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You’re smart. You know that, I know that, all your friends and family know it.
So why the heck can’t you stick to a budget?!
It seems straightforward – measure how much money is coming in, and make sure less than that amount goes out. That’s, like, second-grade math!
So why do only one in three Americans make and stick to a household budget?
Most would tell you it’s because they spend too much money, don’t plan well, or simply lack self-discipline. Those things are for sure hurting your bottom line, but I’ve got some news for you…
It’s almost never just about the budget.
I understand the numbers can be frustrating and tracking your spending is a hassle, but I have reason to believe your budgeting woes are deeper than that.
How Your Subconscious is Sabotaging Your Spending
A former co-worker of mine (we’ll call her Katie) once shared with me her darkest money secret.
This girl was without a doubt one of the most outwardly put together young women I’ve ever seen in my life. From an outsider’s perspective, she had her shit together – gorgeous, always stylishly dressed, a one-bedroom apartment downtown, new car – things that many people in their early to mid-twenties only dream of. She was the picture of young and successful. Meanwhile, I’m walking into the office an hour late because my car wouldn’t start, coffee stain on my half tucked shirt sporting a three-day ponytail.
As the newest and youngest team members, Katie and I shared the same office. Our company regularly ordered lunch from a nearby café, and Katie and I would sit and chat over sandwiches and cupcakes. One afternoon as we were nibbling on BLTs and passing the hour, I mentioned something about my student loans and how I couldn’t wait to pay them off and kick ol’ Sallie Mae to the curb.
She nodded and said something to the effect of Yeah, debt sucks. Then she casually mentioned that she had racked up thousands of dollars in credit card debt furnishing her new one-bedroom apartment.
By her tone, it didn’t sound like a huge deal, so I asked how much. That’s when her attitude began to shift. Katie confessed to me that she had over $15,000 in credit card debt and was spending at least a thousand dollars more than her salary every month.
On the outside things seemed fine, but on the inside, she was freaking the fuck out.
I told Katie I’d helped other people with things like budgeting, paying off debt, and getting control of their spending in the past and if she was open to it, I’d be happy to help her, too.
(This was long before I became a financial coach when I used to just do this stuff for fun.)
Katie’s Money Troubles Were Deeper Than They Appeared
Two days later, Katie’s bank and credit card statements were spread out on my living room table. She sat silently beside me contemplating the decisions that got her to this point.
As it turns out, Katie grew up in a fairly affluent family. Her relatives were all engineers, businesspersons, and entrepreneurs who had done quite well for themselves, from parents to grandparents to uncles and aunts to cousins and siblings.
Their success afforded them things like newer vehicles, fancy furniture, expensive toys for their hobbies, weekly dinners at upscale restaurants and so on.
All Katie was doing was what she had seen and been subconsciously taught to do from those around her. The only problem was she didn’t have the income to support her spending habits.
Katie was living a $50,000+ life on a $30,000 salary.
The Role of Money Scripts in Our Financial Lives
Financial planner and psychologist Brad Klontz says we all develop one of four money scripts at a young age – money avoidance, money worship, money status, or money vigilance.
Other psychologists, financial coaches and gurus, refer to these as money personalities, money stories, or money beliefs.
The point is this: when we’re itty bitty babies learning how to survive in the world, we absorb everything around us. Our brains soak up all the information they can and act accordingly in order to keep us safe and alive.
You received all sorts of information from your family and environment that you still probably don’t even know is the underlying reason for much of your behavior today.
If your mom and dad’s divorce was difficult for your family, the thought of marriage may be terrifying for you. Therefore, you never commit to serious relationships. If your dad believed being a man meant growing a beard, wielding a hammer, and working the land, you may feel like your teaching job makes you less masculine.
Are those things true? Of course not. But do we convince ourselves they are? Hell yeah, we do! Thus beings the lifelong journey of uncovering, disassembling and repurposing these deeply-ingrained beliefs.
The same goes for money. We all receive subliminal messages about money at an early age. Money is evil. Money can’t buy happiness. People who have money are selfish and greedy. No one in my family has ever had much money so I won’t have any either. I need money for people to love me. People will love me less if I have too much money.
The list is endless.
In Katie’s case, the messages she received revolved around the “money status” money script – being well off (and seen as such in the eyes of her family) meant owning the newest and best things.
What she didn’t take into consideration was that none of the things she was spending her money on– the furniture, the fancy clothes, the new car, the downtown apartment – were helping her lead a fulfilling life.
Rewriting Old Money Scripts
Most money scripts are unhealthy and unhelpful. Once you’ve identified yours, the best thing you can do is unravel and rewrite them.
Identifying your money scripts requires a bit of self-awareness. Now that you know they exist and work to sabotage your finances, pay close attention to the feelings you get when you make purchases, receive money, pay bills, look at your bank account, etc.
One of the most helpful exercises I’ve found for pinning down these subconscious beliefs is to write a letter to money. Mine used to go something like this:
You make me feel worthless and powerless. I’m stuck in this loop of wanting more of you and simultaneously wishing you were never invented. I want to dedicate my time and energy to making a positive impact in the lives of others, but I feel that I can’t do that because I’m always worried about having enough of you to pay bills and save for an undefined future. I feel guilty for placing so much value on you when I know money can’t buy true happiness. If we could find a way to work together, I know we could do so much good in the world. But at the same time, I feel like I don’t have the skills or experience to make a lot of you. You confuse me.
I had such a love/hate relationship with money. I resented it, but at the same time knew that having more would allow me to do the things that would make me happy – build a business to help others, provide for my family, spend more time with loved ones, etc.
Most people have the same sort of love/hate, push/pull relationship with money. Having it makes us feel great, but wanting it makes us feel greedy and selfish.
When you’ve found what your money scripts are, question them to no end. What makes me feel this way? Why do I shop when I’m sad? What am I using money to replace?
Then reframe them in a positive way, sort of like a money affirmation:
- Money isn’t important, people are. à Money helps me support and share more experiences with the important people in my life.
- It is important to have a safe, secure job. à I ensure my own financial security.
- Money can’t buy happiness. à Money supports my happiness by allowing me to do things I love.
Write these new beliefs, read them, reread them, and say them to yourself every day.
Sticking to a Budget Means Mastering Your Money Mindset
You may have realized by now that I haven’t recommended changing your budgeting method, creating a spending plan, or signing up for any financial tools.
Here’s why: without mastering your money mindset, those things are essentially useless.
You can budget down to the cent, purchase the best software out there, and it may work for a few weeks, maybe even months.
But if you’re ready to see real progress, the next step is to recognize your limiting money beliefs, identify what’s causing them, and reframe your beliefs in a way that supports your goals. Real change starts from inside.
Master your mindset, master your money.
I’m a financial coach and author + owner of Goodbye to Broke. I love all things personal finance, money management, and healthy living. And I talk to my dog way too much, if we’re being honest.