Psychology of Money
Our relationship with money is at its core psychological. We have deeply ingrained attitudes towards our financial future, such as “I’m just not the type of person to be rich”, or “every investment I buy fails”. We tell ourselves negative stories about our financial abilities, and hence, they become our reality. We are not our parents. Whether we were raised wealthy or poor, with a personal belief in our own ability for abundance or a deep fear of our failure, we ultimately are responsible for our own financial life.
As we took an inventory of our own personal “fault lines” in the preceding post, we now turn the focus internally. From infancy, we have watched the world of commerce around us. You may have grown up in a wealthy family, in which money was never a polite conversation. Perhaps you watched your parents struggle to pay the bills, and felt guilty asking for things you wanted as a child. All of these experiences shape our own attitudes towards money and our own wealth creation. I find it so interesting that in so many families money is an absolutely “taboo” subject. People would rather talk about sex or religion than their own personal finances! This notion of money discussions being in bad taste has further handicapped women in finding their own financial compass. Not only are these conversations appropriate and healthy, they are absolutely necessary if we are going to get to the bottom of our “money issues” and grow our wealth.
What Does Money Mean To You?
What does money represent to most people? It is the exchange of our work hours, physical efforts, and intellectual property. You can ask a number of people this question and get a number of different answers. However, most people have some commonalities and “types” they fall into in regards to money matters. Money is associated with a short list of emotions, such as security, fear, power, freedom and love. Investors are varied in their risk-tolerance, almost regardless of age. Depending on what generation they came of age in, they have common characteristics of their peers in attitudes towards money matters. We all have a personal relationship to money, which is rooted in our childhood, which is shaped by memories of parent’s financial situation, money stresses, and financial windfalls. These forces together shape our individual attitude towards money, and in order to develop our own path to Financial Freedom, we need to identify what our relationship is to money, what our risk tolerance is, how our generational experiences have shaped you, and what your personal goals are. This is a tall order- but the process is so empowering and fulfilling you will find yourself buoyant with self-confidence.
Money and Security
Money is associated with security for most people. It is assumed that with more money, you have more security, and vice versa. When people turn to money for security they often alienate others because significant others are seen as a less powerful source of security. Research has found that among the wealthy, fear of financial loss becomes paramount the security concept is based on more and more money, providing feelings of self-esteem and safety. Women that are too focused on security with their money can be self-sabotaging, through becoming compulsive savers, compulsive bargain hunters, and those who deny their wealth and attempt to live in self-imposed poverty. People are afraid of wealth, and the envy and resentment that are directed at you when you have it.