Money Matters: 6 Secrets to Shedding Your Family’s Money Baggage
Thanksgiving is coming up fast, and for many of us, that means we’re in for some serious family time. But everything can’t be fuzzies and pie. A trip down memory lane can remind us of our family’s money baggage. Our friends at www.Learvest.com tell us, the the money lessons you first learned at home tend to follow us through life.
“We learn from our parents,” explains Jonathan Alpert, psychotherapist and author of “Be Fearless.” “Money is an important part of our upbringing. We model our parents’ behavior and it becomes ingrained in us. It’s difficult to break out of that.”
Money Toxic Behavior #1: Living in Denial
What Causes It: “This is classic avoidance,” Alpert says. “It’s the mind’s way of avoiding that which it anticipates will be uncomfortable or anxiety-provoking.”
How to Shake It: Get motivated by the outcome rather than the process, says Alpert: “Think how you’ll feel once you clear the bills off the table,” he says.
Money Toxic Behavior #2: Embracing Debt
What Causes It: “Living paycheck to paycheck and surviving has become the norm over the past few years,” Alpert says. “People are feeling defeated, unable to see the future and stuck in a perpetual cycle of work and paying the bills.”
How to Shake It: Before getting ahead of your finances, you need to start catching up. Start putting as much as you can afford (even if it’s only $10 each week) away to pay off any bad debt like credit cards and car or consumer loans, and start shoring up an emergency fund. When you’re debt free and have a little financial cushion, then it might be time to turn your attention to investing. Think $10 investments aren’t enough? Think again–just ask this woman, who turned $10 stocks into $60,000. It might take some time to get ahead of your money, but the most important thing is that you start right away.
Money Toxic Behavior #3: Throwing Budgeting to the Wind
What Causes It: ”A lot of people use buying as a way to provide comfort in the same way that people might overeat–as a way to feel fulfilled,” says Alpert. They buy lavish and luxury items they don’t need to make them feel complete or special.”
How to Shake It: We don’t need to explain that money doesn’t just “appear,” but seeing where all your dough goes is also one of the best ways to avoid mindless spending. By consistently tracking your earnings and expenditures in the free LearnVest Money Center, you’ll get a sense of how much you really have to spend on what.
Money Toxic Behavior #4: Leasing Instead of Buying
“Maybe it’s a growing up in Detroit thing, but everyone in my family has always leased a brand-new, very cool car for a few years, then traded it back in for another. They’d never settle for wheels that were less than snazzy.”
What Causes It: “For a lot of people, the appeal of leasing is the convenience,” Alpert explains. “Decisions are made for them. The price and time frame are set, the mileage is limited. People like order and control, and they feel like this provides it.”
How to Shake It: He points out that the hardest adjustment for someone who inherited this practice might not be the age of the car, but making the distinction that a car is a method of transportation from point A to point B, not a representation of who you are. “Don’t let a car define you,” he advises.
Money Toxic Behavior #5: Resenting the Joneses
What Causes It: “Social comparisons are normal and her mom was right that it ‘must be nice’ to be able to buy a new home and take vacations,” Alpert tells us. “Her statement though, suggests a hint of jealousy and/or anger.” Though these emotions might motivate someone in the short term to make changes, he explains, they’re ultimately draining, not a good motivator like setting your own goals to pursue because you truly want to achieve them.
How to Shake It: “Keeping up with the Joneses will only allow you to be as happy as the Jonseses,” Alpert cautions. Money comparisonitis is the real, toxic behavior of constantly comparing yourself to those around you, and the first step to getting past it is forgiving yourself: It’s totally normal. In fact, a study of data collected since 1970 shows that we base our self-esteem more on the money we make compared to others, or our relative financial status, than on our actual financial picture. If you’re concerned that you might have money comparisonitis, take our quiz to find out.
Money Toxic Behavior #6: Wanting What You Want Now
What Causes It: Not everyone sees the value—or the joy—in seeking out the best deal. “For some people, there is great satisfaction in knowing they got the absolute best price on a product, and that outweighs any amount of ‘wasted’ time and energy. For others, it just doesn’t feel worth it,” says Alpert, who explains that they may feel more uplifted by the temporary thrill of immediate gratification.
How to Shake It: Nobody’s saying you have to be an extreme couponer if that doesn’t appeal to you. Splurging—in the right way—can actually be good for your finances. But depending on your financial situation, and your budget, you need to know when it’s OK to treat yourself and when you’re just throwing money away that you could be able to save. One good way is to enroll in our free Take Control bootcamp, which will teach you how to set boundaries—and long-term financial goals—for yourself.
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