Many people, even today, have an unusual psychology when it comes to money. There is evidence many people dislike thinking about or managing money, and in some cases, even fear money. This is quite concerning because money is like water. It is something we must see differently to survive. If we re-frame money, we can align ourselves with it. From alignment we can become empowered. We can then replace fear with flow, and fuse purpose with abundance.
What is your earliest memory or thought about money? Like most, we may have earned pocket money as a kid for chores, or in other novel ways. I remember at about the age of ten collecting ‘Footy Cards’, and seeing them as a source to barter for other rare cards. In some cases even swapping them for real money. I remember as a kid the joy of working for money, gardening, pet minding and so forth. There was greater joy in sometimes finding money on the street. I felt ‘rich’ when I found a twenty cent coin during a rainy walk to school to buy a treat for lunch.
My earliest memories about money were positive. Then something strange happened. I was given other conflicting, odd ideas. ‘Money is bad.’ ‘Money is the root of evil.’ ‘People who have a lot of money are not honest.’ ‘Do not love money.’ I am sure we all had this conflicting mix of money ideas as kids, but have we ever stopped to question them? Have we taken time to harmonise them?
The most interesting thing, and I never did work this out even to this day, is that, if money was so important, then why were we not taught about it as kids? Why was there no Money Management or Wealth Creation course in primary or even high school? Most of our thoughts and emotions about money came haphazardly from conflicting bits and pieces over time. Often coming from people who may not have mastered money, or their own money mindset.
When I got to high school and university and started studying commerce and economics, the psychology and mastery of money was still not taught. It was assumed, or simply glossed over. While Keynesian Economic Theory might be useful, it did not address the still conflicting thoughts and emotions we all still had at the time. Why?
Only in the last decade or so Behavioural Finance has entered the mainstream and drawn a link between money and psychology. This may partially explain fluctuations in the financial markets, but does it help the everyday person better understand, manage and harmonise their own money psychology?
I read an inspiring story recently about an Indigenous woman in Australia, Naydeene Edwards who identified a fear of money amongst her people. She then learnt to challenge this perception, and to see money as a “tool for us to use to better ourselves, our family and our communities.” (Bryce, B. 2019, ‘The Aboriginal Women Who Fought Homelessness And Stereotypes To Take Control Of Their Money’, accessed 27 March 2019, < https://www.abc.net.au/news/2019-03-17/the-indigenous-women-taking-charge-of-their-financial-futures/10908274 >).
I found this story very powerful and concerning at the same time. It gives us inspiration and hope that by challenging perceptions, by re-framing money, we can overcome and better our lives and that of our families or community. However, it is also concerning because it is consistent with other evidence in the Financial Literacy area and beyond, that proves the psychology of money is a widespread problem.
“Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.” -Ayn Rand
From these life experiences and related evidence, it is possible to distil seven key steps to overcome blockages and negative associations we have about money-
- Awareness. Awareness is the first step towards changing any problem. Become aware of your positive and negative ideas and emotions about money and its management. See the conflicts, see the negative, and often unproven ideas as things we must change, things we can easily change.
- Document. After awareness, it is important to document conflicting ideas and emotions, otherwise they will just keep swimming around, and no change occurs. Simply, use a three column table: The Money Psychology Table. Put positive thoughts about money on one side, then negative thoughts alongside. In the third column, call it Harmonise. Leave this third column for later-see below. Just focus on the negatives and positives; sometimes there will be links between them. Often they will look odd or silly. That is okay, just make the subconscious conscious.
- Education. Then get some basic education about how to manage money, how to save money, how to invest and so on. Keep this education simple and short. Some information can be obtained online or in key books. Finance has been made complex needlessly. The basic principles of money, and wealth creation are not complex at all. They are simple and universal.
- Re-Frame. With basic education, you can then change or at least ‘loosen’ your perceptions about money and wealth. This will give you a foundation of confidence. Most of us still have negative thoughts outweighing the positive ones. Now return to your Money Psychology Table, and then question every positive and negative thought or idea about money and finance. Questions are the great enabler. Ask things like: ‘Why is this necessarily the case?’ ‘Who taught me this idea?’ ‘Were they money experts?’ ‘How can I replace this negative idea with a positive, more useful idea about money?’ These questions will facilitate a re-framing of the ideas and emotions surrounding money. You will see money and wealth from a different lens or perspective. You will find higher, better ideas about money, and you will begin to remove the negative ones. Insodoing, complete the Harmonise column of your Money Psychology Table. Perhaps the most common higher idea is, you will see money as a means, not an end.
- Alignment and Purpose. When you now see money as a means to an end, you realise: money is always positive if your end or purpose is positive. When money is used to help others, such as your family or your community, then money is always positive. When money is linked to serving others, you are aligned with yourself, your purpose and the powerful tool money can be.
- Flow. By aligning yourself, money and purpose, you can find the true flow of money. This is the same with any resource, such as time or the help of other people. When a resource is used to help others, or is focused on a purpose beyond ourselves, then often synchronicity shows up. A multiplier effect occurs. We see this in great companies, time and time again. Great companies with an audacious vision or mission that serves others, will often succeed in the long term. Self interested companies rarely succeed in the long term. Great companies attract the right management and other people, including investors. Flow occurs. We also see this in Philanthropy, such as in the Bill and Melinda Gates Foundation directing money to solve problems, such as cervical cancer.
- Control and Empowerment. The final step is control and empowerment. Now you control money, not the other way around. You manage money like any other resource to solve a particular problem, to serve others. Now you are empowered to fulfil your purpose.
Over many years now, I have researched and worked in many areas involving business, economics, different financial and other markets, simple and complex financial strategies and instruments, but the starting point has always been the psychology of money. How we ‘see’ money as a means to something better guides everything. When we move from fear to flow, we move from scarcity to abundance. If money is essentially an idea, ideas have, and will always be, infinite. The best ideas flow like water in serving us all. Perhaps this was the intended purpose of any form of exchange, any means that unifies us.
“If money is essentially an idea, ideas have, and will always be, infinite.”
By Lee Spano, Creatness International www.creatness.com
© Copyright Lee Spano. All rights reserved.