A quick note before we dive in, I am under no illusion that poverty (sometimes at extreme levels) exists here and globally. The following is not an oversight of that fact and is admittedly more directed towards the mid to higher levels of the Socioeconomic strata. That said, over the course of my career in personal finance I have come to find that most people’s challenges are not around money itself, but rather their relationship with and to money. That is to say, the negative emotions that come up for some people when thinking or talking about money often are not because they don’t have enough to provide for their (and their family’s) needs. It’s usually more centered around their past experiences with money and the societal/cultural expectations and norms that they have “subscribed to”. In effort to help clear some of that away and offer a reframe, here are a few shifts we can make to “get right with our money.”
The Biggest Money Myths
There is never enough, more is always better, that’s just the way it is. These three myths are engrained in so many of us from a very early age, sometimes overtly and sometimes subliminally (Lynne Twist, The Soul of Money). This way of thinking, this mindset, inherently gives rise to a sense of lack and powerlessness. Countless studies have confirmed that making more money increases happiness and feelings of wellbeing up to the point of $70k a year, but above that amount there is little evidence that “more is better”. So, as a culture, why do we look at the ultra-wealthy and assume they must be the happiest people on the planet? My experience tells me that this is not the case, rates of severe depression, suicide, and substance abuse are extremely high in these segments of our population. It stems from the narrative that so many have bought into, “money buys happiness”. Don’t get me wrong, having money absolutely helps us feel secure because we are able to meet our needs, and it gives us the opportunity to have experiences that can bring joy into our lives. Where the train goes off the track is when the pursuit (or deification) of money, for money’s sake, becomes the main focus.
Money Is a Means, Not an End
When we pursue wealth as an end, whether for safety, self-worth, belonging, or status, it can have a detrimental effect on our wellbeing. Because what those who are in this mindset are actually seeking is the satisfaction of a set of basic human needs (or sometimes ego) which haven’t been fulfilled for them, they will always “come up short”. Money cannot satisfy these needs, only meaningful connection with our friends/family/community & contributing to something outside of/bigger than ourselves can. Finding causes or fulfilling “needs gaps” where our money can have great benefit for others and deploying financial resources towards them is a powerful way to connect our wealth to meaningful outcomes. When we do this, it can move us away from a perspective of “Money as an End”, and in the process create opportunities for us to look outside of ourselves and do some good in our communities (see ownership v. stewardship below).
Seek Contentment
I’ll take a beat to acknowledge that the message here is not to say that if you don’t have enough money to meet your needs just be happy with that, or neglect to work to improve your situation. Conversely, it is more about relinquishing expectations or entitlement around money (i.e. I deserve more). More accurately, its about finding contentment while still striving to better your circumstances. The best recipe for a mental (or even physical) health disaster is to constantly carry feelings of resentment, envy, jealousy, lack, or being a “victim”. These states of being are rooted in powerlessness and cause us to do things and act in ways that are not in line with our values & principals, often with detrimental outcomes. Instead, if we can focus on our talents, gifts, and abilities, we can be(come) confident in our capacity to create more opportunities for wealth accumulation while being accepting of where we currently are.
Set Targets and Track Progress
It is often said that what is not tracked, cannot be managed; I believe this wholeheartedly. If we are not paying attention (or intention) to our finances, there is very little chance that we can foster a beneficial relationship to them. Even the folks I’ve had the pleasure of serving who are quite wealthy, that don’t “pay attention” to their spending/saving/giving, find themselves wondering where it all went. So, this isn’t a “haves vs. have nots” issue…its actually pervasive across all wealth levels. The remedy does not have to be painful or tedious, we just need to be more mindful of what’s taking place in our Personal Economies. Setting targets for spending/saving/giving/investing and routinely tracking our progress, sometimes this looks like meetings with our accounting team and sometimes it’s as simple as sitting down with our spouses, will provide more clarity and peace of mind in knowing that the dollars coming in and going out are in line with what we want to be happening.
Ownership vs. Stewardship
I am a firm believer in the analogy between money and water: that is, when it is pent up and hoarded it becomes stagnant & toxic. Just like water systems, when financial resources are “reservoired”, it neglects all the ecosystems that are “downstream” which can cause deficiencies & lack of means for those ecosystems. Yet, when nature can take its course, resources flow and means are plentiful. This analogy may seem oversimplified or inapplicable to some, to which I would say take a look at communities where well directed and outcome-based philanthropy are prevalent, and you may reconsider your perspective. What it comes down to is this: if we can embody a role of stewardship of our money, as opposed to one of ownership, it changes how we relate to it and the energy it carries along with it. It also has a profound effect on our emotional state of being, one that can usher a very beneficial and optimal outcome for our family and our community.
