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Money and Narratives

creating life stories helps us make sense of the world

❝Life can only be understood backwards; but it must be lived forwards.❞ -Soren Kierkegaard

I'm walking on a trail next to a pond on a gorgeous summer day. I'm walking Lucky, a dog that I'm dog-sitting. The trail I'm on belongs to a friend, and I often walk my dog, Bingo, there. Because it's a pretty self-contained area, Bingo gets to run off-leash. For the same reason, I let Lucky off her leash to burn some energy and have some fun...

Version 1 (Victim Story)

...Lucky is sprinting around from place to place chasing rabbits and birds when she suddenly notices a muskrat swimming in the water - water covered in nasty algae. She takes off towards it, jumps in the water, and swims in circles through the green pond scum. All of my recall commands are falling on deaf ears. In fact, it's quite embarrassing shouting at Lucky to come back to me over and over again. After five minutes of this, Lucky finally comes out on the pond and walks towards me covered in green slime before chasing off after a duck in the water. Here we go again! The cycle continues, and I'm wasting even more time trying to get this dog out of the water. Once I finally do, it's time to go home and waste more time showering this dog. The whole thing is a waste of time and sucks the energy out of my entire day. I don't know why this always happens to me.

Version 2 (Resilience Story)

...Lucky does a pretty good job with recall in controlled situations, but I haven't had much practice training her outside of the house. Today is a perfect opportunity to test recall training in an environment with many distractions. It starts off okay. It takes a little bit, but once she makes the connection between coming when called, hearing a clicker, and getting a treat, she starts to get it. Unfortunately, my training isn't advanced enough to stop her when she gets distracted by a muskrat in the pond. Eventually, I get her attention, and she swims back to shore, only to be distracted again, this time by a duck. I learn that it's possible to train her and that I have some work to do when it comes to highly distracting environments.

Version 3 (Gratitude Story)

…I enjoy watching her run around, enjoying being a dog. It's fun to watch her chase after birds she thinks she can catch or after rabbits that seem to taunt her. Still, she will chase after the next one with hope and optimism that this time might be different. Then she sees a sight she hasn't seen before. She sees a muskrat in the pond. I saw her see it, but I couldn't get to her time before she sprinted towards the water and jumped in with enormous joy. Of course, she'll never catch a muskrat in a pond, but she doesn't know that. Lucky continues swimming in circles with what looks like a smile on her face. I have seen these muskrats before, as has Bingo. Bingo has attempted to chase them before, and every single time they get away, never to be seen again (at least while we are there). It's interesting this time because Lucky must've gotten close to their babies. I've never seen this before, but the muskrats, rather than running and hiding, actively chase Lucky. Unlike Lucky, they didn't look very happy! It is such a joy to experience this happening right in front of my eyes.

our life stories serve as perspectives we can use to make sense of what happened in the past


You don't know this, but you are an autobiographer. You may think that only very few famous people write an autobiography. And you would be right if we were strictly talking about published autobiographies. But everybody all the time is writing the stories of their lives in their minds. There are too many events and facts in life for us to keep track of. It's random and chaotic. Creating stories around these facts and events makes it easier to deal with, explain, and make meaning.

As we author the story of our lives, we construct narratives about what we've seen and been through. These narratives become part of our identity. As we identify with the stories we tell ourselves, it becomes harder to challenge our assumptions. Whether we know it or not, our actions are based not on outside events but rather on the stories we make up about outside events. Because we are identified with these stories it is often difficult to see that it's, in fact, a story.

life stories help us organize all the events that have happened to us in our lives


Our life stories are more than just combining the events that have happened into our worldview. Our life stories help us understand the world. We construct narratives around everything that happened by rearranging the memories into coherent events. We organize our memories into a beginning, middle, and an end, in a way that supports the character that we play in our life story. If I consider myself to be a victim, I will organize my memories into a story that makes sense to help me maintain the identity of a victim. If I consider myself to be a resilient person, I will organize my memories into a story that helps me hold onto the narrative that I'm resilient. It's the same if I am the hero or the villain, the good or the bad guy. I organize the events into a story based on the character I play in my life story.

we can rewrite the stories of our past

The Three Dimension Meaning in Life Scale assesses three dimensions of meaning in life: coherence, purpose, and significance. Coherence is the feeling that your life makes sense. Purpose is having direction in life. Significance is the belief that your life has value.


Knowing that we have constructed our stories opens the door to understanding that we can change the story of our lives. We can re-examine the experiences of our past, and we can rewrite new narratives around them. The same event can have multiple interpretations and meanings. For example, I may have written a narrative around something awful that happened to me in grade school. Perhaps the story I've been telling myself my whole life is that I deserved it and that I was an awful person. Looking at the same events from a different perspective might help me see that I was not an awful person, but rather the other person was a bully. Or maybe it's the opposite; maybe the story I've been telling myself my whole life is that I was the hapless victim, and everybody else was awful to me. Upon further inspection, perhaps I realized that I was a jerk when I was growing up. Maybe none of this was anybody's fault, and it was just a matter of things outside our control. There are many different ways to write a narrative around what happened to us.

If you find that the story you've been carrying around with you isn't working, perhaps it's time to rewrite that story.

we can take a new look at our pasts and get a new perspective


Understanding that you can rewrite the story of your past opens the door to being able to begin writing the narratives of your Future Self. Just like you can change perspective on the memories you have of your Past Self, you can also act in a way that supports the narrative you want Future You to be able to write. In other words, envision what it would be like if you had a particular identity. For example, you might imagine what it would be like to be financially healthy or financially responsible. The next step is to realize that you don't have to be financially healthy or financially responsible to act as a financially healthy or financially responsible person would. You can simply act as if.

you can rewrite the story of your life from the perspective of your future self

What story do you want to be able to tell when you're on your deathbed? What can you do today to make that happen?

You get one life; live intentionally.

If you know someone else who would benefit from reading this, please share it with them. Spread the word, if you think there's a word to spread.

Related Money Health® Reading
References and Influences

Baumeister, Roy & Brenda Wilson: Life Stories and the Four Needs for Meaning

Haidt, Jonathan: The Happiness Hypothesis

Manson, Mark: Everything is Fucked

Pennebaker, James & Joshua Smyth: Opening Up by Writing It Down Mindfulness X

School of Life: The Meaning of Life

Note: Above is a list of references that I intentionally looked at while writing this post. It is not meant to be a definitive list of everything that influenced by thinking and writing. It's very likely that I left something out. If you notice something that you think I left out, please let me know; I will be happy to update the list.



About the Author

Derek Hagen, CFA, CFP, FBS, CFT-I, CIPM is a speaker, writer, and coach specializing in financial psychology, meaning and valued living, resilience, and mindfulness.


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