Our research has led to a framework for understanding attitudes and beliefs about money. We call it your Money Mind®, and understanding it can make you more comfortable with your financial position today, and your goals tomorrow.
All of these attitudes toward money have roots in beliefs that can help you make better decisions – and all have risks when taken to extremes. Understanding the limitations of your dominant way of thinking about money can help you limit your Money Mind’s potentially negative impact on your financial decisions.
Fear can be good, because it allows for caution in spending and using money. But too much fear can limit your opportunities and leave you feeling that you have missed out yet again.
Commitment to taking care of family and friends is admirable, and can help those who need it. But too much commitment can mean you might never put yourself first and don’t have what you need to enjoy your own money.
The Happiness approach allows for full enjoyment and celebration of money and what it can do for you. But too much happiness too soon can mean there is not enough money left over at the end of your earning years to enjoy your retirement.
Like everything in life, the key is in understanding why we do what we do so we can make decisions more consciously and objectively. If we know why we tend to make a certain kind of financial decision, we might be more likely to question whether–in a certain circumstance – it is the “right” decision for us.
No, we’re not saying listen to yourself talk, but listen to your self-talk — the internal voice that guides your financial decisions. Each of the Money Minds has its own unique style.
A Fear Money Mind might say, “There is never enough money. I saw my parents lose everything and I won’t be in the same boat. I can’t spend until I know I have saved enough to make me comfortable.” To reduce the anxiety associated with Fear, tell yourself “Being careful is a good thing, but I also need to enjoy my money.” Ask yourself, “How can I balance spending and saving so that I can feel good about my decision?”
A Commitment Money Mind might say, “My role in life is to care for others. I have been fortunate to earn, and it’s wrong to keep it all for myself. Others need me to take care of them.” To reduce the tendency to give and give and give, one could use different self-talk such as: “I can care for others AND care for myself. I enjoy taking care of others but my hard-earned money is a celebration of my success. I can find ways to use my money for my own needs and put those first sometimes.”
The Happiness Money Mind might say, “Money is meant to be enjoyed! Spending is my right and my obligation to reward myself for what I have earned!” To lessen the tendency to overspend and to miss opportunities to save for a future, one could use different self-talk such as: “I can enjoy my money AND save for the future. I operate with a plan–I know what I need to save and then I spend what’s left over. I make spending decisions only after I put something away for a rainy day, when I will also want to be happy and joyful!”
Learning to listen to the voices that tell you what to do with your money is an important first step. Questioning those voices and giving them other ideas to think about can help you make more balanced decisions.
If you would benefit from an outside voice, please talk to us. Talk about the approaches you often take toward money, and learn how you can honor them, but also balance them with other viewpoints to make the best decisions – for you.
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