Someone who is “good” with their money appears to know the very best way to deal with their finances in all situations. They don’t seem to make mistakes and look as though they are confident about every decision they face. That isn’t always true. While some people have experiences that make it easier to inhabit the belief that they are a “money person,” in fact, we are all money people, each with a unique money story.
Your Money Story
Money is an uncomfortable topic in our culture, and few of us are accustomed to talking openly about it. It is, however, something we spend a lot of time thinking about. One in four people recently reported it is the one thing they think about most on any given day. Politics, current events, and relationships far outrank money as acceptable topics of conversation with friends and family. For such an important component of life, we are left without easy opportunities to discuss our concerns and decisions around money.
Everybody has a money story. There is no formal system of financial education in America, so the origin of our financial narrative is variously sparked by observations of our own families, the broad economic landscape, and how money is portrayed in media. These impressions are formed early, with core financial habits emerging by the age of 10. That process may or may not happen in an environment where money was readily available or with good financial role models; nonetheless, these initial impressions last well into adulthood as foundations of our behaviors.
My grandmother often talked about growing up during the depression. She worried about the cost of things and how much waste there is nowadays. Watching friends, neighbors, and most of the country struggle financially left a lasting impression on her, no matter her own personal circumstance. For many people who grew up in that era, they learned to be cautious about spending money. In your own childhood, you may recall an unspoken impression in your household that the family never had enough money, or conversely that there was always plenty to go around.
Even if you aren’t able to articulate it, your money story is there running behind the scenes. Our unique stories make themselves known through our internal dialogue, how we talk to others about our finances, and ultimately the decisions we make around spending, saving, and investing. Understanding them is critical to being able to effectively engage with financial decision-making.
Exploring Your Narrative
As you become increasingly aware of the financial story you are living, it is important to ask a key question: are you okay with your story? Understanding your story and your own judgments about it gives you a greater ability to explore how you make decisions, and intentionally choose to change your money story through new patterns.
This awareness is particularly valuable when an abrupt change occurs. Perhaps you received a large inheritance, and suddenly feel the weight of responsibility to live up to family expectations. Or maybe you experience a career windfall from an IPO, and find yourself as a financial steward of larger sums. It could be that you’ve lost your spouse, and they had always been the “money person” in the relationship. How do your current habits and practices fit with this new scenario? Being more mindful of your money story can take you off of autopilot and allow you to explore a broader set of outcomes.
Other changes are gradual and come from a nagging desire to make particular adjustments in our financial lives. You may have wanted to increase your charitable giving or amount of gifting to family. Your money story might have convinced you it’s too complicated and overwhelming to monitor your cash flow, or that you should limit giving to protect your own security. Take a small first step and look at your spending and reflect on your reactions to the idea of sharing your resources. It doesn’t have to be perfect, and it doesn’t have to be fast, but you can take a step toward being more intentional with your money.
Change Happens in the Present
Reflecting on the past is a key step as we build greater awareness about our money stories and how they influence our financial decisions and relationship with money. It is also important to reflect on the future and envision what we want from our lives and how our finances can support those goals. However, real change can only happen in the present moment.
The path to a new or enhanced identity as a “money person” doesn’t happen instantly – it takes time to understand the habits and perspectives that were built over a lifetime. With more clarity, pursuing change becomes possible. For some people that means being more diligent about savings and budgeting, while others need support to spend and gift in the context of a long-term financial plan. As with many efforts to create change, having a good partner can help. At North Berkeley, we work with clients to develop the confidence to tailor their financial decisions to the unique considerations of their life and their relationship with money. Being mindful about our finances can move us intentionally in the direction of the story we want to be living.
An exploration of how our personal narratives and relationship with money shape our decision-making and sense of financial fulfillment.
This commentary on this website reflects the personal opinions, viewpoints, and analyses of the North Berkeley Wealth Management (“North Berkeley”) employees providing such comments, and should not be regarded as a description of advisory services provided by North Berkeley or performance returns of any North Berkeley client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data, or any recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. North Berkeley manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.