Not so long ago, I discovered that I had a direct debit that had been going out of my account on a monthly basis since 1999. It was for a small sum of money, an insurance cover I had taken out on my very first mobile phone. Over the course of 15 years, that small sum of money amounted to the price of a really nice holiday. Around the same time, I discovered that a bank that I had an ISA with; had folded and had been trying to contact me for over a year or more. I hadn’t been opening the letters.
My problem is that I hate looking at my bank accounts. I have to psych myself up, to log-on each and every time. I am not sure why. Maybe it’s because I am scared of what I will find in my bank statements. It’s ironic because my job is to manage and make money for other people, something I am quite good at it.
My friends tell me, my money management is not as bad as I think it is. I don’t over spend, I have a private pension and I put a little bit aside every month. However the above indicates there is plenty of room for improvement. What does my friends view of my money management style say about their attitudes to money?
People don’t like talking about money, that is why it is easy to hide money issues. I have a number of friends who are in so much debt, that they see no way out; but instead of dealing with their problems, they keep on spending. Some have vast sums of money sitting in zero interest accounts, doing nothing at all. They feel safe and secure because they have money, they can see it and access it, but the money is not working for them. But most of my friends have a similar money management style to me, not particularly bad, but definitely room for improvement.
Discussions with my friends and the two events mentioned above made me realise that I needed to understand my fear of money so I can move through it and start taking more financial responsibility for myself.
“Believe you can and you’re halfway there.” –Theodore Roosevelt
The concepts we have around wealth are hugely formative in how we make and manage money, and this can significantly affect our lives.
To overcome money management blocks you will need to examine the limiting beliefs that you have attached to money. You will need to get to the root of how you habitually think about money. For example, it is really common for people to sabotage themselves from accumulating wealth because of deeply held beliefs or misunderstandings around money and its acquisition.
One of the most severe roadblocks to managing money is fear! Fear is a strong emotional reaction, and strong emotions can affect your ability to make rational reasonable decisions.
The fear of dealing with your money is not misplaced. Things do go wrong. You cannot control the financial market, and so you can’t predict the future. Housing markets crash and property can go into negative equity. You can lose your job and slip into long term unemployment. There is always some financial disaster in the news, that could just as easily affect you, so this is a very real fear. But instead of spurring people into action it seems instead to cripple them into inactivity or over caution.
There could be any number of reasons why you might fear money.
- A scarcity mindset, ie there never being enough
- Fear of being seen to be greedy and therefore a bad person
- Fear of the responsibility of money. A fear of losing your money through mismanagement
- A fear of being briefly successful and not being able to replicate that success
- A fear of facing the truth of your financial situation
- Mis-placed anxiety; worrying about the big things and not the little things.
- A fear of the guilt at having too much money
- A fear of not knowing enough about money and the prospect of learning about it, being over whelming
- A fear that the acquisition of wealth is out of your reach, so why bother trying?
- A fear that you have got enough, therefore, you don’t deserve more. A misplaced concept of wealth
- And finally, but not necessarily based on fear, but foolish enough to make me fearful. There is often an assumption especially amongst woman that someone else will rescue them financially.
My mother is a key case in point. When my parents were married my mother left all the financial management to my father. When they got divorced my mother was forced into a rude financial awakening (this was long before e-banking and direct debit). Even so, she thought she would get married again and be financially rescued. A few years rolled by and my mother realised that there was never going to be a knight in shining armour. So she bit the bullet and started taking her financial affairs seriously.
In her early 40s, my mother was an immigrant divorcee with little capital behind her, in a low paid government job. But by taking ownership of her financial affairs she has been able to retire comfortably well-off. She is vastly better off than if she had left the financial management up to my father, as he is useless with money.