Financial New Year’s resolutions are some of the most common ones that people make: to save more, spend less, follow a budget, and the like. Yet by and large, most of these resolutions will be unsuccessful. Typically, white-knuckling—willing yourself to make any type of transformative or permanent behavioral change—doesn’t work well. It can work for maybe 30 or 60 days but commonly isn’t sustainable. I notice this every year at the gym where I work out. Every February the population swells, and by April the numbers are usually back to normal.
Changing any problematic behavior requires three things: becoming willing to admit that the behavior change is really important, becoming confident that you can do it, and becoming ready to change. Any one of those can trip you up.
We often have some denial about whether a change is really important or whether we really need to change at all. It typically takes some sort of intervention in our lives to call our attention to the reality that a behavior is a problem. This intervention may result from a financial crisis. It may also come less dramatically, through ordinary life changes or even new information from a financial professional.
Even when we move out of our denial, it’s common to resist the intervention, in part because it takes courage to overcome the fear of looking at reality. It isn’t easy to bring objectivity and understanding to entrenched financial delusions. The first step is to look into the past and revisit events in our lives, because these are often where our strongly held delusions form. Most of us would prefer to skip this step and focus instead on obtaining more information on how to save, invest, or spend wisely.
This is especially true when there is some type of trauma in our past that we don’t want to look at or may not even know is there. We try to jump into the present and white-knuckle the change. It just doesn’t work, because what we need most for transformation is emotional intelligence gained by healing from trauma. And emotional intelligence can’t be learned academically or even developed all by oneself. It has to be learned emotionally, experientially, and in community. We’re often wounded in relationship and therefore we often need to heal in relationship. Just like Ebenezer Scrooge in Dickens’s A Christmas Carol, we need guides. He had the spirits of Christmas Past, Present, and Future. Our guides may be financial therapists, financial advisors, or support networks.
The starting point for a journey of financial transformation is to explore the traumas in our past. It’s important to look at our history with money and identify our money scripts—the unconscious beliefs about money that we formed in childhood and still carry with us as unconscious burdens. These didn’t start off to be hurtful. Money scripts are always formed to help us survive, with the best intentions of keeping a part of us from feeling emotional pain. They have shaped our financial behaviors in the present, including those that don’t serve us well.
My suggestion this year is not to make a New Year’s resolution to force yourself to save more or follow a budget. Instead, you might consider resolving to gently explore your past and uncover the money scripts behind your financial behavior. It’s likely to be a more effective way to begin moving toward lasting change that will lead to greater financial wellbeing.
Check out The Financial Therapy Podcast by Rick Kahler concerning this topic.