In this section I need to back up a little. Something we learned in the 7 Habits seminar was that private victory must come before public victory, which actually comes between parts 3 and 4, but for my purposes here fits between 4 and 5. The meaning behind private victory BEFORE public victory is that you cannot help others change if you cannot change yourself. So, in terms of finance, it doesn’t do us any good to try and teach someone about their financial matters unless we are willing to make some changes ourselves.

To illustrate this point, allow me to tell you a story.

Not long ago, there was a six-year-old boy living in the same Indian community as Gandhi. This boy had a very strong sweet tooth and simply couldn’t resist sugar. But, because he was diabetic, the sugar created painful boils all over his body.

His parents took him to the doctor, who said that he must avoid sweets; otherwise, the problem would not go away. The parents nagged the boy every day to stop eating sugar, but this was a challenge the boy seemed unwilling to overcome.

In desperation, the boy’s mother went to Gandhi and asked if he could please convince her boy not to eat sweets. Gandhi said, “Come back in 15 days and I’ll speak to him then.” So the mother came back after 15 days and Gandhi took the boy to the side and spoke to him for several minutes. The boy went home and immediately gave up sweets.

The mother was confused. She asked Gandhi later, “Why did you ask us to come back after 15 days? And what miracle did you perform to get my son to quit eating sweets?”

Gandhi replied that it wasn’t a miracle. He said, “When your boy first came to me, I too had been eating sugar.” He had told the boy that he couldn’t ask him to do something he, Gandhi, wasn’t willing to do himself.

Habit # 5 – Seek First to Understand, Then to Be Understood or The Habit of Mutual Understanding

Listen, or your tongue will make you deaf.

- Native American Proverb

When a friend or family member comes to you with a financial problem – or any problem, really – what do you do? You listen…and then offer advice, whether it’s solicited or not. It’s ok, we all pretty much do the same thing. But, it’s an ineffective paradigm to listen with the intent to reply. Instead, we need to listen with the intent to understand. When listening to our friends and family speak, we’re not really listening because we’re already thinking of our response. What we perceive to be the problem may not be at all. Or, perhaps the friend just wanted to vent, they didn’t really want advice from us at all. We’ve all been in those situations and we’ve all done it.

To communicate effectively, we must first understand each other. In order to help your friend or family member with their situation, you must listen to ALL of the story and not think about an answer until one is asked of you.

As it was put to us in the seminar, most of us don’t take the proper time to diagnose the problem before we prescribe solutions. For instance, let’s say a friend came to you and began venting about their financial situation. He says to you that he’s short on money and he doesn’t know what to do. Before he can even begin to explain things, you jump to the conclusion that he’s overextended himself and launch into a solution that may have nothing to do with the real reason he came to you in the first place. You immediately assumed that you understood the condition – having been there yourself, of course – and quickly offered your own advice.

One of the biggest challenges in interpersonal communication is responding autobiographically, meaning from our own frame of reference. Believe me, we all do this, even us personal finance bloggers (sorry guys!). We advise, interpret, and evaluate other people’s messages and responses based on our own experiences and motives. The impact of doing this at inappropriate times is that the speaker becomes frustrated and closed off.

In terms of finances, this habit is really about helping other people – we all know the best way to learn something is by teaching it. We’re not perfect. We don’t have all the right answers. But, by sharing our knowledge with others we can learn what areas we need improvement in and we can possibly help someone else along the way. While that’s all well and good, we have to be willing to listen to the other person if we’re going to help them, which is why we needed to improve ourselves first – the personal victory before the private victory.

So, how do you know when you’re responding autobiographically? Well, if you’ve interrupted someone as they’re talking, that’s usually your first clue. But, there are some phrases to keep an eye out for.

I don’t understand – help me understand…

So, what you’re saying is…

Let me share with you…

Why do you…

First of all, all of these phrases put an emphasis on the person speaking them. If you’re listening to someone, it’s not about you. If your college kid calls home and explains he’s maxed out the credit card, your first instinct is probably to get mad. Now you’re wondering where you’re going to get the money to pay the bill and how could he be so irresponsible. But, you’ve just missed most of what he said.

The problem isn’t the maxed out credit card. He probably didn’t do it to be spiteful. There’s something else going on and by responding to him in an autobiographical fashion, you’re not going to find out how you can help him. You need to listen empathically. What this means is that you seek to understand. You repeat what a person says or feels back in your own words, i.e. You feel_________ about ___________.

Here are some phrases to get you started:

As I get it, you feel…

So as you see it…

You sound…

You seem…

When empathically listening to others, you should:

- focus on the speaker and not your “correct” response to them.

- just repeat what the speaker says…if you’re sincerely trying to understand, you won’t be perceived as being demeaning or manipulative.

- not be afraid of silence as sometimes just listening and saying nothing is the best way to get to the heart of an issue.

Ok, back to our scenario with your college son. So he calls home to tell you that the credit card’s maxed out. On the autobiographical side, your sharp responses make you seem unapproachable, so what does your son do? He shuts down and becomes defensive. Whatever the initial problem was is no longer open for discussion because he doesn’t trust that you won’t blow up at him.

Instead of assuming the worst and blatantly accusing him of irresponsibility, listen empathically. When he explains that the credit card is maxed out, acknowledge that you’ve heard him and stay silent. Let him talk. He may be having problems in school, in life, or he simply may not know how to be financially responsible and is coming to you for help.

By empathically listening to the problems of those you mentor or assist in their financial matters, you will help them more by allowing them to find their own solutions. This can also benefit you because they may come up with ideas that you didn’t even think of. I’m amazed all the time by what people come up with, and I’ve been doing this for six years.

Recap

In order to be successful, we have to work on our personal victories first. That means we must understand that our financial lives are the way they are because of choices we’ve made. We must understand that in order to change the choices we’ve already made, we must plan a course of action and visualize our success. We also have to understand what’s most important in our lives and goals, and plan accordingly. Finally, we have to be on the same page as those whom we share our finances with.

Once these four habits and ideas come together, you have achieved your personal victory and are well on your way to financial success. Sometimes we fall behind and that’s ok. As long as you’re working towards your success, you’ll get there. Some days by leaps and bounds, while other days it will be by baby steps.

Habit 5 – Seek First to Understand, Then to Be Understood or the Habit of Mutual Understanding is the first habit in the realm of public victory. By sharing your knowledge with others, it allows you to continue learning and growing and can even open up new ideas. But, this habit also cautions against prescribing before properly diagnosing. That is, ensure that you fully understand the situation before offering advice, and be sure that advice is actually wanted.

When we’re talking about helping others with their financial issues, we have to be willing to make the same changes – or at least, have done them before offering the advice. If you’ve never been in debt up to your eyeballs, how can you empathize with someone who is there now? It’s hard to do. It’s hard to give advice on how to stop constantly struggling if you’ve never been there. And, likewise, your unwanted advice will ring hollow. On the same token, just because we’re in a similar boat doesn’t necessarily mean it’s the same one. Let the person explain their situation and ask for your advice BEFORE you start offering it. Sometimes a little silence can go a long way to solving problems and they may have only needed someone to listen.

I went to the bank recently and made a deposit for my parents. I had noticed a fee on the account and asked about it when I went in. Without looking anything up the teller rattled off their policy of minimum balances and in order to generate the charge, we must have fallen below. Had she been quiet, I would have told her I was asking about an ATM fee that was assessed when no one had used the ATM cards in some time. Her response was an embarrassed, “Oh.” After she finally understood what the problem was, we were able to fix it, but her assumptions only slowed down the process.

Have you been in a situation where all you wanted was someone to listen to you – not speak, offer advice, or judge you?  Just listen?

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Related posts:

1. 7 Habits to Financial Success… Part VII
2. The Seven Habits to Financial Success – Part IV
3. The Seven Habits to Financial Success – Part II
4. 7 Habits of Financial Success…Part VI
5. The Seven Habits to Financial Success – Part III