Part 2 of the TED Radio Hour episode A Century Of Money.
Acquiring debt and buying on credit has been the American way since the 1920s. Financial advisor Tammy Lally describes the toll that consumerism and money-shame had on her family in the early 2000s.
About Tammy Lally
Lally holds a degree in Business and Finance Psychology from the University of Phoenix, and Financial Planning and Advising from The American College of Financial Services. She received her training and certification from The Money Coaching Institute in Northern California.
MANOUSH ZOMORODI, HOST:
It's the TED Radio Hour from NPR. I'm Manoush Zomorodi. And on the show today, a Century of Money. We heard about how buying on credit and making risky investments became the American way in the 1920s. Let's fast-forward now to an example of that legacy in this century, the housing bubble of the early 2000s, and a story about what happened to one family when that market began to go south.
TAMMY LALLY: We're living in a time where people can have everything that they want if they can make a payment. People get trapped in that.
ZOMORODI: This is Tammy Lally.
LALLY: And I am a money coach.
ZOMORODI: OK, but, Tammy, you weren't always a financial adviser, right? Like, before that you had your own financial issues. When you were growing up, what was the story around money?
LALLY: That it was scarce. I grew up with a single mom with three children - I was the youngest - in a predominantly Catholic town in 1975. I was the kid of a domestic worker. And I lived in a neighborhood that was an upper-class neighborhood - so doctors, lawyers - and I went to school with their children. So we didn't - my brothers and I really didn't know what we didn't have until we were told, you know, by the kids. And for...
LALLY: Yeah. But what happened to me then was that I internalized it to believe that there was something wrong with me. And the shame never went away.
(SOUNDBITE OF MUSIC)
LALLY: Money became a source of happiness. So I did become a high earner. I chose my career, you know, a sales career in my early 20s so that I could become a high earner. I was driving a Mercedes by the time I was 23, you know, had a very extensive wardrobe from Nordstrom. And I just covered up all the shame with materialism.
ZOMORODI: That was how Tammy dealt with her issues, with money, until everything changed in 2006. If you remember, there were some early warning signs of a massive housing bubble. For Tammy, those warning signs came in the form of a phone call from her brother.
LALLY: It was his 40th birthday, and he called me. And it was so interesting because I was like, hey, your birthday, you know, and, you know, let's get together. I'd like to take you out to dinner. And he was like, no, no, no, no, no. I'm not going to do that. And I said, well, what's up? And he said, I'm just really in dire straits. You know, I'm just really - and I was like, OK, OK. And I didn't know where the conversation was really going. And then he said, I need to borrow money. I need to borrow $7,500, which, you know, $7,500 is a lot of money. It was just a breaking point for him. And I said, well, I'm happy to lend you the money, but let's get together. I'd like to know what's really happening and see if I could help in some other way.
ZOMORODI: 'Cause you knew - he knew you were good with spreadsheets and budgeting and things like that.
LALLY: Yeah. And I had been in the mortgage business. And part of what was - he was saying to me was, you know, our mortgage is so high. And we've got this short-term ARM. You know, back then it was these two-year ARMs because his credit had dipped. And...
ZOMORODI: Which meant that the payments would skyrocket within a couple years.
LALLY: Right. And his credit score was low.
LALLY: So he didn't have a lot of choices because he couldn't keep up with payments, so he'd have late payments. And so I really wanted to get together with him. And so I did. Within a couple of weeks, I met him and his wife at a Starbucks, you know, close to where they lived. And it was a very long meeting. I mean, we were there four, five hours trying to, like, help them, you know, understand. I mean, they brought their credit report and their bank statements. And we're...
ZOMORODI: Oh, you were going through it...
ZOMORODI: ...With them...
ZOMORODI: ...Like, in the weeds.
LALLY: At Starbucks (laughter).
LALLY: Yeah. And I just didn't know what was really happening between them. But I - there was a lot of tension. They started blaming each other. And I just was kind of like, what's going on with you guys? Like, this is math.
(SOUNDBITE OF MUSIC)
LALLY: On paper, it was a math solution. Spend less, earn more. But there was no way that those two could have done that with their emotional, mental capacity - because we all hide from our family. So my energy got, like, buck up because you've got kids. And, you know, kind of wrapping up that meeting, you know, we left it off with he was going to take some action steps around looking for work that paid more. And she was going to, you know, start working more hours. And they were going to cut back. And it all seemed like it was a good - you know...
ZOMORODI: Yeah. You came up with a plan, it sounds like.
LALLY: Right. And that was - turns out to be the last time I saw him.
ZOMORODI: Tammy continues her story from the TED stage.
(SOUNDBITE OF TED TALK)
LALLY: Two months went by when I received a call. Tam, I have bad news. Keith committed suicide last night. Days later at his home, I went looking for answers. In his office, the garage. There I found a stack of overdue credit card bills and a foreclosure notice served to him on the day that he died (crying). My brother left behind his beautiful 10-year-old daughter, his brilliant 18-year-old son, weeks before his high school graduation, and his wife of 20 years. How did this happen? My brother was caught in our family's money shame cycle, and he was far from alone in this. Suicide rates among adults ages 40 to 64 have risen nearly 40% since 1999. Job loss, bankruptcy and foreclosures were present in nearly 40% of the deaths, with white, middle-aged men accounting for 7 out of 10 suicides.
You know, those are the things that just break you. This was about money. I knew it was. I knew it was about shame. And, you know, just...
ZOMORODI: We are so grateful that you are sharing this very personal story, though, because I do think people learn and listen and understand that they are not alone with their money struggles, that when you're talking about money, you're talking about so much more.
LALLY: You are. I mean, you're talking about mental health. You're talking about emotional maturity. You're talking about addiction. You're talking about trauma. So many of us have so many hard life experiences and have mental health issues that go, you know, unexamined and unspoken about. And in hindsight, my brother had mental health issues.
ZOMORODI: If we want to sort of break this link that we have between self-worth and money, how do we even begin to do that when it is so embedded in society, in the way we live, in our families, in our culture?
LALLY: It starts with ourselves. We each have to do our own level of self-inquiry, our own level of work around money. If we examine our beliefs, we examine our behaviors, we examine our reactions, we look for more of a spiritual solution versus a material solution, that's how we change things, is by each person taking money on. And stop avoiding it. Stop pretending like it's not the biggest thing you think about. I hear that from a lot of people. Well, I don't care about money. Oh, yes, you do (laughter). Everybody cares about money. We live in a society where you have to have it. So we might as well learn how to get along with it.
ZOMORODI: That's Tammy Lally. She's a financial adviser, and you can see her full talk at ted.com. Transcript provided by NPR, Copyright NPR.