

Yeah, and like I said, not only was it the shock of the connection for the first time after 50 years resonating with me. I was like, oh, maybe I’m going to be able to have better conversations with people now because I actually… My script as an advisor is yes, these are things that we do. So yes, we just got done talking about things that happen with people’s minds. As advisors, we have the same hang-ups that we get used to doing things a certain way, saying things a certain way without a whole lot of understanding of why we say this stuff. It’s like, oh, well, that’s just what we learned, and now we’ve processed it.

Stephanie McCullough: (45:40)

Yeah, that’s a good point, that we go by our unconscious stuff too. What I like best though is this idea of reducing the shame by learning about the brain and how we’re wired and how we’re naturally inclined. Our whole point that human beings are naturally inclined to be spenders, not savers, right? It kind of goes against our wiring to put stuff away for another day in the future. So those feelings we have of like, “oh, I’m a terrible person because it’s hard for me to save money.” Actually, it just means you’re a person.

Kevin Gaines: (46:14)

Yeah, we see this time after time that the procrastination, when it comes to saving, snowballs, and she basically just kind of explained to how that snowball evolves is, it’s not something we want to deal with. And once we start having issues, it just feeds into our natural inclinations of not doing it.

Stephanie McCullough: (46:36)

Which is why setting things on autopilot is so smart, right? You set it and forget it. Like the 401k at work. You sign up one day and then it just happens behind the scenes. You don’t have to think about it. That’s really the key way to save for the future. So, I do think all this kind of insight and transparency into how our brains work is super valuable. I just love Maggie’s whole approach. And she brings a lot of real background, substantial knowledge behind it with her different designations being an accountant and a financial planner.

Kevin Gaines: (47:10)

She’s definitely comes at it at a few different angles. And like we say, it’s putting it all together. That’s the real genius of the process.

Stephanie McCullough: (47:20)

Yeah, for sure. All right, so we will link to Maggie’s stuff in the show notes, for sure. We might also take a picture of Kevin’s cereal collection, might have to be in there. And thank you so much for joining us. As always, we really appreciate your listening and we would love to hear from you about what kind of topics you want to dig into. So please reach out to us. You can find the website on takebackretirement.com. Thanks so much for being with us. We’ll talk to you next time. It’s goodbye from me.

Kevin Gaines: (47:49)

And it’s goodbye from her.

Stephanie McCullough: (47:54)

Be sure to subscribe to the show and please share it with your friends. Show notes and more information available at takebackretirement.com. Huge thanks for the original music by the one and only Raymond Loewy through New Math in New York. See you next time.

Disclaimer: (48:08)

Investment advice offered through Private Advisor Group LLC, a registered investment advisor. Private Advisor Group, American Financial Management Group, and Sofia Financial are separate entities. The opinions voiced this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. This information is not intended to be substitute for individualized tax advice. Please consult your tax advisor regarding your specific situation.