The Role of Family Experiences with Money

Financial decisions are often viewed as personal choices or self-discipline. However, each financial decision has a deeper and more connected story behind it — the family and environment in which a person was raised. Whether a person was raised by a parent who took care of every dollar, or by someone who gave freely of cash, the beliefs formed in childhood continue to affect adult financial behavior. Even children from low-income families experience money lessons long before (organic financial education) they can conduct transactions of their own. In many low-income family situations,financial conversations are often full of stress and anxiety. Money is more commonly associated with scarcity, survival, and challenge instead of opportunity, expansion, or growth. These lessons, received often without direct instruction, became beliefs: Money is hard to make, money comes easily to “other” people, or being financially secure is almost impossible.

These ingrained beliefs have a deep impact on a person’s ability, not only to generate wealth but also, more importantly, to maintain it in their future. Although growing up in poverty or low income can sometimes induce an intense desire to become successful, that same upbringing can create existential fears ( especially fear of losing all and also fear of success) and insecurities. The many who come from poverty who make it to a high level of financial success can find that eliminating the final hurdle is more than achieving their desired success — the challenge will be to maintain it. The history books are filled with stories of self-made millionaires who lost all their wealth. An average person can self-sabotage true wealth; they can “blow it” by throwing money away frivolously, or making poor investments. More subtly, tremendous distress can originate simply from feeling that they don’t belong in the wealthy world that they have become accustomed. Many people will subconsciously recreate the financial insecurity that was so constant in their life before, not because they want to go bankrupt, but because their subconscious is conditioned to see financial struggle is the “normal” experience in their life.

Psychologists often refer to this experience as the “wealth thermostat”. Just like a home’s heating system increases your temperature when the temperature gets too high or too low, people’s financial behaviors adjust to keep them at a certain level of wealth. Without any conscious awareness, those who come from scarcity usually find some way to return to it, even after having some success. The emotional aspects of coming into wealth cannot be ignored. For someone who grew up and spent most of their life concerned about paying their bills, having a substantial amount of money will often create all sorts of guilt, fear or loneliness. They might feel pressure to spend their money, even if not living within their means, as a way to feel worthy; give their money away in search of belonging; or take extreme financial risks in an effort to feel “normal” again. Yet this cycle is not a given and can be changed. Financial literacy, therapy, mentorship, and intentionally changing one’s money mindset can foster transformation. Through changing one’s emotional relationship with abundance in addition to understanding financial management, individuals are able to move beyond the constraints of their upbringing. At the end of the day, where someone comes from has tremendous power over their monetary relationship with the world. While a difficult start in life is a strong motivator, true financial stability occurs when an individual changes their beliefs and their bank account. It is not enough to just earn more money; an individual must also learn to be someone who is comfortable enjoying abundance.

Think…

Valentina C.