CHAPTER 6

Adjusting Your Money Mindset

Mindset is defined by the Oxford Dictionary as: “The established set of attitudes held by someone.” A money mindset is then the established set of attitudes about money held by someone. We all have our own money mindset. If your money mindset works for you by establishing a set of positive beliefs, it becomes self-empowering. If your money mindset is rife with negative messages, it can lead to a lifetime of being a slave to one’s money history. Altering your money mindset to be positive and constructive will feel like a fresh breeze on a warm night; you feel alive and possess something wonderful, empowering, and precious. You’ve discovered that whatever you once believed doesn’t have to belong to you, and you can add it to the list of lessons learned the hard way. You have discovered control over self, instead of existing on autopilot.

As you re-create your life, think of yourself as the sculptor, armed with a chisel to chip away all the unnecessary material to reveal a life that is not only affirming but self-loving. You can become the evangelist for money sanity and share your newly found understanding with those you love.

In this chapter, you will see examples of money mindsets and their impact. You will also explore long-term versus short-term mindsets and the all-important “how to begin” to shift your mindset to create more satisfying results, and look at a few examples of living richly. You will also have the opportunity to continue to create the foundation of what makes you feel rich. Take a few good breaths and be prepared to vanquish the internal foes that are standing between you and your ability to live your gloriously meaningful values.

Examples of Money Mindsets That Need a Second Look

Without the slightest conscious idea, we carry with us beliefs, born out of experience, that bend our thinking into alignment with what we come to know as “normal.” We don’t think about our money mindset; it’s just there. Here are a couple examples of money mindsets that created money misery and conflict and the adjustments that had to be made.

Casey, a 32-year-old single woman, sought help to work out some cash flow issues. It soon became apparent that there was more to it than helping her create a system.

“I am paying off my law school loans and I never seem to have enough money to live. I work a lot of long hours and I could use your help in guiding me to make some adjustments.”

“Great. Tell me a little about you, your situation, and whatever else you believe would be helpful for me to understand.”

“I get paid a salary and bonus. The salary is good, but the bonus is what helps me catch up and pay off my cards. The bonus is once a year, paid in January, but from the looks of things, I don’t know how I can make it until then. Between the school loans, monthly bills and credit cards, I feel really squeezed. Plus, I never know what the bonus is going to be and that just adds to the pressure.”

“Let’s talk about options. Do you have savings? Do you get any support from your family?”

The word family set off an unexpected maelstrom.

“Support from my family? I wouldn’t even know how to ask them. Money was always a super-secret thing. It was never spoken about. I mean, we lived okay, but, I don’t think I can go to them about this. And no, I have no savings, just kind of going hand to mouth until bonus when I pay everything off and get straight with the world. My biggest worry is if the bonus is less than last year!”

“Casey, help me understand. What would be the ideal outcome for you here, other than us waving a magic wand and making all the bills disappear? What do you value most? What must happen for you to feel secure?”

“Value most? Well, after I get my January bonus, I would have answered, ‘A trip to St. Bart’s,’ but here we are in July and my answer is, peace of mind that I am not destroying myself. I work too hard to not have security. That must happen!”

Casey’s story was also pretty typical. Parents who don’t talk about money, shroud the issue in mystery. Instead of fostering healthy communication about savings, security, and wise spending, they leave children to their own devices and many times, there is a lack of valuation or real focus, because the topics have always remained obscure.

After a crash course in money basics and budgeting, Casey was able to see that the idea of just floating along this way was a river to misery and disaster. Casey created her cash flow, and together we devised a plan that included moving to a less-expensive apartment, canceling a planned vacation, and restructuring her debt. Casey decided that in order to live to her values and build security, she was going to put a moratorium on spending for all nonessential items and set a target to build an emergency fund to cover nine months of living expenses and then enroll in the firm 401(k) plan.

Pam and Henry, in their mid-50s, after putting their two children through college, were in desperate straits. They both earned decent incomes. Retirement was on their minds but the gap between their current savings and their cash flow needs was pretty vast. In reviewing their spending, it became obvious that their discretionary spending was out of control. Henry liked to play golf and Pam hadn’t met a sale she didn’t like. Henry, with a look of bitterness, said, “You have filled up every closet in the house with clothes, and yet it seems there is no end to the purchases.” Pam’s retort was just as bitter: “You can spend all that money on golf. You buy all the newest equipment and the carts, and greens fees are a fortune. So don’t tell me about overspending.”

“Let’s take a step back, you guys.” I said. “You’re either in this together, or you’re not. Tell me, Pam, What worries you the most about your financial life?”

Pam paused. “What will happen if either of us loses our job? We’re sunk. How can we ever think of retiring? We can’t save beyond our modest contributions to our retirement plans. I feel like we’ll have to work forever and never enjoy our children or grandchildren. I cannot be a burden to my children. Oh, this is terrible!” With that the tears began.

The next part of the conversation centered on their money history. Henry grew up in a fairly affluent family that broke apart in divorce and dysfunction. He believed that spending money on his pleasures was something that was just the way it was supposed to be. Pam’s family was different in that they struggled more financially, and her mother was very big on taking advantage of sales. So whenever the sign went up, purchases were made. Pam was aware that other families had more, but money was never talked about. Her earliest memories were about shopping and her mother’s “nervousness” to buy when items went on sale. It all made sense.

“It seems like you’ve assimilated beliefs growing up that you’ve maintained without challenge. Do you believe they still work for you?” I asked.

Henry snorted, “Obviously not. But what can we do about it? It’s who we are.”

Meeting Henry’s eyes, I replied, “It’s who you both have been. Whether you continue that way is a choice.”

Long-Term vs. Short-Term Money Mindset

Our money mindset is reflected by our actions; it’s not something we even think about. To save or to spend, to think about today or tomorrow, hits our brain synapses in a flash. We know what we want. Have you ever stood at a checkout line at a grocery store and spied your favorite candy bar? A positive health mindset ignores the candy bar in favor of a more nutritious alternative. A mindset that heeds the subconscious instinct will wind up eating the candy bar while you’re walking out of the store. Do you see the analogy? A well-conceived money mindset is aligned with your real values, but one that operates without consideration and purpose will constantly make decisions that work against your true values.

Think of it like a chess player. You look for the long-term result. That is your mindset, and you are willing to sacrifice a pawn or two to capture your opponent’s king. A strong, present, and aware mindset is like that of the successful chess player, willing to sacrifice a Milky Way bar for long-term health or maybe for that piece of amazing, fine Jacques Torres chocolate you received as a gift, waiting at home. Hmmmm… What to do? What to do?

Does the term delayed gratification make you queasy? You might ascribe to the school of thought that says, “I may die tomorrow, so why put off for tomorrow what I might enjoy today?” One of my favorites, “I live in the moment,” is the supreme cop-out and actually abuses the meaning and intention. To live in the moment is to be aware of yourself, everything from your breath, to your feet on the floor, to the lightning-quick thoughts racing through your brain. To be in the moment means to experience the moment. Transcendental Meditation talks about the idea of awareness of your thoughts and the nonattachment to those thoughts. Being aware is different from acting on whims and falling prey to modern marketing techniques.

Making Adjustments to Your Money Mindset

I was stunned upon seeing advertising on Facebook for items I had been looking at on another site. “Well, look here. How the heck did they know I was just looking at those running shoes?” Not only are we in a battle with our internal broken mindsets, but external foes are hooked into every Website or search engine inquiry we make, tracking our tastes, wants, and desires.

It is not a helpless battle. In fact, it’s highly winnable if you monitor and adjust your mindset, and apply techniques intentionally structured to help you get through the inevitable tests. Remember: The goal is to match your values with your beliefs and behaviors that become your new and improved mindset. There is no switch to turn or card to activate, it’s your decision, your actions, and your life.

Look around. You know where you are; you’re here. After all the work we’ve done thus far, I think you have a pretty good idea of where there is. There is not a place, but a mindset matched appropriately with positive actions. Here is where you go from—not to. The journey of examining your current money mindset, your habits, and your awareness, and replacing what is working against your self-defined musts, is not a straight line—not one size fits all, not throw the switch on autopilot. It is a weaving, twisting, bumpy, and sometimes-harrowing experience of self-discovery and growth toward a more gratifying life.

If you have lived any reasonable amount of time believing and acting under a specific set of thoughts that have caused dissatisfaction and pain, well, it’s time to consider the pain of change versus the pain of remaining as you are. Building satisfaction comes from awareness of your growing competence. Think of a toddler pulling herself up on shaky legs, only to go crashing down. While caught up in the sheer adorableness of the situation, you might have missed the fact that failure happens, until such time as competency is achieved. The baby stands, falls, stands, falls, stands, takes a step, falls, stands, takes a step or two, falls—you get the picture. Each time the child falls, words of encouragement and support assist her in getting back up and trying again, regardless of the six previous attempts that resulted in face plants. Within a short time this miniature person is flying around the house on two pretty self-assured legs. It’s no different with anything new you seek to master.

Like learning an instrument or any other skill, it takes work, practice, failure, and the decision to keep going because the final goal is that glorious sound that comes out when success is achieved.

To get there you need the following:

1.   A rational set of goals. The goals can be big and audacious, but rational, too.

2.   The reason why this must happen. Without your reason—your values—it won’t work.

3.   Knowledge commensurate with the challenge. You need a commitment to learning that which you don’t currently know.

4.   The willingness to fail temporarily. Everyone fails, but resilient people get up and try again.

5.   An overriding belief in your success. If you don’t really believe it, why do it? Besides, your chance of success is less than remote.

6.   Love and respect for yourself. If you can’t love yourself, there are bigger problems than money.

7.   A sense of humor. It helps when missteps occur. We take ourselves way too seriously. A little humor can go a long way to shake off the “I’m a failure” inner rant.

8.   Determination: getting past the negative self-talk, the external pressure, and the temptation. It’s hard enough making changes, but beating yourself up en route is just unnecessary self-destruction.

Change is evolutionary by nature and practice. It’s rarely easy, but what is worthwhile, important, and necessary is worth the effort. Tripping on a step is easy (trust me: I know this), making life-altering amendments to your thoughts, beliefs, and actions is a tad more challenging.

Once you decide, and I mean really decide, that the track you are running on is heading for the cliff and that without a change in course, the outcome will not be pretty, you can begin to build, bit-by-bit, the components necessary to effect real change.

Begin with belief. Make it a strong statement. For example: “I will live debt-free and create security for myself and my family.”

Test that belief against your current reality. “Right now, I am burdened with debt, but by careful consistent and meaningful actions, I can eliminate the debt and begin to build financial security.”

Create small steps that lean in a more positive direction, including the necessary support. “I will pay down my debt every week by taking 5 percent of my income and putting it toward my debt. Further, I will cut my discretionary spending and use those savings towards debt elimination.”

Spending decisions are constant, and buying opportunities are ceaseless. What steps can you take to limit the decisions or eliminate the pressure? Dissect the specific steps necessary and set your plan in motion.

Monitor your progress constantly. Keep a log of your challenges, your decisions, and your outcomes. Celebrate what went right; if the outcome wasn’t ideal, ask yourself what steps might have brought about a different (better) result. Self-punishment, blame, shame, and negativity are pointless and counterproductive. Haven’t you been beating yourself up enough all these years?

Change is about starting and stopping. In order to support growth and move closer to your values, you need to determine what you need to start doing different, with the firm understanding of why and that same firm understanding of what you need to stop doing. Both those actions bring you closer to your goals, your security and your dreams of a life aligned with your highest values. Remember your money billboards.

Deserving Richness: Examples of Living Richly

There’s a difference between being rich and living richly, just as the definition of wealth differs depending on the point of view. There are those who live simply, without many possessions to demonstrate their power, prestige, and wealth. The values they possess are far more important than the car they drive, and whether or not they own a private jet or yacht, but rather what they do in and for their family and the world.

Ted and Jackie were considering retirement when we met. Ted worked for a well-known tech firm and earned a very substantial income, including stock options and generous bonuses. Ted and Jackie lived simply in a nice home in a nice neighborhood. Both of their daughters worked part-time jobs during high school and over the summers to provide money for books and sundry spending during college. After reviewing their financial position, I asked what they want their retirement to look like. What was important to them, to make their lives worthwhile, important, and meaningful?

They looked at each other, and Jackie spoke. “We want to become docents in the National Park System and give tours, live in cabins and tents, and be in nature.”

Ted spoke next, noticing my look of surprise. “Yes, I know we can afford to buy vacation homes and travel around the world, but honestly, we just want a simple life. We have put away enough for our daughters’ college and some left over to pay for a wedding. Our financial responsibilities are taken care of. We just want to live, breathe clean air, and enjoy our time together.”

Values.

Sam and Trish are a multigenerational couple with a young child. Sam, having been divorced for many years, met Trish, and though their ages were pretty dissimilar, their values were not. Sam, who worked hard and lived frugally, was thinking about retirement. When I asked Sam about retirement he told me of his years in the Peace Corps, working with families without adequate shelter, without clean water, and with no medical facilities at their disposal.

Sam said, “I have a roof over my head, my family, and clean water. I don’t need or want more stuff in my life. I love spending time with Trish and our son. Retirement will afford me that opportunity and my lack of financial burdens has allowed me to live without worry.”

Values.

Anna, a widow, raised three boys and, as she puts it, a husband. She has eight grandchildren and gets great joy from family get-togethers. She never misses a soccer or baseball game, except when there are conflicting game times, and has a wonderful relationship with her sons and her daughters-in-law. She’s not wealthy, but she describes herself as the richest woman in the world. She volunteers three days a week at various organizations that fills her with accomplishment and joy.

Values.

Steve, age 34, has paid off his school loans and has no debt. He works hard and even has a second part-time job that allows him to save a little more. He lives modestly and is preparing for his upcoming wedding. Steve and Emily both love to go camping and, rather than spend big bucks on a trip to Hawaii, they’re heading for the hills, with backpacks and tents, to hike parts of the Appalachian Trail. They planned an outdoor wedding in the woods and invited their family and friends to attend wearing appropriate attire. (Bug spray will be provided.)

Values.

What do you care most about?

Beginning the Work to Live Your Own Rich Life

Benjamin Franklin, at age 20, created a system to work on his character and what he valued in being the best person he could be. His list of 13 values included temperance, silence, order, resolution, frugality, sincerity, moderation, humility, and tranquility. Franklin would select those traits and actively work on them for periods of time, exercising his will and training his ability to live to his credo and goals. Benjamin Franklin believed in actively working on improving himself by focusing on what he valued.

Let’s exercise our internal Bens by thinking about and developing your values: In Worksheet 6-1, you’re going to explore your thoughts about a rich life. You will want to review your values worksheets from Chapter 3 and Chapter 5. In addition, you want to review the work on needs versus wants.

WORKSHEET 6-1: WHAT MAKES YOU FEEL RICH?

Define the riches in your life. In other words, what and who do you value above everything?

•   Do you feel rich when you have the clarity to make decisions (Yes/No)? Why?

•   Do you feel rich when you have options and choices (Yes/No)? Why?

•   Do you feel rich when money is not a top-of-mind worry when something unexpected happens (Yes/No)?

•   Is someone else’s (apparent) wealth a factor in whether you feel rich (Yes/No)? Why?

•   How do you deal with the feelings of needing immediate gratification and reward: (Yes/No)

Do you cave?
Do you compromise?
Do you fight off the “hunger”?
Do you need a reward for resisting the urge?

Fill in the following with short answers:

I feel in control when	.
I value more than anything else:	.
I am at my best when	.
I have experienced success in my life when	.
I felt rich when	.

Write an example for each of the above short answers you completed. Tell the story behind your answer. For example, when you were at your best, what were the circumstances, how did it happen, how did you feel, why, etc.? Be as explicit and complete as possible. Write the story of your richness and successes.

Can you see that your money mindset is the bedrock or underpinning of your success? You have experienced success in various ways during your life. It doesn’t matter if you are a CEO or work on a farm, you have tasted and experienced success in some form along the way.

Consider what you have learned over your lifetime. Apply the success stories to a successful money mindset. Think needs first: What do you need in order to have the safety, security, and basic attributes that will lead you, step-by-step, to your rich life?

Can you see how distractions created by “things,” experiences, lack of knowledge, money history, insecurity, and judgments can impact your money mindset and cloud your vision?

Can you see a path to a positive money mindset?

In the next chapter we begin to create a support structure, review your numbers, and begin to make your money plan. The idea is to apply your well-crafted values to the numbers and start moving forward. Onward—strongly!