How to Change Your Attitude Towards Money in Terms of Poverty
When it comes to money, we are all working on several negative scenarios that could hinder our finances. And although it is difficult to go beyond the script, it is possible. This is what we are discussing this week.
Every Monday, we address one of your pressing personal finance questions by seeking advice from several financial experts. If you have a general question or money issue, or just want to talk about something PeFi-related, leave it in the comments or email me at [email protected].
This week a question from Christine:
I come from a family that was poor and HORRIBLE with money, but I was able to get all my shit together to buy a house, pay off all my credit card and consumer debt, and create the start of a retirement account. I also kicked my ass to have a great job that pays well. The problem is, I know I don’t know how to make money, and I am downright paralyzed by the fear of finding a financial advisor I can trust to help me. I have read articles on how to find a reliable advisor and am still afraid that this could end in disaster for me. I’m also terrified of what might happen if I * don’t find an advisor.
Can you start with the folks at my credit union? What do I need to watch out for? More generally, how do I get out of this poverty mentality and figure out how the hell can I have and manage money without constant fear?
This is what individual experts usually say about a problem that affects each person differently: if you need personalized advice, you should see a financial planner.
Changing your monetary worldview
Christine, the hard part of your question isn’t about finding a financial advisor – it’s easy enough (and I’ll list the steps a bit). It seems that the bigger issue at the heart of this question is your relationship to money.
There is no easy way to change our money thinking – what we experience as children and the lessons we learn will stay with us for life. But that doesn’t mean it’s impossible to develop the best habits you already have.
First, realize that you did a good job yourself: a home, zero debt, and a growing retirement account are not something to sniff at. This is really impressive – give yourself credit. And since you’ve done so much already, there’s no reason to believe that you’re going to screw it up now.
I feel like you lack confidence in your ability to manage your money and make decisions that go beyond the basics, like which retirement account to open – the feeling you indicated stems from the way you grew up.
But it doesn’t take any special skill set to be “good” at personal finance, and you don’t have to worry so much about mistakes that you don’t do anything, or defaults to something you’re comfortable with (in this case, your credit union ). Of course, you will need to do your research, but anyone can do it. What you are missing is confidence in this. Chances are, you don’t want to be back where you were when you were growing up. This is a real consideration; I don’t blame you for being careful.
But it’s also not a healthy mentality for your money that you could probably use better, but more importantly because of the stress it clearly puts on you. It won’t be easy to suddenly become more confident, but we have a few resources to help:
Change your money habits by changing your money history
This is a multi-step process that can help you rewrite negative money scripts. I would recommend buying the book by Amanda Steinberg mentioned in the post (it goes through the same cycle you are dealing with) or at least check out her Daily Worth website.
How Your Mindset Affects Your Finances
Some bad money habits are ingrained in our brains.
A mindset change that can help you get out of debt
How Gratitude Practice Can Help You Change Your Money Habits.
Think of money as a means, not an ideal
Thinking about money in black and white will only make you feel guilty.
You don’t need more money advice, you just need advice that you can relate to
It’s all in the title – if you’re reading tips that make you anxious or pessimistic, you need to read other money tips.
However, this is only a starting point. The right financial advisor can also help you with your monetary mindset – and you definitely don’t want to just trust those who work for your local credit union.
Choosing a financial advisor
Don’t be afraid to pick the “wrong” person to ruin your finances, there are many great advisors out there. But you need to do your research.
The most important thing you want to see in an advisor is that he or she is a trusted person, which means that she must put your interests ahead of her own. Typically, you’ll find them as “paid,” which means they don’t charge a commission on the products they advise you to use.
As I wrote earlier ,
Some of these proxies may be specialized – for example, a registered investment advisor will advise on your investments, not necessarily on all aspects of your financial life. On the other hand, Certified Financial Planners (CFPs who are certified by the Certified Financial Planning Standards Board) can probably help you create a comprehensive financial strategy that includes things ranging from saving and investing to insurance, taxes, retirement benefits. and estate planning. … They should communicate any potential conflicts to clients before and during referrals, and communicate how they are compensated.
These advisors are different from broker-dealers or “paid” advisors (yes, this description is deliberately confusing and close to paid).
You can find a consultant that suits your needs through the Garrett Planning Network , the Financial Planning Association, or the National Association of Personal Financial Advisors.
Another thing you may want to think about is see a financial therapist or coach if you can afford it. These professionals will focus less on estate planning and more on your relationship to your money — the confidence you lack and your “poverty mentality,” as you call it. Therapist visits can help you “figure out which aspects of your parenting, your monetary beliefs, or your relationship with money are causing you suffering, sabotaging, or hindering you,” said Brad Klontz, psychologist and financial planner, to Money . Magazine . Basically, this is a more formal way to rewrite your money scripts.
Financial therapy is a relatively new (and small) field, but it might be worth a try. You can find a qualified therapist in your state on the Financial Therapy Association website .
I also suggest finding a community to support, even if it’s just online. Reddit has several personal finance subreddits that are generally supported from all walks of life. Interacting with them or simply reading their stories can inspire you on your path to money.
Good luck!