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Our brains are not wired to save and the people who want us to spend our money know this. Don't believe me? Think of the shows you watch in a week. Whether you are doing it old school TV programming style or using a streaming service. How many of those shows encouraged you to save money? How about the commercials or ads that you were exposed to. How many of those encouraged saving? Let's expand it a little. How about the last two weeks? Three? Month? Now let's think of social media. Thinking over your timeline or recommended videos, how would you compare the messages to save versus the messages you received to spend on some hot new item? The closest thing my medias have come to is that I get to save 50% off of what I wasn't even planning on spending in the first place. We have to do something different with our wiring. As we saw last article, it takes more than optimism to effect change. We all have to go through a series of psychological and emotional stages before we can implement any change in our life. This is why just telling somebody to save money is not a workable solution.
Envision Coaching and Consulting LLC and EnvisionCo Blog are a wellness-oriented platform. It's what we push here. It's what we promote here. Stress kills. Which is why our articles and coaching services revolve around stress management. As revealed in our previous article, a staggering 90% of Americans grapple with some form of financial strain or stress. This is why this first month of the calendar new year, we have been stressing minding our finances. As we continue our journey into the waters of personal finance, I think it is important that we explore one of the fundamental components of facilitating financial health our money scripts.
We would think that personal finance is a numbers game. Yet, in a world where finances are often entwined with stress and uncertainty, understanding the narratives we carry about money becomes a compass for steering our financial course. After all, we cannot effectively move through change stages if we do not understand our behaviors around money and the unconscious beliefs that support our behaviors. These are our money scripts. Most of us formed our money scripts in early childhood through both direct and indirect messages we received about money from all of the significant people in our lives, our neighborhoods, our society as a whole. Over time, these internalized messages formed and became part of our worldview. These beliefs were developed for our survival and protection which is why it makes us resistant to any sort of change because of the strong emotions we attach to our money beliefs.
Common Money Scripts
For many of us, our unconscious money scripts drive our current behaviors. These messages were handed to us early in life and even passed down from generation to generation. These scripts did not come from any one place. Our parents, aunts and uncles, grandparents, teachers, clergy, neighbors, media were all delivering to us messages about money. Some of these money scripts were overt or spoken directly to us as we grew.
It's more important to give than it is to receive. So, we should give to others who are less fortunate.
Money is the root of all evil.
You had better take care of yourself first, because nobody else is going to.
There is never enough money.
More money, more problems.
You are lucky to have something to eat and a place to sleep. Think of all the starving kids in the world.
It's easier for a camel to go through the eye of a needle, than for a rich person to go to heaven.
If you are a good person and do what's right, the money will take care of itself.
Money is not important.
Money makes the world go round.
There are also those more subtle, covert money scripts that we internalized by watching other people, seeing how the rich or even poor people are portrayed in media, watching documentaries or podcasts about rich and successful people, or reading in books and magazines about influential successful people. Afterall, magazines likes Forbes do not print the profiles of the 500 poorest people now do they? Closer to home, those covert scripts could come at the hands of watching wealthier classmates and how they are envied, admired; how they have a sense of superiority over others. Or the discussions or arguments children overhear about money. Observational learning is how we have survived as a species; this rule is just as applicable to money.
Money Scripts, Rarely Placed Under the Microscope
Because we are not even conscious of our money scripts, they often go unnoticed, and we do not really examine them closely. And for a time, they may work for us. The poor saving, uncontrolled spending may not catch us immediately. We are the envy of the neighborhood because we seem to have it all. Blindly following our money scripts have consequences. Unfortunately, when we build our financial house on questionable foundation, trouble will surely follow. Just like any house, building, or structure built on shaky foundation, chronic problems begin to rise and things can even begin to fall apart. We blame the economy. We blame inflation. We blame our depression. We blame the stock market. Yet we keep following those scripts. We keep waiting for the turnaround that never comes because we missed the fact that our deepest held money beliefs may be the problem.
Changing the behavior behind money scripts can only be accomplished when we are motivated, ready, and willing to explore other perspectives. But when there is an emotional attachment, especially one formed after a traumatic event, information alone will not cut it. I knew this when I first published both "New Year, New Wallet" and "The 52-Week Money Challenge: Your Pathway to New Year, New Wallet." Many of us have money struggles related to money traumas- things that happened to us or the things that were not done for us. Regardless of the intent. Personal story time about a messaging exchange with a close friend about a Kevonstage Tiktok.
After watching the TikTok my friend had sent, the words that stuck out to me were abject poverty. I shared with him how my goal in life was to live better than I came up. Pizza Hut was not a common occurrence in my house. It was, like mentioned in the TikTok, a tax time endeavor. I was a very oppositional defiant child growing up and did not like being told what to do so that definitely was a barrier to forcing me to read (even though I liked reading). But I liked pizza. I would have done it for pizza right? Well, the truth is, I knew that gas money was limited. We lived in a rural part of Alabama and the nearest Pizza Hut was a 19-mile drive one way. Funds for gas would have been an issue. Also, my mother would not have driven all that way to get me a pizza and not get my younger brother anything. In my mind, there was no point in participating. There are much worse stories out there than this. Kids who lost their homes and were homeless. I share this to say that all of this came up for me, just based on a Kevonstage Tiktok video. These memories informed who I grew to be and how I grew to view money, whether I was consciously aware of it or not. How much more so with people out there which much more dark money histories? So no. Information alone would not be enough. Money scripts are often formed with strong emotional bonds so just having the knowledge, just knowing better is not enough.
Financial Comfort Zone
There is so much to be said here. Often we as humans have a natural tendency to reinforce our habits and avoid any experiences or situations that may challenge our beliefs. Money scripts that have been practiced and worked in some situations, tends to strengthen our belief that they will work in all situations. We get comfortable here. Add in the fact that money scripts are passed down from one generation to the next and if it was good enough or worked for our fore parents, we don't give it another look. When we become comfortable within these boundaries, we don't often do much to shake the turnip cart. A person may not like being poor, but they learn ways to survive within that system. But look at what happens when they experience a financial windfall such as winning a major lawsuit, winning the lottery, or fame.
Economist Jay L. Zagorsky agrees with the research. He writes for U.S. News and World Report: “Studies found that instead of getting people out of financial trouble, winning the lottery got people into more trouble, since bankruptcy rates soared for lottery winners three to five years after winning.” (CNBC, 2017)
Richardson on finding out his family and friends spent $1.6 million of his money in 10 months: "I finally just looked at my bank statement, and I was just like, 'Where did this come from? Where did that come from?' And my guy was sitting there telling me, 'Man, we was telling you.' I know he was telling me, but that's just like telling a kid to stop running in the hall. They're going to still do it when you turn your back or you leave. It's just one of them moments to where I was just blinded by my heart, by loving everybody and thinking that everyone was for me. I know they love me. I know they do care. But at the time, they took advantage of me." (CBS Sports, 2016)
These are but a few examples. But the message should be clear. More money does not solve money problems. When persons hit the jackpot in this way, it actually forces them outside of their financial comfort zone. They do not have the knowledge or skills to deal with their increased economic status. They do not understand nor have they processed their own unconscious beliefs about money.
Why Save Then?
It kind of feels like I've backed myself into a corner a little bit. I spend the first two articles of the year convincing you to save and then the next two telling why it may not work. Yikes! But there is a method to the madness. Transparency. The truth is you need to start saving like three yesterdays ago. But it is also true that you are going to have roadblocks, barriers, and obstacles. The most important is your own psychology. I didn't feel it fair to you my dear reader to leave out this huge piece of the financial puzzle. I wanted you to have this information so that when and if the setback occurs, you aren't too hard on yourself.
The reality is there is no way to just to change the pain of saving, especially in the beginning. There is a psychology that we have to overcome, our readiness and our beliefs. You have to know your why. Why are you joining the 52-Week Money Challenge? What is your end goal? The more you can envision your why to saving, the more saving you are going to do. I can give you a lecture. I can break down all the statistics through graphs and pie charts. I can even develop a savings plan for you. None of that will mean anything until you know your why. Until you can envision your why. Our brain responds to vision. The clearer your image, the more likely you are to act.
Mindfulness & Your Wallet
We have talked about mindfulness a few times before here at EnvisionCo Blog. Mindfulness is a practice of awareness and being rather than doing. A sort of paying attention on purpose in a particular way to the present moment non-judgmentally. The mind is powerful. When we pause and take a closer look, we can see how our mind guides us. When we bring our unconscious to the conscious we can then begin to penetrate our mistaken beliefs and harmful actions.
Mindful money management is an approach to personal finance that involves bringing conscious awareness and intentionality to your financial decisions and behaviors. It incorporates principles of mindfulness, which is a practice of being fully present and engaged in the current moment without judgment. When applied to money management, mindfulness can help us develop a healthier and more balanced relationship with our finances. With mindful money management, we become more aware of each dollar coming in and each dollar going out without dwelling on mistakes. This new awareness and nonjudgmental attitude will set the stage for reducing stress and allowing more room for rational decision-making when it comes to our finances.
Personal finance is more than just a numbers game. It requires that we go beyond the balance sheet or savings plan. Personal finance requires that we understand the intersection of money and psychology. How we cannot make a money change until we are ready and we cannot be ready for a money change until we have acknowledged our emotional attachments to money scripts. Recognizing the comprehensive nature of personal finance helps us to adopt a more mindful and intentional perspective. But as we have admonished before. Wherever you are on this wellness journey, do not worry about getting it perfect; just get it going. Until next time. Happy reading!
DISCLAIMER: Affiliate link to follow. Not to be outdone, Ally Bank has entered the chat. On January 11, 2024, Ally Bank sent an email to me alerting me of their new referral program. From now until 3/1/2024 I am able to invite friends and family who do not have an account with Ally Bank to join the ranks. As of the typing of this article, Ally's Savings rate is currently at 4.35% APY. To be eligible, you must fund your account within 30 days of clicking my referral link and keep your money parked in the account until 07/15/2024. So no enrolling and dashing. I will say that I have been banking with Ally Savings since 2016 and have absolutely enjoyed that their savings rate was competitive with other banking institutions.
Talk to us in the comment section below. Have you received your $25 bonus from SoFi?Have you begun the 52-Week Money Challenge yet? What has been the most challenging part so far? What do you think of SoFi's referral program in comparison to Ally's? What do you think of this referral wars brewing between banks. Do you view it as a good thing or a bad thing?
"The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought, and so broadens the mind." ~T.T. Munger
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