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How To Transform Your Relationship With Money With Simonne Gnessen

Millie Ngai-Lenoir

Money can be a loaded and emotional topic. Our beliefs around money influence all aspects of our financial journey, from our earning capacity, to how we spend money and how we save for the future. 

However, our money beliefs can be deep rooted and often subconscious. It can be tricky to know where to start when it comes to understanding our feelings about finances. It’s equally difficult to recognise behaviours we may have adopted. 

In this episode of The Wallet, we are joined by Simonne Gnessen, founder of Wise Monkey Financial Coaching. She is also the co-author of the book Sheconomics. 

Simonne has over 10 years of experience as a financial advisor. Today, through Wise Monkey Financial Coaching, she empowers her clients to build a better relationship with money, helping them use it effectively to achieve their goals. 

In this episode, Simonne shares powerful exercises that help us understand how we think and feel about money. She offers practical tips for building a positive money mindset once you have identified your limiting financial beliefs or blockers.

We also take a look at some of the common emotions that drive impulse purchases, as well as how we can resist today's temptations to spend. 💕

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You can listen (45 min) and subscribe here:

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1. What is a ‘financial coach’?!

If you ‘re familiar with the world of personal finance, you’re probably familiar with financial advisers, even if you only have a vague idea of what they do. Financial coaches, however, are newer to the financial world – twenty years ago, Simonne explains, coaching was non-existent in the UK. Although financial advisers and financial coaches have distinctly separate roles, both play a pivotal role in helping their clients to gain full control over their money and to help them to achieve their financial goals. So, what is a financial coach? And what is the distinction between a financial coach and a financial adviser?

A financial adviser is someone who helps their clients to build wealth and prepare them for their financial futures through long-term financial planning. The key distinction between a financial adviser and a financial coach is that financial advisers are authorised by the Financial Conduct Authority (FCA) to recommend specific financial products to clients (for example, a specific investment fund for their pension). As such, financial advisers can advise in all areas of personal finance, although they tend to lend their focus to meeting comprehensive financial goals through the execution of financial products. For example, financial advisers will work with clients who want to manage their assets, build an investment portfolio or grow a nest egg for their retirement. Financial advisers will also assist their clientele with taxes, estate planning and long-term care planning. Simonne describes financial advice as being centred around helping people, generally with a minimum investment of around £100,000, to plan and invest around their long-term financial goals through the recommendation of specific financial products.

In contrast, a financial coach is not someone who will provide advice where specific financial products are concerned, but rather someone who will help their clients to understand the basics of personal finance and help them to build healthy financial habits. Financial coaches will not recommend specific financial products since this would be regulated advice and financial coaches are not authorised by the FCA. A financial coach empowers their clients to reach their financial goals through educating them on money mindset and how to handle their finances responsibly. Typically, financial coaches work with clients who want to save money, create a budget, face their debt or those who want to enhance their financial literacy in general. In the same way that sports coaches help athletes to enhance their game performance from the side-lines, financial coaches impart the knowledge and skills that their clients need to improve their ability to manage money.

Prior to founding Wise Monkey Financial Coaching in 2002, Simonne worked as a traditional financial adviser for 10 years. Simonne established Wise Monkey Financial Coaching on a mission to “demystify the world of finance, to relieve clients of stress relating to financial issues and to help clients use their money effectively so that they can achieve their life goals”. Simonne was inspired to step away from her role in traditional financial advisory to become a life and money coach when she realised that there was a need for guidance and support relating to money that had nothing to do with products, but instead related to the emotions and basic beliefs underlying people’s money mindsets.

2. Taking emotional control and going beyond beliefs

Personal finance is a topic fraught with emotion and our formative belief systems surrounding money can either keep us from meeting our life goals or facilitate us in fulfilling our dreams. Research from the Money and Mental Health Policy Institute showed that money and mental health are also intricately linked. In a Money and Mental Health survey, 86% of the 5,500 respondents suffering from existing mental health problems said that their financial situation had made their mental health problems worse. It is therefore crucial that we take charge of our emotions and build better relationships with money even before we move onto the more practical steps of managing our finances.

Our attitudes to money are shaped by our emotions which can work against even our best instincts when it comes to managing our finances. It is because of our emotions that our financial decisions aren’t always rooted in common sense. As a result, our emotions surrounding money can dictate the trajectory of our financial goals and outcomes. This is particularly relevant, Simonne argues, if you have an ‘emotional block’ that prevents you from carrying out positive actions that are required to keep your finances on track. For example, if you are in debt but you are not prioritizing paying it off because when you are emotional you buy expensive items to soothe your feelings. By stripping money of its emotional significance, you will set yourself free to take your finances in hand. The four core money emotions given by the Sheconomics guide are:

  • Fear

  • Anger

  • Disgust

  • Shame

In this episode, Simonne touches on how we can use ‘emotional reconditioning’ to liberate ourselves from our money emotions. Emotional reconditioning begins when we sit back and try to spot the emotion we are currently feeling towards money and, in turn, identify the trigger of that emotion. By decoding the trigger of a particular money emotion, you will be able to catch yourself from making poor financial decisions and empower yourself to challenge the emotion. Once you have challenged the emotion, instead of giving into it, you will gain the ability to connect with your financial goals.

In a similar vein, our beliefs influence the way we behave around money and, consequently, parameterise our possibilities. For example, if you believe that you are bad with money, you probably will be. Given the power of our monetary beliefs, we must beware of misplaced, self-limiting beliefs that culminate in a distorted financial reality. Simonne argues that, more than any other factor, many women fail to manage their finances responsibly because their underlying perception of themselves in relation to money is distorted. She provides the personal example of her career transition from traditional financial advisory to pursuing her dream as a financial coach and founder. Having grown up with a father who was a highly respected, yet underpaid jeweller, she recognised that at the inception of her business she had been undercharging her clients; Simonne realised that she had been undervaluing her professional financial coaching services because she had grown up with the belief that if you do something you love, the trade off is money. By reprogramming her self-limiting belief, Simonne explains how she was able to overcome this false trade-off.

3. With goals, you can spend with power; by spending with power, you can achieve your goals

Having clear, defined and actionable goals should be the at heart of your money management strategy. By setting ourselves financial goals, we create for ourselves an avenue to look after our long-term interests and resist the pull of instant gratification spending. Once you have identified your financial goal, you will be able to use backwards induction to realise what you need to do at present to make it happen.

Financial goals take the pain out of resisting the temptation to spend because instead of thinking about what you are missing, you have something to look forward to. Saying no to a girls’ holiday trip, for example, sits easier if you are excited about saving for the deposit for your first home. Thus, by creating and sticking to long-term financial goals, we are able to ‘spend with power’…

Spending with power means you can balance a good quality of life with financial responsibility, thus taking care of both your current and future-self. When you spend with power, you will be able to:

  • Resist the compulsion to spend in the face of adversity

  • Confront your spending patterns

  • Start to save as you spend less than you earn

  • Create a spending power so you can enhance your spending and move towards your financial goals

The 7 Laws of Sheconomics

The 7 Laws of Sheconomics encapsulate everything we require to remain in full financial control. These Laws pioneered by Simonne Gnessen and Karen Pine in ‘Sheconomics’ simplify the world of personal finance, making for a stress-free and brighter future.

📋Law 1 - Take emotional control: be aware of how your emotions affect the way you behave with money.

📋Law 2 – Go beyond beliefs: know that your financial beliefs can become reality.

📋Law 3 – Spend with power: make sure all your spending decisions are made for the right reasons.

📋Law 4 – Have goals: make money fit your life plan.

📋Law 5 – Look debt in the face: Face up to what you owe and decide how to pay it back.

📋Law 6 – Share financial intimacies: talk openly and honestly about money.

📋Law 7 – Know tomorrow comes: take action now for a secure future.

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You can listen (45 min) and subscribe here:

Apple Podcasts

Acast

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Resources: 

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