TIP 21
TELL THE TRUTH ABOUT MONEY
Money, it turned out, was exactly like sex, you thought of nothing else if you didn’t have it and thought of the other things if you did.
What is money anyway? We know it isn’t a magic cure-all—it doesn’t buy happiness, love, or health. It isn’t scarce, even though most people seem to feel that it is. It isn’t a measure of how brilliant or talented you are; there are plenty of poor geniuses and just as many rich idiots.
Money is simply a tool. Like any tool, it can be used for good or evil. The subject of money is emotionally charged for most people. It is still a taboo topic for many, and often people feel uncomfortable even talking about it. The way you handle your money can tell you a lot about yourself. Your spending patterns often reveal your needs and what you truly value.
The first step on the road to wealth is to figure out what your own beliefs are about money. Our beliefs are the source of our actions, and our actions are the source of the results we get in life. So if you want different results in the area of money, it pays to look closely at your personal relationship with it. Here are some fill-in-the-blank questions to get you thinking. Write down the first thing that pops into your head to complete the sentences below:
I believe that money is …
My greatest problem or difficulty with money right now is …
One of the ways I handle money well is …
Financial success means …
If I could change one thing about my relationship with money, it would be …
If I had all the money I could ever want, then I would be …
The biggest change I would like to make with respect to managing my money is …
My parents taught me that money is …
Limited beliefs create limited finances. If you believe you have to work hard to make money, you probably won’t have an easy time getting rich. My client, Miranda, believed that money was evil. She would never have said so directly, but she associated having lots of money with all that she disliked about the country—greed, corruption, fat-cat bureaucrats, and right-wing politicians. I wasn’t surprised to find that not only did she have zero savings, but she had racked up quite a bit of debt and frequently bounced checks as well.
Thinking that money was inherently evil, she naturally avoided having anything to do with it. Once Miranda uncovered her hidden beliefs about money, she decided to change them. She decided that money was simply a tool and that she could use it to do good things in the world. She began to change her behavior. She started paying off her debts, opened a savings account, and even learned to balance her checkbook.
Some of the most common beliefs about money are reflected in common expressions such as “It takes money to make money,” “Money is the root of all evil,” “Money can’t buy you love,” “The best things in life are free,” and “Money isn’t everything.” Write down all the beliefs you have about money, and then write down all the new beliefs you would like to replace them with. For example, “I enjoy my money. I am grateful for money. I use money to live my dreams. I have enough money to be generous and do great things.” Shifting your limited beliefs to expansive beliefs is the first step toward financial freedom.
Sometimes telling the truth about money isn’t easy, but you may have to do it anyway. One client, Jeff, is the vice president of human resources at a large financial services company. Jeff listened to one of my audio programs on attracting wealth. Like most people, he thought that making more money would solve his problems and his credit card debt. In the course of this three-hour program, Jeff discovered that one of his beliefs was that he had to provide for his wife without question. I told Jeff that he had to tell her the truth about their financial situation and determine their financial goals and objectives as a couple. This wasn’t easy, but Jeff sat down and had a conversation with his wife, Mindy, and the truth came out. After some calculations, he figured out that they were spending $2,000 to $4,000 more per month than he was earning. Annually, they were spending $50,000 more than they actually had. At that rate, it doesn’t take long to get into really hot water. They had racked up massive credit card debt and were living far beyond their means.
They sought the advice of a financial planner who agreed to work with them for free as “guinea pigs” for a program to help couples turn around their financial situations. They cut up all their credit cards, stopped being overly generous with friends and family, stopped eating out all the time, cut back on dry cleaning, stopped taking expensive vacations, and started paying with cash for everything. What’s amazing is that Jeff reports they aren’t suffering with this new plan. Instead, it has become a game to see how little they can spend. Every day they sit down together, chart their expenditures, and divide them into three categories:
1. Necessary.
2. Discretionary.
3. Wish we had the money back.
Mindy has made a complete turnaround and is now his biggest supporter in cutting expenses. She clips coupons to get the best deals on groceries. She has always enjoyed cooking, and now they find that eating at home is healthier and more peaceful than eating out all the time. They aren’t depriving themselves either. On their fifth wedding anniversary they treated themselves to dinner at a very expensive restaurant, but, instead of using credit, they felt the tremendous satisfaction of paying in cash. And, because they weren’t going out every night, it was a truly special occasion.
Then, out of the blue, they got an unexpected inheritance of $2,000 from an uncle. Already they have started attracting money. They were tempted not to tell their financial planner of this windfall and go blow it on a vacation, but they decided that they were indeed committed to their financial goals and instead used the money to pay off one of their credit cards. They did all this in one month, and I can tell by their energetic enthusiasm for the process that they will soon be out of debt and on their way to financial freedom.