Did you know that a whopping 78% of Americans live paycheck to paycheck, regardless of income level? It’s a startling statistic that underscores the importance of understanding our relationship with money and the money scripts that are running the show. One key factor in this dynamic is how we are raised. From how we see our parents manage finances to the messages we receive about money growing up. Both shape our financial habits more than we might realize. So, let’s delve into how our childhood experiences impact our money mindsets and what you can do about it.
Understanding your money mindset
Before we dive into the depths of our money mindsets, let’s take a moment to define what they are.
- Money Scripts: Money scripts are deeply ingrained beliefs and attitudes about money that we develop early in life, often influenced by our parents, caregivers, and cultural upbringing. These scripts shape our financial decisions, behaviors, and attitudes toward money throughout our lives.
- Financial Habits: Our money mindsets manifest in our financial habits – how we earn, spend, save, and invest money. Whether we’re conscious of it or not, our upbringing plays a significant role in shaping these habits, influencing everything from budgeting and investing to attitudes towards debt and wealth.
- Emotional Connection: Money is deeply intertwined with our emotions, values, and sense of identity. Understanding our money mindset allows us to recognize the emotional reasons for our financial behaviors and make conscious choices that align with our values and goals.
Understanding your money mindset, such as the money scripts, financial habits, and emotional connection to money, is a great way to start understanding if your financial habits are helping or harming you and how to fix them.
How childhood has influenced our money mindset
Now, let’s explore how our upbringing shapes our money mindsets and financial habits.
- The Family Financial Blueprint: The family environment plays a significant role in shaping our money mindset. Whether you grew up in a household where money was openly discussed or one where it was a taboo topic, family dynamics influence how you will perceive and manage money as an adult. If nothing else, it’s a reason to give yourself a break if you’re not where you want to be with your finances, but ultimately, realize that the power is with you to change it.
- Cultural Influence on Money Attitudes: Cultural norms and values around money vary widely, influencing our attitudes towards wealth, success, and financial responsibility. Whether you come from a culture that emphasizes frugality, entrepreneurship, or consumerism, these beliefs ultimately shape your financial behaviors and priorities, leading to your current-day results.
- The Impact of Childhood Experiences: Financial struggles or instability during childhood can lead to deeply ingrained beliefs about money scarcity. Conversely, positive financial experiences like receiving an inheritance can shape attitudes toward wealth and abundance. Our emotional experiences around money during childhood, whether it’s feeling secure or anxious, carry over into adulthood and run the show unless we actively counteract them.
- Example: John grew up with parents who were immigrants and worked incredibly hard to provide a better life for him. Witnessing their sacrifices instilled in John a deep respect for money and the value of a strong work ethic. However, it also made him financially risk-averse – he prioritizes saving heavily over investing or taking calculated risks. His goal is move his money mindset towards a more investment-focused approach.
Childhood and upbringing play a significant role in shaping your financial habits and attitudes as an adult today. By understanding the influence of family, culture, and childhood experiences on your money mindset, you can empower yourself to unravel any limiting beliefs and adopt healthier financial behaviors. It’s never too late to reassess your relationship with money and take steps toward a healthier money mindset.
How to create a healthy money mindset
Now that we’ve explored where your money mindset comes from, let’s discuss how you can cultivate an even healthier money mindset and work toward your financial goals.
- Reflect on Your Money Story: Take time to reflect on your own upbringing and personal experiences with money. What messages did you receive about money growing up? Was it openly discussed or hushed away as taboo? What were common sayings or beliefs about money in your household? How have these messages influenced your financial habits and behaviors today as an adult? Get your journal and begin your process of self-reflection.
- Identify your Limiting Beliefs: Identify any limiting beliefs or negative money scripts that may be holding you back from achieving your financial goals. One of the fastest ways to do this is to write your financial goal on a piece of paper, then under it, write all the reasons you don’t think it’s possible for you. There, you have your list of limiting beliefs that have been hiding out in your mind.
- Educate Yourself: Empower yourself with financial knowledge and skills to make informed decisions about money. Whether it’s reading books like this one, attending workshops, or working with a financial coach, ongoing education is key to building confidence and competence in managing your finances and starting to rewrite your deeply ingrained money scripts.
Reflect on your upbringing, identify your limiting beliefs, and educate yourself. These three steps can get you moving towards a healthier money mindset to achieve your financial goals!
The bottom line
Money mindsets are formed in childhood and influenced by your upbringing, culture, and personal experiences – but they don’t have to dictate your financial future. By understanding the influence of your past on your present financial behaviors, you can empower yourself to take proactive steps to create an even healthier money mindset, one that aligns with and supports the achievement of your financial goals. Remember, it’s never too late to rewrite your money story and embrace a mindset of abundance, empowerment, and financial well-being. To get support with improving both your finances and your relationship with money, check out The Witches of Wall Street here.
Frequently Asked Questions (FAQs) about how upbringing shapes financial habits
Q: How can I change my money mindset?
A: Once you’ve identified your negative beliefs or scripts about money that may be holding you back, the next step is to challenge these beliefs and replace them with positive affirmations that align with your goals. Pretend you’re a character in the TV series ‘Suits’ (or ‘Ally McBeal’ for 90s kids) and argue like you’re in court for your new truth.
Q: Can I overcome the influence of my upbringing on my money mindset?
A: Absolutely! While your upbringing shapes your initial money mindset, you have the absolute power to rewrite your money stories and create even healthier financial habits that align with your goals and values today. A belief is just a thought that has been repeated so frequently that it’s now accepted as truth. It does take awareness, effort, and persistence, but it’s entirely possible to change your money mindset.
Q: How can I teach my children healthy money habits?
A: Lead by example and involve your children in age-appropriate discussions about money. Encourage saving, budgeting, and responsible spending habits from a young age. Foster open communication about financial matters within your family and be aware of what common money sayings may have been passed down to you that you would rather not continue; for example, money is easy to spend but hard to make, or money is the root of all evil.
Laura Tynan is the founder of The Witch of Wall Street, a personal finance and investing community, where women are shown how to manage, multiply and manifest money, using simple strategies. Laura holds a BSc Hons in Finance, is a Chartered Accountant, and is certified in EFT Tapping, Breathwork, and RRT. She has been recognized by the Financial Times as a Top 20 Future Female Leader and by Yahoo! Finance as a Global Champion of Women in Business. She is a multi-award-winning speaker who has spoken at, and been featured in, Forbes. Laura hosts The Witch of Wall Street podcast and is the author of the personal finance and investing book for women, by the same name, which is available now on Amazon.
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