Updated: May 19
Ever wondered why we can so easily self-sabotage rather than make the smart and wise money decisions we know we should?
Why would anyone with money troubles decide to splurge and spend an expected pay-check instead of saving or investing it?
How can we change our ways to become money smart no matter the circumstances?
We've got the answers!
We self-sabotage instead of making smart money choices because of our personal relationship with money.
Money is not strictly objective, $1 will always be $1 for the sake of commerce, but what that $1 represents to each person varies incredibly based on our personal experiences. The combination of those experiences is called the money blueprint.
Our blueprints are mostly established in our childhood and are based on what we watched our parents do and say when it comes to money. Think about your early years, what did you observe your family do or say about money? You will likely see some parallels between your present-day behaviour and what you learned decades ago, wild, eh?!
I'll never forget the day I realized I was following in my parents' footsteps.They taught me a lot of awesome things, thanks Mom and Dad! But like many women of my generation, being money smart wasn't one of them. One day, I caught myself saying the exact limiting belief sentence I heard my parents repeat to me daily! It hit me like a ton of bricks!
Human beings have a number of behavioural biases, especially
when it comes to money, these are “automatic programs” running in our brain. It is only when we start paying attention to them and making a conscious effort to rewrite them that we can change our blueprint and make smart money decisions! Pretty awesome stuff!
For example a someone with money troubles may feel inclined to splurge instead of save because their blueprint is that money is highly scarce. Logically, they should want to save it, but human beings do not always behave logically when it comes to money, rather we are more driven by either pleasure or pain. When people are extremely frugal, they are subject to experiencing frugal fatigue, it is very real! It leads them to seek pleasure to compensate for the pain they’ve experienced for so long, like not having enough money. I can totally relate, can you? Having money troubles absolutely sucks, so the moment you can enjoy it a little bit, it's normal to want to give in.
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Making better money choices starts inside our mind and then is applied in our daily life.
The first step is always to consider what you believe about money:
What have you earned in your life so far about money?
What did your parents teach you about money?
What do you believe about money and yourself in regards to money?
This empowers one to question their spending habits as well as their income generating activities and in turn improve both sides, spend wisely and increase income.