Your Money Mindset Affects Life Financial Decisions
When you think of the best gift you’ve ever received from your parents, it probably has nothing to do with your money mindset. You can think of the most useful, most thoughtful, most creative, or most expensive gift. Or maybe it was a gift he gave you to feel something, a gift that tapped into a deeper emotional side.
As we get older, and theoretically a little wiser, we realize that the most impactful gifts don’t come in boxes. They are the lessons our parents instill in us during our developmental years, and the most powerful lessons are often not taught intentionally. They are what we learn by watching our parents act, listening to how they talk, and feeling their emotional responses.
As it turns out, this is how most of us develop our core beliefs, values, and attitudes about money that affect the way we see the world. This world view of money, what I like to call your family money map, is influencing your financial decisions to this day.
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Explanation of money maps
Your money map is how you view both your inner self and the outer world in relation to money. Your map is what helps you chart the course of every financial decision you make. To use a more modern example, think of it as a financial GPS guiding you. In short, your money map is your view of the world, both internal and external.
Your money map and view of the world is a complex web of beliefs, attitudes, emotions, and values that you attribute to money and the role it plays in your life. It influences how you think and feel about money; it is those thoughts and feelings that influence your actions and behaviors.
Here are some examples:
- If your parents had problems with debt, you may have a strong belief that all debt is bad.
- If your parents never had savings and were stressed about money, you may feel anxious about managing money or a vigilant saver (i.e., savings build security).
- If your parents argued about money, you may avoid talking about it or financial disagreements stir up a lot of very strong emotions.
Money maps are passed down from generation to generation. Your parents have their own money maps (influenced by their parents) and they pass them on to you. And you will pass your map to your children. We are all giving away what is arguably one of the most valuable lessons we can learn in life, and it is one that will affect both our lives and our financial decisions.
How our money maps are formed
Our money maps are formed early in life. In fact, the attitudes, beliefs and emotions that form the basis of our view of the financial world are formed at the age of 7 (opens in a new tab). That’s right: what you think and feel about money, how money affects your identity, and how you view money in the world are all encoded in your brain before you develop any critical-thinking skills.
This is how this works. When we’re young, our brains (think of them as mini supercomputers) are waiting to be programmed. Before we are 7 years old (approximately), we lack the ability to program them ourselves, so our brain’s fundamental programming depends on the world and people around us. Enter our parents.
Our parents’ observable attitudes toward money will form the very code that programs our minds. When we lack critical thinking skills (again, before the age of 7), everything we learn and experience from our parents becomes a feeling (an emotion) that is encoded in the subconscious and unconscious parts of our brain.
In essence, we program or condition ourselves to think, feel, and act in specific ways. And those programs continue to run, often below the conscious level of thought, and impact our lives even today.
How money maps affect our finances
What most adults get wrong is that they think their money problems are thinking problems. In reality, they are feelings or emotional problems. That’s not to say that making smarter, more informed financial decisions isn’t important. It is essential to improve our financial health, but there is something much deeper that influences our daily lives.
Visualize an iceberg. The part that sticks out of the water represents the thinking part of our brain. The 80% to 90% that is under the water, the subconscious and unconscious mind, represents our feelings about money. And those feelings (emotions, attitudes, beliefs) are the main force that influences our decisions today.
In my previous article on why financial education alone will always fail, you can learn why more information and more knowledge (that is, more thinking) fails to change the way we act and behave. There is something much deeper that we need to explore.
The early programming of our minds is still with us today. Every time we make a financial decision, our brains (those supercomputers) run a program that sits just below the surface of our conscious mind. The decisions we make and the actions we take depend on our awareness of that programming and how it interacts with our logical and rational mind.
Improving our financial well-being begins with understanding the healthy or unhealthy beliefs, attitudes, and feelings that have been programmed into our brains. If we want to live richer and more fulfilling lives, we must begin by exploring our money maps and how they are charting the courses we all follow.
Stay tuned for next month’s article to learn how to explore your personal money map and learn practical steps you can take to change the unhealthy beliefs, attitudes, and emotions that can prevent you from getting the most out of your money.