An interview with Bruce Bickel, a senior vice president of PNC Wealth Management in Pittsburgh, on how to survive the economic times.
 The Depression and World War II generations are about extinct. Since then, the USA has not known much about hardship or sacrifice, even with the 9-11 jolt. Can the baby boomers on down, who've lived with a sense of entitlement all their lives, adjust to hard times?
BB: It is not a question of "can they adjust" but how quickly will they adjust. The true test of the character of the "boomers on down" will not be what they achieved financially but how quickly they get up from having been knocked down by the economy. For some, this will be difficult. It will require that they think differently and therefore act differently. It will be critical that they begin to understand the difference between their needs, wants and desires and to begin to live within their means by providing for basic needs, not wants or desires. Wants and desires will require more planning rather than compulsive spending. Planning will be a necessity to weather this storm in order to learn not to live on credit and become debt free.
You've said that people need to distinguish between "what is important and what is urgent" in budgeting and spending. You also advise not to compare what you have vs. others, as there will always be others who have more. Can you elaborate on those points?
BB: Setting priorities will greatly enhance one's effectiveness in managing their money in troubled times. There are two ways of setting priorities: according to urgency or according to importance. Most people set priorities according to urgency, which is why they spend so much time putting out fires or managing problems or responding to the priorities of other people. The important must be done immediately and are the highest priority as they take precedence over everything else. They might include providing for basic needs of food, clothing and shelter, medical coverage, debt reduction, educational expenses, saving, etc. We cannot protect "the important" unless we master the most effective time-saving, money-saving technique ever developed ... the decision to say NO. We must learn to decline, graciously but firmly, every request that does not contribute to "the important."
The cancer of comparison must be treated. Comparison lead to two things ... neither one of which is good for us. We will always find someone who has more than we do; a better job, more pay, a classier car, better clothes, etc. That will produce discouragement and often times is dealt with by going shopping "because it makes me feel better." Conversely, we will always find someone who has less than we do: a menial job, less pay, a second-hand car, poorer quality clothes, etc. That will produce pride and often affirms spending habits outside our means because of an overinflated sense of worth based upon possessions. Neither pride nor discouragement is helpful.
You emphasize the "Five Golden Rules of Meaningful Money Management" ... which are Earning, Giving, Saving, Budgeting and Spending. How do you apply those rules, especially with families?
BB: The Five Golden Rules of Money Management is an excellent way to teach families and their children respect and responsibility. It can be introduced as early as first grade. If a child can learn to read and write, he or she can learn the basics of responsible money management that will prepare him or her for life. Earning, giving, saving, budgeting and spending are a responsibility, not a right. In this process of maturation, children will learn at an early age the difference between needs, wants and desires. As parents, our responsibility is to provide for their needs, not their wants. Teaching children to "earn" for things they want or to "save" for something they really desire is paramount for their future. "Budgeting" their allowance and teaching them why and where to "give" and how to and how not to "spend" will set a foundation of meaningful money management for their latter years when potential affluence can be a burden rather than a blessing.
Are there any other suggestions you'd like to make about surviving psychologically and financially during these tough times?
BB: We must transform the way we think and not spend based upon emotion but rather upon correct thinking. Managing money on feelings will create habits, generally bad one. Managing one's assets based upon proper thinking will produce discipline and that is the best cure for indebtedness.
Are you optimistic or pessimistic about the economic direction of this country ... both in what the federal government is doing and what's happening in the private sector?
BB: Generally speaking, I am optimistic. Hopefully, as a nation we will swing the pendulum back to a more moderate mindset of spending to combat the American disease of greed.
Mr. Bickel is a graduate of the Naval Academy, where he played quarterback ... first behind the legendary Roger Staubach, then as a starter his senior year. He became vice-president of the Fellowship of Christian Athletes and earned a Ph.D. in theology from Luther Rice Seminary. He is an ordained Baptist minister. Bickel manages 24 private family foundations around the nation and a corporate foundation for the natural gas company Equitable Resources.
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