Successful Supervisor 47 – Coaching People on Money Problems

October 8, 2017

I am not aware of any individual who has not had money problems at some point in life. One question I ask in all my seminars is, “Show of hands, how many people in this room are making too much money?” I have never had a hand go up.

I do include the tips in this article in my leadership training course, not so much for the people in the classes, but to help those people advise their workers and their children.

We Know the Rules but Many People Ignore Them

We all know the rules for fiscal wellness and security, and we know for sure the things to avoid doing.

The problem is that once people get to a certain point by ignoring the rules, then life can become unbearable to the point where some people resort to socially unacceptable behavior or even suicide.

The wise supervisor helps people avoid falling into the inevitable traps.

In general, one’s fiscal responsibility is built upon the values that were programmed in at an early age. However, two children from the same family can have very different fiscal values.

We all have values, although many people cannot articulate them. As a starting point for a supervisor, it really helps if you encourage people to clarify and document their values with respect to money. That forms a solid foundation for dialog.

In addition, it is important to select a life partner based on the mutual understanding of values. Most people select a partner and create a life together, which includes raising children, in the majority of cases.

Knowing and stating your fiscal values is a critical element in good parenting.

Below is a list of things to do or avoid to have a good chance at a strong financial position when you retire and beyond. You will recognize them all, but ask yourself seriously whether you or some of your workers are making these mistakes.

1. Credit cards

This is the granddaddy of all financial problems, yet the rule is quite simple. Always pay off the full balance on each credit card in the month it is due.

When you yield to the temptation to buy things on time, it becomes like a giant sucking force that takes you to fiscal ruin in most cases. Once you are caught in the vortex, it is nearly impossible to extricate yourself.

I finally got that message across to one young person when I pointed to a large flat panel television. I said, “I can buy that TV for $150, but if you buy it and pay the minimum each month, it is going to cost you over $400. I don’t know what kind of job you have, but if you need to pay over twice as much for the things you buy, you will always be forced to do without.”

In the age of instant gratification, it is very hard to have the discipline to postpone a purchase until you can afford it. So many people get sucked in, and it is many times more of a challenge to dig out than it is to just wait till you can afford to pay for the item.

As a supervisor, you need to help all people understand the logic of this truth. I also advise that you not offer to help bail out those who are in credit card debt, because their quicksand will immediately start grabbing at your own ankles.

2. Save at least 10% of EVERY paycheck

If you simply keep the discipline to put away 10% of your earnings, eventually you will become rich. Here is the trick to this. Kiss that money goodbye and don’t ever touch it until you are a wealthy person. Some people call this philosophy “pay yourself first.” The cumulative effect of saving even small amounts of money religiously over several decades is the engine that can create generational wealth.

The challenge is getting over the mental hurdle of making $X each payday but only being able to use $.9X. It is a mental exercise. Because we all have money withheld automatically for taxes and Social Security, it is possible to put an additional 10% out of reach, but it takes fortitude to do it.

3. Participate in the 401K plan to the maximum

When you have access to a 401K Plan at work, it is like the government is paying you to save. Of course, you do not get the money up front, but the deferred taxes add up over the long haul. If you have the fortitude to invest in your own future by using this mechanism, it significantly enhances your “nest egg” because you are using pre-tax dollars to build up your assets.

If you do not have a 401K plan at work, start an IRA and put the maximum in that each year.

4. Diversify your financial portfolio

You were probably taught by your parents to “never put all your eggs in one basket.” It is intuitively obvious that diversifying your investments lowers the risk factors associated with different kinds of investments.

It is important to constantly scan your portfolio asking the question of whether you are in the best position for current conditions.

Making small changes frequently to the blend of investments is better than making mega changes hoping to catch a whopper of a deal.

Most people are not skilled enough and do not have the time to figure out the best blend of investments for any point in time, which leads to the next tip.

5. Get a trusted advisor

You must be very careful who you select as a partner with your investments. Many people trusted Bernie Madoff with their investments and lost everything. Another old adage comes into play here: “If something looks too good to be true, it probably is.” Look for a firm that has a long history and an agent with whom you can talk with openly and that you trust completely. Beware of hucksters that promise unusually high returns with low risk.

Look for an individual who will probe deeply into your financial profile and risk tolerance and set up a system that is made just for you. Monitor all transactions and discuss the logic with your agent often.

Some Philosophical Ideas

Keeping out of financial trouble is possible if you follow the rules above, but there are also some thinking patterns that can help keep you fiscally strong.

1. Act and think like you are poor, and you will become rich

This idea is just a different mindset. You know that you have enough money to buy a fancy boat, and yet you don’t buy one because you are pretending you cannot afford it.

There are thousands of temptations in life, and if you yield to them you will drain your resources down quickly. You do not have to starve yourself of all indulgences to the point that you live like a monk, but it is important to never touch your “nest egg for the future.” Spend on the things that are important to you and let the trivial or tempting go.

2. Own your dwelling as soon as possible

Paying rent to have a roof over your head is necessary at some points in your life, but you should not make it a long term philosophy. In the final analysis, it is usually better to own than to rent your abode.

There are many different life and financial circumstances in which renting can be the better option, especially if the living situation is short term. The rule to own your home whenever possible needs to be tempered with the specific situation, and a good financial advisor can be helpful for specific advice.

Paying for a mortgage so you eventually own your home “feels” the same as paying rent, but there is a huge difference. In the former case you are building up equity, so eventually you have something to show for the monthly payments instead of a bunch of cancelled rent checks.

My father taught me to think of it this way. When you are paying rent, you take money out of your pocket and put it into the pocket of the landlord. When you pay a mortgage payment for a house, you take money out of your pocket, but actually put some of it back into another one of your own pockets.

3. Think about family size

There are no right or wrong answers to how many children to have. Each couple will decide for themselves, but do recognize that it is expensive to have kids. If you add up the cost of having a child these days, it is estimated that before that child is out on his or her own, the out-of-pocket cost to you will be over $250,000 BEFORE you add in the cost of a college education.

4. Don’t pay extra for frills you don’t need

Some people buy the top-of-the-line model of everything. For example, they will buy the high end washing machine for $1200 even though the standard version for $700 will be perfectly adequate to clean their clothes.

Recognize there is a hefty premium price at the high end of any product line. This is because the manufacturer knows some people will pay an exorbitant price to get the best there is, so they make those people shoulder a huge markup.

Use Common Sense and Discipline

Using simple common sense and having the discipline to postpone or skip some purchases that would be nice to have are the best approaches to financial security.

You probably already knew everything in this article, but some of your employees or perhaps your adult offspring have not fully understood the significance of these concepts.

Do them a big favor and print out this article for them to read. It may help them live a more comfortable life, and perhaps even have some money to pass on to future generations.

This is a part in a series of articles on “Successful Supervision.” The entire series can be viewed on or on this blog.

Bob Whipple, MBA, CPLP, is a consultant, trainer, speaker, and author in the areas of leadership and trust. He is the author of four books: 1.The Trust Factor: Advanced Leadership for Professionals (2003), 2. Understanding E-Body Language: Building Trust Online (2006), 3. Leading with Trust is Like Sailing Downwind (2009), and 4. Trust in Transition: Navigating Organizational Change (2014). In addition, he has authored over 500 articles and videos on various topics in leadership and trust. Bob has many years as a senior executive with a Fortune 500 Company and with non-profit organizations. For more information, or to bring Bob in to speak at your next event, contact him at, or 585.392.7763

13 Keys to Reduce Turnover

April 4, 2010

The problem of employee turnover is a conundrum for any organization. One would think that during times of high unemployment, the turnover rate in most organizations would be at an all-time low. The reality is far from that. While there is a lot of variability from one industry to another, if you take all industries together, the total turnover rate in 2009 was a whopping 15%.

We know the cost of employee turnover is more than the annual salary of the individual lost. In fact, most estimates place the total replacement cost at roughly 150% of the employee’s salary. A quick calculation shows that for a company with 1000 people who have an average annual salary of $50,000, the annual cost for employee turnover adds up to over $10 million. These costs go directly to the bottom line.

Reducing employee turnover is not rocket science; however, many companies struggle with very high turnover year after year. The common denominator of high turnover in organizations is poor leadership. Therefore, organizations that stress leadership development have an inherent advantage that can mean the difference between survival and extinction.

Let’s examine several ways an organization can drastically reduce the level of turnover at very low cost.

1. Develop People – Organizations that focus on employee development enjoy higher employee satisfaction, which leads to lower turnover. If each employee has a concrete development plan that is reviewed at least annually and contains a variety of growth opportunities, the employee will have little reason to look for greener pastures elsewhere.

2. Recognize Good Performance – Reinforcing people for doing good work lets them know they are appreciated. Tangible and intangible rewards are a great way to show management appreciation for workers who excel. This improves morale if done well. However, understand that reinforcement can be a minefield if it is not handled properly. Make sure employees receive sincere appreciation by management on a continuing basis.

3. Build Trust – By extending trust to employees, leaders demonstrate their willingness to support them. This pays off in terms of higher trust on the part of employees toward the organization. There is a whole science on how to build trust. By creating a real environment, more trust in an organization will lead to lower turnover.

4. Reduce Boredom – Employees who are underutilized, tend to get bored and restless. If there is a vacuum of activity, people often get into mischief. It is important for managers to craft job duties and responsibilities such that people are actively engaged in the work every day.

5. Communicate More – In nearly every corporate survey on employee satisfaction, the issue of communication surfaces as either the number one or number two complaint. Communication needs to be ubiquitous and consistent. It is not enough to have a monthly corporate news letter or an occasional town hall meeting. Communication needs to take many different forms and be a constant priority for all levels of management.

6. Cross Train – Employees, who have been trained on several different jobs recognize they are of higher value to the organization and tend to be less inclined to leave. Along with the pleasure of having more variety of work, employees appreciate the ability to take on additional skills. Having good bench strength allows the organization to function well, even during times of high vacation or illness.

7. Don’t Overtax – During lean economic times, companies have a need to stretch resources as much as possible. Many organizations exceed the elastic limit of what employees can be expected to maintain long term. This leads to burnout and people leaving for health reasons or just plain quitting in disgust over the abuse. It is important for management to assess carefully how far resources can be stretched, because going beyond the elastic limit guarantees a high level of employee turnover. I believe this rule is habitually violated in many organizations, and they pay for it big time. Stretching people too far is a false economy. If you organization is guilty of this, print out this article and put it on the bulletin board.

8. Keep It Light – When managers apply constant pressure to squeeze out the last drop of productivity, they often go over the line, and it becomes counter productive. If leaders grind people down to a stump with constant pressure for perfection and ever higher productivity, the quality of work life suffers. Employees can tolerate a certain amount of this for some time, but eventually they will break down. It is smart to set very high goals, but very important to have employees believe the stretch goals are attainable. One good way to provide this assurance is to have the employees themselves participate in setting the goals. The best companies find ways to work in a little fun somewhere, even (and especially) in high pressure situations.

9. Feedback Performance – there needs to be a constant flow of information on how all employees are doing in each area of the organization. People who are kept in the dark about their performance become disillusioned and cranky. The simple kindness of letting people know how they are doing on a daily or weekly basis pays off in terms of lower turnover.

10. Train Leaders – All levels of management and supervision need to be highly proficient at creating an environment where the culture is upbeat, positive, and has high trust. This does not happen by accident, or simply by desire. It takes work and lots of emphasis by senior leadership to make sure that there are no weak links in the management chain. In most organizations there is a dud of a manager somewhere between the well intentioned and talented top brass and the worker bees. The result is that great objectives, ideals, and processes are morphed into oblivion by the time they reach the shop floor. The antidote is to improve leadership effectiveness at all levels and remove any dud who is incapable of changing.

11. Hire Right – Putting the right people into the organization at all times is extremely important. One bad apple can really do a lot of damage. Focus on the selection process with some behavioral attitude surveys and make sure you do your homework with previous references.

12. Create Ownership – When people are actually part owners of the enterprise, they have a lot more stake in sticking around. This can be done in hundreds of ways from stock options to including employees in strategy sessions.  Always seek to let people have a real stake in the action. It pays off.

13. Empower People – Actually the correct way to word this is create an environment where people are happy to engage their power for the benefit of the organization.

These are 13 ways in which leaders can lower the level of turnover in any organization. The magic here is not any new discovery; but the consistent application of these principles will make a huge difference in any organization. The good news is that the items mentioned above are not very expensive. They are all common sense – too bad they are often not common practice.

If you study the best companies to work for worldwide, you will discover they have a much lower turnover rate than the average numbers. I believe having the kind of culture where employees are locked in with no desire to leave for any reason is a sustainable competitive advantage. It is easy to achieve if you follow the 10 rules listed above.