Financial Literacy

Any one involved in financial literacy counselling has heard a version of this statement in his/her career; "I have all the financial literacy skills but I cannot seem to make myself do the things that will make me financial competent and successful. It must be psychological."

Hi I am Steve Bulmer and I agree, it is psychological. How do I know?

• I received my degree 35 years ago in Economics and Psychology. Today that would be a degree in Behavioral Economics...and I thought I studied Psycho-Economics...go figure. The point is that I figured the connection between the two out then and now financial literacy education is becoming mainstream thinking.
• I always read to build my knowledge of the relationship between money and psychology. I thought I would keep a low profile in my career because I did not think I had the psychological stamina to survive in a corporate environment. Now I realize it is they who are all nuts. I got it right. I got the correct financial literacy information.
• The irony is I am as successful as any of my peers and I worked blue collar work. I just managed the spending end of my financial literacy program to get what I wanted. I retired from "work drudgery" at age 52 and that was 8 years ago. I am a member of the sandwich generation so I handle or mentor finances for 3 generations of my family. For one year of 12 hour days 7 days a week I rebuilt my house. I have worked harder in my life but this is the most rewarding work has ever been. Since then I take care of business, take care of my health, take care of my house and take care of my family. In my spare time I golf and travel.
• I have been visited by all 6 of the financial psychology demons in my life. I didn't really understand it all until retirement when I finally had time to review the financial literacy lessons I had learned over a lifetime.
• I have needed the help of Financial Heroes in my life to get me back on track at times so I know first hand who they are and what they do.

The topic of Financial Literacy is poorly defined. Money guys think everyone should be like them and understand money as the only calling in life. Others realize there is more to life but know something must be done to level the financial playing field because some have overwhelming advantages. The whole concept has been ignored for centuries except to mentor those who already have some financial literacy education. These days there is an international focus on Financial Literacy. But just what is Financial Literacy?

The 1% to 10% of the population that focuses on financial knowledge have that topic covered 6 ways sideways. They are logical and money is logical and all is orderly in their world.

However, the prime management tool for survival for the species is emotion. We search for things like prestige and power over others and that makes us feel good. In "cognitive biases" we have 106 different ways to be in denial or soothe our bruised egos when we get financially bullied and abused. We do get better at integrating the logistics of money into our behavior patterns as we get older because as we get older we think more rationally...you know...the old older and wiser thing.

In the meantime we have to figure out some way to keep the majority of the population involved in some kind of a financial literacy program for their own good. It is not that they do not want to manage their finances properly, it is that they cannot help themselves when primal urges take over. Even those in the 1% to 10% can wander off into some primal urge gratification that sets them back or may even destroy them financially.

On this website we take the story line of Financial Literacy and identify the characters. We study the good characters and the bad characters to give us a Framework for Financial Literacy. Once we know what we are dealing with, we can identify what Financial Literacy means and what we want from a Financial Literacy program. Who should it be for and at what level should each individual person engage in a Financial Literacy Program? This website is trying to start the discussion by identifying what we should be talking about first and that is the Psychology of Personal Finances. After that things fall into place at least on a personal level from my experience.