❝The vast, hidden side of money's story has nothing to do with money the thing. It has to do instead with what we tell ourselves about money.❞ -David Krueger
I pick up the phone to call a friend to ask if I can borrow some money. My palms are sweaty, and my heart is racing; this is uncomfortable. At the same time, though, I need this money because I don't have any and rent is due.
My friend agrees and lends me the money, and I can pay my rent on time, albeit now indebted to my friend. I can't help but imagine how much easier life would be if I didn't have to worry about money all the time.
In fact, part of my money story became the idea that money makes life easy. Wanting an easy life, I set out to make as much money as I could get my hands on.
Twenty years later, I make more money than I ever thought possible, and yet life isn't easy. Sure, the level of difficulty has changed, and the ways in which life can be difficult have changed, but I've learned that an absolute statement that more money will always make life easier has held me back.
This was part of my money story, and my money story caused me to pursue education, interests, and hobbies only if they were to get me more money. I avoided more creative aspects of my life to blindly follow a partial truth.
Reexamining my money story has helped me become more aware of why I make my choices. Perhaps you've got stories you tell yourself that helped you at one point in your life but may no longer be helpful. If so, rethinking your money story can be powerful.
MONEY SCRIPTS AND NARRATIVES
We've all got stories and beliefs that we tell ourselves. These beliefs are generally about how the world works. When these beliefs are about money, you can think of them as Money Scripts. Money Scripts, and most of our other beliefs, are generally formed in childhood as we're growing up trying to figure out how the world works. Our beliefs can change, of course, but it takes a pretty emotional event to get us to change them.
In childhood, you were kind of like a little scientist. In an attempt to understand the world around you, you created hypotheses, or little rules about how the world worked. Think of these as if-then statements. For example, you may have created an if-then statement along these lines:
If people talk about money, then they get angry and raise their voices.
Then you get to work testing your hypothesis. When you notice that pattern holding, it makes your belief stronger. If you notice that pattern is not holding, then you alter your belief or otherwise try to make what you observed match what you believe.
The problem is that we have immature minds as children and can't fully comprehend what's happening. On top of that, we only have a sample size of one because we only get to see how this works in our own family system.
As you gain more experience, your collection of beliefs grows, and you start to develop narratives around your beliefs.
Think of your collection of financial beliefs as your money story.
Your money story is the story you tell yourself, mostly subconsciously, about what money means to you, what you're worth, how to use money, what money says about you, and so on. It's like a little companion who follows you around, telling you what to think about money and its role in your life.
Your money story contains nuggets of truth. For example, part of your money story might be that money can make life easier. Indeed, it is very easy to imagine people whose lives would be greatly improved with a higher income or more money in savings. All else equal, more money means people can pay for unexpected emergencies or not have to worry about whether or not something is affordable.
Because parts of our money stories are true, you can start to feel like our entire money story is true. But our money stories sometimes get embellished. Sometimes the stories become absolutes using words like always and never. For example, "money can make life easier" becomes "money always makes life easier."
When we start to blindly live our money stories, more and more narratives from the untrue side of the equation make their way into our lives.
When our money stories lie outside of reality, what we notice on a day-to-day basis won't align with our narrative. Life can become chaotic. Despite that, we act out our money stories without thinking about them and as if they are fully true. We become identified with our stories, so much so that it can feel like money is in control of us instead of us being in control of our money.
THE MEANING OF MONEY
Money itself is pretty simple. Economists define money as a store of value (it can be saved and used later), a unit of account (it tells us how much something is worth), and a medium of exchange (it can be used to transact with others). Money as money is something that can be run through equations. We can find optimal strategies for saving, investing, giving, and spending.
Money is pretty simple. But simple isn't always easy.
What makes money difficult is the fact that we attach meaning to money. We give it emotional value. We try to use money in ways it was never designed to be used.
We assign meaning to money as part of our money stories. One person's money story might be that money means freedom. There is some truth to this. If you have no money, then having any money gives you more options. This lies in the intersection of money stories and truth. And yet it has the potential to spill outside of the truth zone.
It would be one thing if everyone assigned the same meaning to money, even if some partial truths and untruths were involved. Things get more complicated once you realize that everybody assigns a different meaning to money.
We all assign a different meaning to money, and there are partial truths and untruths to all of our stories. No wonder money is complicated!
MONEY STORIES AND MEANING IN LIFE
Our money stories are an important part of living a meaningful life. According to Michael Steger, meaning in life comprises three pillars: purpose, significance, and coherence. Purpose represents direction or aim and gives us something meaningful to do with our time. It includes the role money plays in our lives via financial purpose. Significance represents feeling valued in the sense that life is worth living. Expressing our personal values helps increase our sense of significance.
Our sense of coherence is about how we make sense of our lives. Our sense of coherence is about the stories we tell ourselves. It makes life predictable. The opposite of life being predictable is life being chaotic. When we don't have a strong sense of coherence, nothing makes sense.
Our money stories feed our sense of coherence. If things make less and less sense with money, then it may be time to address your money story and consider writing a new one.
REWRITING YOUR MONEY STORY
It's difficult to let go of old stories because they've been with us for so long. For most of us, these stories are subconsciously lying underneath conscious awareness. The biggest bang for your buck is understanding that you have a money story. That's step one.
Examining previously unexamined money stories takes some self-determination, but it is worth it. Once you understand your existing money story and how events in your life have contributed to your story, your story will have less power over you. Becoming mindful of the story you are telling yourself as you make choices creates intention. It helps you live life on purpose instead of being on autopilot.
Because you are the author of your money story, you get to decide which parts of your money story you will keep and which parts you will rewrite. You can ask yourself what story you're telling yourself at any given moment and ask if that belief is helpful or unhelpful. You can challenge your automatic thoughts and question your money story.
Your story was written with your best interest at heart. It's just that we often hold on to these same stories and beliefs long after we've left the situation in which the story helped us.
Everyone has a money story that has been written over their lifetime. These stories contain some truths, partial truths, and untruths that no longer work for us. Our money story acts as a guide, telling us what money means, how it should be used, and what we deserve. If we don't examine these stories, then they have control over us, and only by examining our money stories and understanding the meaning that we've assigned to money can we begin to transform and write a better money story.
You get one life; live intentionally.
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References and Influences
Hagen, Derek: Your Money, Your Values, and Your Life
Haidt, Jonathan: The Happiness Hypothesis
International Monetary Fund: What Is Money?
Kinder, George: Seven Stages of Money Maturity
Klontz, Brad, Rick Kahler & Ted Klontz: The Financial Wisdom of Ebenezer Scrooge
Krueger, David: A New Money Story
Krueger, David & John David Mann: The Secret Language of Money
Manson, Mark: The Subtle Art of Not Giving a Fuck
PositivePsychology.com: Meaning and Valued Living Masterclass
Steger, Michael & Pninit Russo-Netzer: Meaning360
Urban, Tim: What's Our Problem?
Vos, Joel: Meaning in Life
Ware, Bronnie: The Top Five Regrets of the Dying
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.