Our relationship with money is a complex web of emotions, beliefs, and attitudes that have been woven together through our upbringing and years of experiences. From a young age, we are exposed to various personal financial situations that leave a lasting impact on how we perceive, understand and work with money. These experiences shape our attitudes toward finances and often steer us down a financial path similar to that of our parents. However, it’s important to recognize that some of our financial baggage might be hindering our financial growth and success. Just like any other aspect of our lives, we need to work on reshaping our attitudes towards money to avoid financial pitfalls, and create long term financial stability and success.
The Foundation: Childhood Experiences
Our earliest interactions with money occur within the confines of our families. Whether we grew up with parents who were frugal savers, generous spenders, or struggled to make ends meet, these experiences influence our financial behavior and attitudes. Children tend to absorb information like sponges, and the financial behaviors they observe in the home, largely from their parents, siblings or extended family often become ingrained in their own financial practices later in life. Just as we inherit physical traits from our parents, we also inherit their financial scripts—patterns of behavior and attitudes toward money. These scripts can be deeply ingrained, making it challenging to separate ourselves from them. Are we in debt because we never learned how to save and invest money, or because we were taught to value consumer spending, hobbies or entertainment. However, recognizing that we have the power to rewrite these scripts is the first step toward financial freedom. It’s essential to question inherited beliefs that no longer serve us and replace them with new, empowering narratives.
The Continuation of Familiar Paths
As we enter adulthood, we often unconsciously follow in the financial footsteps of our parents. Where parents teach and model astute money habits, children learn as if by osmosis how to view and use money in an appropriate manner. If parents avoid discussing money openly, it might lead to misconceptions or financial anxieties and will leave children to be influenced more by peers or act in pure ignorance. This tendency to emulate the financial behaviors we observed during our formative years can either provide a stable foundation or perpetuate unhealthy cycles. For example, if a person witnessed their parents living paycheck to paycheck, they might adopt similar habits without realizing it or internalizing the other possibilities. Similarly, individuals from families where the subject of money was taboo might carry over a reluctance to discuss financial matters with their spouses and children or seek advice from financial experts.
Breaking the Mold: Recognizing Limiting Beliefs
One of the most significant challenges in reshaping our attitudes toward finances is identifying the limiting beliefs that stem from our past experiences. These beliefs can manifest as thoughts such as “I’ll never be good with money” or “investing is too risky for me.” Take the time to evaluate your money-based belief system. How do you react to a change in your finances? A loss of a job or an investment gone wrong? Do you beat yourself up over your mistakes or move forward with the lesson learned? Introspect and keep track in a notebook how money makes you feel and how you respond to money conversations with your family or friends. Gather these observations over time to give yourself some raw material to consider. No, it won’t be an easy process. It will require effort, but as the Talmud in Megillah 6b says “If a person says I have worked hard but have not found [success], don’t believe him. [If a person says] I have not exerted myself, and I have found [success], don’t believe him. [If he says] I gave it my all and I have found [success], believe him!
Shifting Perspectives: A Positive Financial Mindset
Changing our financial mindset requires a conscious effort to reframe our thoughts and beliefs about money. This process involves fostering a positive outlook on our finances, seeing money as a tool for achieving goals rather than limiting our options or a source of stress. Developing financial literacy is a crucial step in this transformation. Learning about budgeting, investing, or managing debt for example, empowers individuals to make informed decisions and take control of their financial futures.
Seeking Professional Guidance
Transforming our financial attitudes doesn’t have to be a solitary journey. Bring your family and friends into your financial world to learn from others facing similar dilemmas. In Israel, people tend to be quite open about discussing finances, even financially sensitive data like salaries and loan terms. Alternatively, seeking guidance from financial professionals, such as financial advisors or counselors, can provide valuable insights and strategies for overcoming financial challenges. These experts can help us create personalized financial plans, set achievable goals, and navigate the complexities of investments and savings. Cultivate healthy financial habits like consistently saving a portion of our income, living within our means, and regularly tracking expenses to help us achieve long-term financial stability. By actively engaging in these practices, we reshape our financial behaviors and gradually replace negative patterns with positive ones.
“Your personal experiences with money make up maybe 0.00000001% of what’s happened in the world, but maybe 80% of how you think the world works.”
-Morgan Housel, The Psychology of Money
Our attitudes toward money are deeply rooted in our personal experiences, and they significantly influence our financial decisions and behaviors. However, we are not bound by these attitudes. Just as we work on personal growth in other aspects of life (and we are in Elul now), reshaping our financial attitudes requires awareness, effort, and a willingness to break free from inherited beliefs and limitations. By acknowledging the impact of our past experiences, seeking to understand our limiting beliefs, and actively working on cultivating a positive financial mindset, we can pave the way for a brighter financial future. Whether we grew up with financial abundance or scarcity, we have the power to take control of our financial narrative and create a path that aligns with our goals and aspirations. Wishing all of our readers a Sweet and Successful New Year!