Episode 56: Money on Your Mind: Boost Your Financial Confidence – Melissa Leong

REAL TIME Podcast

When was the last time you talked in depth about your money? Research shows talking about finances can build financial confidence, and lead to better financial outcomes. But you need to know where to start.

On this episode of the REAL TIME podcast we’re joined by Melissa Leong, best-selling author and resident money expert on the daytime talk show, The Social, to dive deeper into the connection between money and happiness, how we use emotion over logic when it comes to financial decision making, some of the most common mistakes made by self-employed individuals, and how being more financially aware can help REALTORS® in their businesses.

Transcript

Erin Davis: What if I told you money can buy happiness, but maybe not in the way you expect? Hi, I'm Erin Davis, and welcome to REAL TIME, the podcast for REALTORS® brought to you by the Canadian Real Estate Association.

Erin: Today we're joined by Melissa Leong, bestselling author and resident money expert on the daytime talk show, The Social, to talk about how financial awareness can be the key to a happy life. Melissa, welcome. It's so good to have you here today. Thank you for joining us.

Melissa Leong: Thank you so much for having me.

Erin: I think it's probably safe to say that money is a taboo topic to a lot of people, and we don't talk about it enough. There is a financial awareness that seems somehow to be missing. Can you walk us through financial awareness and how that relates to financial literacy?

Melissa: Most people focus on financial literacy as this, "Oh, we need to have our children learn more about it in school, and we need to make sure that more people are empowered with the knowledge of how to manage their money and make better decisions because they'll have the facts." I think that's important. I am a financial literacy champion, so absolutely I think that's important. I love that you talked about financial awareness because just because you know something, it doesn't mean you always do what you know.

Why I love to also talk about financial awareness as a sister to financial literacy is yes, we can know everything there is to know about personal finance. That doesn't mean we're going to always make the right decisions when it comes to, financial empowerment and structuring our money in a way that best gives us the opportunities and the life that we want to live. It's two things to keep in your back pocket.

Erin: Okay, so let's dig into that a little bit. Why don't we do things like save, for example, even when we know that it's right? We have so much cognitive dissonance in our lives and so many other places that could be 17 podcasts. Let's talk about this in this episode and why don't we do what's right, like save?

Melissa: This topic could fill volumes. There are many incredible, incredibly smart individuals who are devoting their lives to neuroeconomics or behavioral economics, which is just the study of why we do what we do when it comes to money. I would love just to highlight maybe quickly three of them. One of the three things, some things that what causes us to behave strangely when it comes to money because we're not always rational. We're human beings and there are wonderful quirks to us.

One of the things is that we do not operate well under stress. There's a part of our brain that regulates the long-term repercussions of our actions, which you need when figuring out money decisions. That goes offline when you are stressed, which is fascinating because as you know, money is a stressful topic for many, many people. It's the top thing that we stress about. It's what causes people to lose sleep at night, according to many surveys year after year. It's the top predictor of strife and conflict and separation in relationships.

You add a stressful topic, you have a situation where your brain is focusing on the present versus the future, which is called present bias. You are having your willpower affected and your impulse control affected. Then you're making some interesting money decisions that may be out of character for you when it comes to your wallet, your portfolio, your investment choices, your real estate choices, whatever it is, which just leads to more stress.

You can see, Erin, how you're in this vortex. You're trapped in this cycle. We use money to alleviate pain because it's just a tool. Many people use money to alleviate stress and boredom and anxiety and insecurity and inadequacy. You get this dopamine release when you use money, when you spend money, and that temporarily does improve your mood, but it is temporary. You have this chasing of this feeling with money, which can lead to a lot of stress. That's one thing.

We often say, "Okay, well, you need more knowledge there. You need a budget." You need all these things. Actually, sometimes what you need is a stress reliever. You need a moment or an outlet. If you know that on the way home, you're going to be making some big decisions when it comes to some sort of financial deal, you go for a walk first so that you are dealing with the cortisol component, the regulation component, as well as the money component. That's just one. Very quickly, another one is we're very optimistic. We're very optimistic. People think, no, I know Debbie Downers.

Human beings, the majority of, us think that we're above average drivers. My mother-in-law thinks she's the best driver in the world. She thinks that everyone's waving at her with just one finger. We have a hard time imagining scenarios where things are not going to work out for us. That can make it really hard to plan for the future or have plan Bs or choose the right investment or home or something because you are disconnected from your future self because you're thinking positively. That's the third.

We have a disconnect when it comes to our future selves. There's this fabulous, I say fabulous. It's actually gross, this fabulous experiment that involves people drinking a cup of soy sauce and ketchup. People think, "Ew, right? I'm not drinking that. That's so gross."

Erin: No.

Melissa: My future self will drink it. A stranger and my future self will drink it because you are disconnected from that future self. Imagine that you're making some long-term plans. Studies show that you can actually get people to save more money if they see an age rendering of themselves.

Erin: Okay. Yes. I need to delve into that. Let's say there's an app and we know there are probably a hundred of them out there that will show you what you're going to look like in 20 years, although why anybody would-- Anyway.

Melissa: To save more money, according to research.

Erin: Okay. Explain that to me. Explain that to us all.

Melissa: According to neuroscience, your prefrontal cortex has less activity when you think of your future self versus your present self, which makes it very difficult to make long-term plans and to project out into 10, 20 years from now what your life is going to be like, what you want your goals to be even five years from now. It doesn't have to be looking at a photo of yourself through some sort of app, Erin, if you prefer not to, but it can also just be, say you're working with a client, and you want them to think about the future or make an investment for the future. You might talk to them about, okay, well, what do you envision your day-to-day or your life or what do you envision for yourself say five years from now and really spend time, just connecting with that part of yourself, that helps you make decisions in service of future you as well as balancing the needs of the immediate.

Erin: Okay. Going back to the point about optimism, which I find fascinating, if the current situation is unstable, whether in your life or your country or the world or whatever, whether it's small picture, big picture, how does that affect our decision-making and that optimism? Are you able to delve into that just a bit? I'm really curious about that, Melissa.

Melissa: I think sometimes when hard things befall us, we do get stuck in this, "Okay, well, it's always going to be like this," because right now is what you can imagine. It's a leap to try to imagine an alternate reality for yourself. Yes, absolutely. If you are in a difficult financial situation, the longer you stay in that situation, studies have shown that it is harder to get back onto stable ground. That being said, the research supports that as a whole, human beings tend to be more optimistic.

They'll find a way to justify something. They will find a way to tell themselves a good story. For example, you use the example of something difficult has happened or something tough has happened in the world. Your brain will reach for the good. For example, say you make a purchase and you regret it, your brain will actually--

Erin: We've all been there.

Melissa: Your brain will start to tell yourself things like, "Oh, well, I really needed it." Or, "That thing, it wasn't so bad." There are lots of great studies like this. This is a really fascinating report talking about, say, the Beetle who didn't make it into the band and how he says that was the best thing that ever happened to him. Someone dealt with something difficult, and we do, we find a way, we find the bright side.

As someone who works with the public when it comes to making big financial decisions, life decisions, I think a lot of wealth professionals have this wonderful and big responsibility to walk a tightrope when it comes to understanding and honoring someone's optimism, but being that voice where you are saying, yes, but on the other side of this coin, you also need a healthy dose of fear and paranoia because you have to understand that while optimism is the driver of moneymaking, you think I'm going to buy this house, it's going to be great. Everything's going to work out.

On the flip side, you also understand some of those decisions, some of that luck that you've had, some of that money that you've made is due to life circumstances and good luck, and you never know when that might change. To also make decisions and have a plan for the future that protects your future happiness.

Erin: I'm feeling better just listening to you already, Melissa. Of course, we can read Melissa's work as well, because you wrote a book about the connection between money and happiness. I would just love to explore that a little bit more with you now. What is the connection there? How can better financial awareness lead to a happier life?

Melissa: Oh, my goodness. I have a secret for you. Actually, it's not a secret, because I wrote a book about it. You can buy happiness, but there's nuance. You have to spend it and manage it in a certain way, which is why I ended up with this entire book about it. Because you asked me at the top, what is the connection? There are thousands upon thousands of pages of research that try to explore this. The most fascinating one that I really like from 2020 is a mystery experiment. Researchers, including two at the University of British Columbia, asked individuals around the world to sign up for this mystery experiment. Would you do that? Just, you have no idea what's going to happen?

Erin: I think I would because of my optimistic streak.

Melissa: That's right. That's right.

Erin: Yes. Okay. I'm in.

Melissa: I would too. You know what, Erin, we would be rewarded because turns out those 200 people got $10,000 to spend. There was a catch.

Erin: Oh. Let's go shopping. Let's do it.

Melissa: There was a catch. Wait, wait. There was a catch.

Erin: I knew there would be.

Melissa: You could spend it shopping on anything you wanted. You could just spend it, but you had to spend all of it in three months, every last cent.

Erin: No problem. Go on.

Melissa: The question was, would these people be happier than a control group who did not get $10,000 to spend in three months? What do you think?

Erin: Oh, I don't know. I'd get so much written about it. The stories would be wonderful.

Melissa: Absolutely. They were happier. They were happier after three months.

Erin: Good. I hope so.

Melissa: What's fascinating is there's all this nuance. Some of it is, for example, if they already had, the more money they had to begin with, the less happy that money made them.

Erin: That makes sense.

Melissa: Also interesting is how they spent that money determined what made them most happy, which we can also talk about later. I wanted to emphasize that this study did not follow these individuals beyond, say, a few months after this spending spree. There is some suspicion. There's some thought that the happiness maybe wouldn't last because of this thing called hedonic adaptation, which means that you just return to a baseline of happiness no matter what happens. There's a study of lottery winners versus paraplegic and quadriplegic individuals who had become that way after some sort of accident.

They found that their levels of happiness returned to a baseline after this, whatever incident they endured. As well as the people who were survivors, they enjoyed the little things in life more than the lottery winners. Things like hearing a joke, spending time with friends, reading a magazine. There is a lot of discussion that needs to happen. We always say, well, how much money do you think that I need to be optimally happy? Researchers have tried to give you this answer.

A 2018 Purdue University study found that the optimal number for life satisfaction is $95,000 US pre-tax per single-family household. Once you make that, you should be satisfied with life. If you make between 60 and $75,000, that on average is the sweet spot for just feeling happy day to day. Hopefully, you guys are all happy. Everyone's happy right now because we're all together and listening to this great information. What was interesting, Erin, is that more money above these thresholds, once your basic needs are met, is actually associated with a decrease in happiness.

Erin: Is it more money, more problems?

Melissa:

Erin: What is it?

Melissa: There are a lot of hypotheses about why that would be, and it all makes sense. Maybe you are working more. Maybe you've taken on a huge client load. Maybe you are spending less time with family and friends, less time in the nature. You are acquiring more material goods, or you are competing more with other people, say, I don't know, online perhaps. That all leads to a decrease in happiness.

Erin: That $10,000 that you talked about from the UBC study, I'm going to take a guess that charity, or those who didn't just run out and run up a card and then pay it off with the $10,000, that they felt more. There's got to be an element of altruism in there somewhere, Melissa.

Melissa: Yes, actually. Of the $10,000 that they received, people spent an average of $6,400 on other people. Of that $6,400, $2,000 was earmarked for strangers, for donations, which is lovely. That is, according to science, one of the things that will boost your happiness, giving money to other people.

Erin: That is just so inspiring. You absolutely make science sing, Melissa. It's wonderful. Your areas of expertise are behavioral finance and neuroeconomics. Can you share some examples with us of how humans use emotion and intuition over logic when we're making financial decisions?

Melissa: Absolutely. We think that when you are making a financial decision, it's about numbers or projections or profit. Experts will say that the vast majority of your money decisions are not based on logic at all, which is why I'm so happy that we started this conversation with talking about, yes, it's important to know things, but it's also important to understand that you're not going to always do what you know. You are going to be under duress sometimes. For example, I know that after school, when I pick up the boys, they're going to be screaming. They're going to be hungry. I'm going to be stressed out from a long day of work, and I'm not going to be making the best financial decisions.

I'm going to be ordering food on my phone, or I'm just going to say we're going to go out and eat. To outsmart yourself, to know that your brain is not going to always be logical when it comes to your finances, you have to make another plan. You don't need to hack the system. You understand that you can't be trusted sometimes. This is where things like having a strategy, making larger goals, sitting down with wealth professionals, having an automatic deduction of money that goes to your priorities, your emergency fund, your vacation fund, your retirement fund.

Then when you're in a tough position and everybody's yelling and screaming and crying and whining, you say, "Fine, I am going to order all of the food we want right now," and then not stress more about it, creating, again, that pool of stress that just makes everything worse.

Erin: Yes. Instead of just digging into your wallet and throwing out the money, you've got that side pocket in the wallet where you had put away money, a couple of 20s or whatever for the emergency trip to the drive-thru, metaphorically speaking, of course, because we all use cards and stuff, but that makes total sense. They used to call it like a slush fund. Is there a terminology now for that place where the money is that you know you can go to it when you're going to make a rash decision or you won't be your best, Melissa, at that moment. You're being screamed at mom.

Melissa: Absolutely. When we talk about money, we have to understand that language is powerful. You call it a slush fund, but if you want to call that something else, something more empowering, something more fun, I call mine a spending account. When I sit down and go over my budget and calculate my net worth with my husband, which we do quarterly, just to make sure that we're on track financially, that we are growing wealth, and that we are paying down debts, we work out, these are our priorities. These are our goals. This is the money that's going to be siphoned off from our account that will go to those goals.

We are also going to earmark this amount of money per week to spend on whatever we want. The spending account means that, Erin, if I have money in there and you and I want to go for dinner, it is my treat. I'm happy to spend it on other people because I have it.

Erin: Sounds good. Paint a picture of what that looks like, sitting across a desk with your laptops open, or are you at the kitchen table with glasses of wine or coffee or how do you do that in a couple where you're both entrepreneurs?

Melissa: Erin, can we do our budgets together? That sounds lovely with a glass of wine. You know what? You did bring up an excellent topic, which is if you're going to talk about money with anyone, you want to make sure that the timing is right because, again, when your brain is not in an optimal place, you're not going to have the resources to be able to be in that moment. My husband and I, we usually do it after a period of connecting.

Maybe we've gone for a walk or maybe we've done some-- I call it a dream sandwich. You put something nice, you do something nice, you talk about something nice, you sandwich in the hard work and the talk of the sacrifices that need to possibly be made, and then you finish it off with something nice. Maybe like you said, a glass of wine, a toast to, "Hey, we're on track. This is great. We've made some shared goals. This is fantastic."

I think that wealth professionals, REALTORS®, they have this tremendous capacity to use that Bluetooth connection with people. You can help someone co-regulate. If they're making a tough decision, if they're looking at something and they're not sure, "Okay, what are the consequences of me buying this home versus this home?" Rather than continuing to talk, which is what some wealth professionals have done. Sometimes my husband does that to me. What I would prefer is that you are empathetic. Empathy is your superpower.

If you can lead with compassionate curiosity, if you can connect before you correct, if you can signal safety by instead of continuing to talk, take a moment and understand that right now, maybe you don't notice that I am experiencing this flush of hormonal secretions and there's cortisol in my body now. All you notice maybe is a slight fidgeting or a tapping of my foot because my body is trying to self-soothe in that moment or self-regulate or a furrow in my brow. You could pause and connect with me or pause and connect with yourself, which means take a breath.

There are lots of studies that show that when you are working with someone, when you're speaking with someone, if they can regulate themselves and calm themselves, that actually signals to my brain that I can lower my own arousal. Those are the people that I want to work with. Those are the people that I want in my life. There are a lot of surveys, there's research that shows that the people in your life that you work with when it comes to building, having milestones, like buying a home or planning your retirement, these people, the more empathetic they are, the bigger their client base, the more that they have client satisfaction on their side, the more that they have referrals.

I just think that we could all lean more on the humanity when talking about money and when working with people when they are making money decisions.

Erin: Is there a language of empathy that perhaps we don't know, Melissa? I know that when my husband tells me to calm down--

Melissa: Oh my alarm bells.

Erin: Yes, we're going to be on Dateline in a few weeks. You know what I mean. You're sitting across from someone and that Melissa is fidgeting or she's getting a little red or self-soothing and all of these things. What is the right thing to say at that moment that doesn't sound condescending, that doesn't come off as calm down? You know what I mean?

Melissa: Absolutely. I think it's leaning back on what I was talking about, which is you don't always have to say the right thing. Sometimes it's to make sure that you yourself are staying steady in that moment. You're the steady pilot. There's a lot of turbulence around you, but you're going to try to stay calm and stay positive and make sure that your energy is not going to shift the room. You can let this person experience whatever they're experiencing and validate their experience.

If you see that they're having trouble, you can say that. I see that you're struggling with this decision. How best can I help you? How best can I serve you? I am a safe space for you. I've heard of excellent sales research that talks about just even opening up about your own vulnerabilities and talking about your own values. If I were in your shoes, I would also feel stressed. In the past, I've done this, just to create more of that connection. Again, empathy is your superpower, your connection with this person. When you are speaking about money, even your own family members and trying not to judge and trying not to do anything but be, again, a compassionate listener will go a very long way.

Erin: I love that. That's really good. Thank you, Melissa, so much. Listening. Okay. How can we see or hear through the noise? How can we find somebody to trust when everybody on, say, TikTok, for example, is pretending or saying they're a money expert?

Melissa: There is a lot of noise out there. There was a lot of noise even before social media. I will say I personally love that everyone is talking about money. I know, social media, there's a lot of strange information, misinformation, fraudulent information out there. We have our phones constantly. People can reach us at all hours of the day, even when I'm not in the right state of mind to be making a big financial decision. What I always say is when you are looking for information, even though the internet has democratized financial information, even though the internet has given so much diversity to the conversation, I think sometimes personal finance advice was not necessarily geared towards women or people of color.

You have social media to fill in those gaps so that you recognize your experience in someone else's story. That being said, I would use it as a little morsel at a buffet. You don't get all the information from TikTok. You whet your appetite a little and you think, "Huh, I find that really fascinating. I'm going to find out more about, first time homebuyers," or whatever it is you heard about on TikTok. Then to seek professionals who can, be a sounding board who can give you very personalized advice, because it's called personal finance for a reason. your experience is different than other people's experience, and you want tailored advice.

Obviously getting recommendations from family and friends and looking up the reviews of this person and making sure that they have all the designations that they say they do. If they are a certified financial planner, that's a great designation. You should look up whether they do and have that designation. If they say they can get you insurance, they need to have a license to sell you insurance. These are the types of things you need to do when it comes to due diligence and finding someone and making sure that you interview at least three. I always try to talk to as many people as possible until I find the right people that I want on my team.

Erin: Excellent. That's great insight with all of the noise around us. Now research is out there that shows talking about money is a great way to build confidence, but sometimes it is hard to know where to start. Nobody wants to look like they're asking dumb questions or anything like that. We all have that bit of ego. Can you share, Melissa, some good examples about how talking about money can build confidence?

Melissa: I love dumb questions. I'm the queen of dumb questions.

Erin: Oh, good. You're with the right person. No, I'm kidding.

Melissa: No, you know what it is? I have built a career on asking questions, I'm sure as you have. It is a gateway. If you don't know something, the incredible confidence that you build by going on a journey to finding out that information is so special. I would encourage anyone, if you feel like, "Oh, I'm just not the best in blank." First of all, watch your language. You're just learning. You're on your way. You don't have to say that you're not the best at, say, I don't know enough about the stock market. Great. Okay.

That's an opportunity for you to find out more. There's so many fantastic tools out there that will support your journey. It is a journey. A little bit at a time. You don't eat the whole elephant at once. I don't know why I use that analogy. There's a book, a great financial book that talks about that idea. You sort of, little bit, tidbits. You jump over the small waves. You don't surf the giant one right away.

Erin: Okay. Talking about money in a way that's human too, I think many of us are intimidated when we go in to have the big discussions because we think that as you use the example of the stock market, it's going to be over our heads.

Melissa: If you encounter a wealth professional who uses a lot of jargon and who speaks over your head, they are not the right person for you. I have had, and I have worked with wealth professionals who even with me, with the knowledge that I have, try to use some words, I'm not sure what's happening there, if it's for their ego or they're just so eager for me to understand that they're just not doing the empathy piece where they see that my eyes are starting to glaze over, they're starting to lose me, then money is, as you said before, we were talking about how money is such a sensitive topic. People would rather talk about sex than talk about money.

If you're going to get a wealth professional on your side to talk about your life, your milestones, your life goals, you should be comfortable, and this person should want to check in with you. Sometimes we get advisors, we get a planner, and you don't see them or talk to them. No, they need to be keeping in touch with you, checking in to make sure that your goals are the same and you can ask them lots of questions.

Ask them things like, "Am I properly diversified in order to meet my goals?" Or let them know, "Hey, we've had some life changes, and that has changed what I want. My values have changed, so I want to spend money in a different way now, and I want to structure my money in a different way or talk about your fears. I'm really afraid of what will happen if I get sick, if I can't work anymore. Talk to them. These people are there to help you build the life that you want, and they get paid to do that. You want to make sure that you are maximizing their services.

Erin: Oh, and I have found that the best REALTORS®, those who have helped us through our toughest decisions have been de facto therapists, and it's just that empathy. Now that you mention it, I see that that's what that was.

Melissa: Yes. It's who you feel safe with to help you build this vision, right?

Erin: Yes. Now, I'm curious, Melissa, what are some of the common financial mistakes or misconceptions that you've seen from entrepreneurs and self-employed individuals?

Melissa: I am going to lean, Erin, on my own experience for this because my husband is self-employed, I'm self-employed, I'm from a family of entrepreneurs. My family ran, three generations of my family ran one of the oldest Chinese restaurants in Winnipeg, Manitoba, for 70 years.

Erin: What's the name in case anyone here grew up in Winnipeg?

Melissa: It was the Shanghai Restaurant in Chinatown. It was this beautiful place that helps all of us build a foundation on which we grew. However, one of the lessons that I saw there was my family members worked there tirelessly every weekend, every holiday they were there, and they were focused on a goal. They were focused on building generational wealth. Beautiful, beautiful mission. They were not taking care of themselves. They weren't paying themselves, for example. They'll say things like, "I'll pay myself someday," or they weren't paying into any retirement plan. They thought this is for the kids or the restaurant is what we'll retire on, but that was not the case.

When the restaurant finally closed down, you had staff and owners who perhaps didn't think about what their lives would look like after retirement. That piece is important. That connecting with your future self is important because I understand you wear every hat. You're the marketing director, you're the event planner for your business, and you're constantly running your business and so many else's lives as well as your own life. It's just family and friends.

Sometimes you do need to pause and make sure that you're taking care of yourself first. Sometimes you need to pause. Part of that taking care of yourself is the future and in the present. That means looking at the numbers. I have met many business owners who they run their business, they get involved in growth, but they don't take a pause to audit. They don't take a pause to think, "Okay, my confusing revenue with profit here, what's happening? What are the actual numbers here? Am I overestimating income? Am I underestimating expenses?" It's important for all of us personally and professionally to take stock every once in a while to see if we are spending in line with our values as well as our professional values.

Erin: You've talked about focusing on the work and the money and not what the money affords you. That's what one of the mistakes of your forebears was. I find that fascinating because there is in so many of us just a disconnect that if we spend on a vacation, if we take the family away now, well, what happens when the kids are grown and need to go to university and we want to pay the tuition? I guess coming around again, it comes back to having a financial advisor or somebody in your life who can give you the advice and say, "Look, this is this money, have that spending money," that spending account that you mentioned, Melissa.

Melissa: Everyone will have a different idea of how they want their money spent because everyone puts a value on different things. Money is just a tool. It doesn't mean anything. You use it. You allocate it accordingly. It's called value-based spending. If you name the top five values that you have in your life, and don't just say family and freedom, be very specific. Freedom means, retiring at 55, maybe for you. Family means having the freedom of time to spend with my husband, my kids, whatever, my wife or my partner, whatever it is that you decide.

Then looking, okay, you know what? I'm going to open my bank app, which I should have on the front page of my phone so that you can be mindful of spending and saving and investing and whatnot. You open that up and you look, you say, "Okay, let me look over the last month or two, all these purchases here, my surplus, did I spend it in any of these value categories? If not, can I make different choices?"

Erin: What about that money can't buy happiness, Melissa?

Melissa: Money, as I said in the beginning, I think money can buy happiness. It has a limit. It has a limit. I love this question because people often say, "Oh, you can't tell me what to buy because I like shoes." If that makes me happy, who are you to say? I think, sure, if that makes you happy, don't let anyone tell you that that doesn't make you happy. You decide, but that also means that your resources are finite. If you decide that shoes make you happy, that money has to come from somewhere else. You have to determine that is a valuable or worthwhile trade-off because it's always about trade-offs.

That's probably one of the very first things I'm teaching my children when it comes to personal finance. Everything involves a trade-off. When you say yes to something, you are saying no to something else. Science has given us many things that we can buy that will give us a maximum boost of joy. We don't have forever to talk about it, but I do want to make sure that I talk about three for your listeners. The first is experiences. When people spend on experiences, it bonds you to other people versus material goods, which are usually enjoyed alone. You've got the greater bang for your buck because you're talking about the experiences later.

You have memories, you have goodwill, you maybe have learned a skill, which basically expands the way you experience happiness. In a study of happy people, when they received a windfall of cash, they spent 40% of it on experiences. The second is the thing that we talked about earlier, which is other people. Worldwide surveys show that when you spend on other people, when you donate to charity, not only do you feel more satisfied with life, but you actually feel wealthier. It has a tremendous opportunity to give you purpose, but you have to be purposeful.

Sometimes we have, okay, well, this charity drive's coming to my door, or there's this Facebook drive going on, or a GoFundMe, and that's less intentional. Maybe saying, what, I have this amount of money to spend a year on charity. 50% of it is going to go to my charity of choice, which I believe is very, very in line with my passions and my values. 30% is going to go to my community. I'm going to save 20% for unplanned giving. That is going to be more empowering than this, "I'll give when I can, and maybe at the end of the year, I'll see over the holidays when I'm in the spirit." It's being intentional with it, and also combining experiences with giving to others.

One of my favorite things that we did in the last few years is during the pandemic, my son and some of our friends, everything was shut down. We were just outside and we filmed a dinosaur movie and held a virtual screening of this dinosaur movie. We charged everyone tickets and had an interview with the stars, the director afterwards, and all the money that we raised, we donated to a family in need. It was such a beautiful event for my family and friends, my community. I encourage everyone to think more about that. Number three is time savers. People who value time over money, they are happier, according to research. You can make yourself happier if you start to value time over money.

Yes, that may mean you don't take on an extra client this month, but you understand that there's a trade-off there. That might make you happier. You could also try to buy time back. For example, with all of the unpaid housework that a lot of women are saddled with, say, I think it was a per capita stats can said in 2019, it was, 820 unpaid hours of work. Maybe you want to, pay somebody, the kid down the street to mow the lawn or something to help you save some time. It can take a lot of forms.

Erin: I love that idea. Those three are just so salient, Melissa. This discussion has been amazing, so insightful, and we appreciate you spending time with us today. If you had to give our listeners and viewers one place to start on their financial awareness journey, what would it be?

Melissa: The first thing I would say is to look, maybe on a more macro level inward. To look at yourself, how are you spending money? What do you care about? What was it like for you growing up when it came to money? How does that affect how you think about it and how you operate with money today? Often money mainly grows on family trees. A lot of the things that your parents say, this is somehow becoming ingrained in you when it comes to finances. That's number one. Give your money some deeper thought. Why do I do the things that I do? Forget about what Melissa Leong said about the science, but what is it about my own story that drives my financial behavior?

Then second, this is more tangible. The first thing you can do when you want to look into money in general is to look into your own money. That is printing out your bank statements for the last three months. That's opening the app and looking and starting to categorize things. A lot of bank apps these days do the categories for you and actually look at where your money is going. Then you can decide if you want to cut here. Then you could decide, "Oh, I need to spend more money on the things that I really value."

Erin: We really value your time, your insight, and your wonderful presence here today. Thank you so much, Melissa, for joining us on REAL TIME.

Melissa: Thank you, Erin. It was a gift.

Erin: Oh, thanks. Money doesn't have to be a taboo topic. Melissa shared some great stories and insights about how we spend and why we spend. Hopefully, you now have some more tools in your toolkit to start your own path to financial confidence. As always, if you liked this episode, please tell us by giving us a rating or review on your preferred podcast platform. We always, always appreciate it. REAL TIME is brought to you by the Canadian Real Estate Association, CREA. Production is courtesy of Alphabet® Creative with tech support from Rob Whitehead. Thank you so much for watching and for listening. I'm Erin Davis, and we'll talk to you next time on REAL TIME.