Because problematic money behaviors are never about the money, more information about money is not enough to help us change them. Probably around 80% of our inability to change a harmful money behavior is emotional and subconscious.
Let’s take a common example: failing to save for retirement by making regular contributions to a retirement plan. Beginning to do this takes three steps: learn about retirement plans like IRAs, open an account, and set up a system for regular contributions, probably by automatic withdrawals from your bank account.
For a few people, learning this information would be enough to help them go into action. For most people, though, more information just doesn’t help.
Someone might have all sorts of really good reasons to not act: I just can’t afford it right now. I’m not sure that’s the best plan. Setting up an account is too complicated; I don’t understand it. I can’t set up an automatic withdrawal because I don’t know how much money I’ll need from month to month. I’m so busy right now; I’ll get to it later.
What do you do if you just haven’t been able to follow those three steps and start saving for retirement? The solution is in understanding the emotional baggage that underlies that behavior.
The best thing to do is probably call a financial therapist. If that is not a realistic option, what else can you do? You might try using some tools from the financial therapy toolkit that could help start the process of changing these hurtful financial behaviors.
These are tools or exercises that are most effectively used in a financial therapeutic relationship. You can also do them on your own. They certainly ought to help raise your awareness, and they may help with beginning to change the behavior.
The first thing to understand is that changing a hurtful financial behavior is not something you want to continue to strong-arm. You have undoubtedly tried to will yourself, white-knuckle yourself, or shame yourself into changing whatever the behavior is that’s causing you the problem. By now you have probably figured out that this approach is not helpful.
Instead, it helps to explore the good intention behind the behavior that today is problematic. Many years ago, likely in childhood, that behavior may have in some way protected you. Becoming aware of the beliefs and stories—the money scripts—behind that behavior will help you understand the original positive intention that shaped it. This is why a good place to start is with the KMSI-R money scripts inventory.
Another exercise that I use in my financial planning and financial therapy practice is something called the Money Egg. Basically, it’s drawing your story around money. You draw a large oval on a piece of paper and, starting at the bottom, you draw little symbols to represent your memories of positive and negative things that happened in your life around money.
Something similar is the Dow Jones money timeline. You draw a baseline and put money events along it chronologically, above or below the line according to whether they were positive or negative and how strongly positive or negative they were. This gives you a trend line of your money history, somewhat like a graph of investment returns, showing significant events with their highs and lows.
Another one that we use a lot is the Money Atom, which shows your family members in relationship to you. You draw yourself, typically in the center, and show other family members around you: how close they were, how big or small in relationship to you, how significant their money-related impact was on you. You can draw in all sorts of outside forces like alcoholism or workaholism or religiosity, as well. Seeing how the money and the lessons about money flowed can be very helpful in understanding the dynamics of money in your family of origin.
As we explore those parts of us that hold our money scripts and the emotional wounds behind them, we can begin to understand that they all have good intentions and that they all really have our best interests at heart.
Exercises like these are not quick fixes. There are no quick fixes that I know of in healing our money behaviors and helping build financial wellbeing in our lives. But they are good ways to begin the journey. As we progress along that journey, we start to see things getting better, with new insights, new behaviors forming, and a greater sense of wellbeing presenting itself to us.
Check out The Financial Therapy Podcast by Rick Kahler concerning this topic.