Uncovering Money Beliefs: Your Financial Organization Foundation

As I help my clients create financial organization in their life, I find that it’s critical to understand the underlying emotional reasons that caused the situation. Don’t worry, I’m not talking about regression therapy or hypnosis; I’m not a financial therapist (although there are some good ones out there). This is information I’ve learned along the way from reading some good books and articles on the subject. Simply pull out your notebook or journal you’ll be using on this journey. Think back to your earliest recollections about money. These questions may help jog your memory:

  • How did you learn about money?
  • What was your parents’ relationship to money? Did they have similar values about money or did they argue about it?
  • Did you receive an allowance? If so, what did you do to earn it?
  • Did you feel secure about money growing up?
  • Was your financial situation similar or different from your friends? Do you remember feeling privileged, disadvantaged or the same economically?
  • What’s your major issue with money today? How does it relate to how you experienced money while growing up?

When working with a financial organization client — let’s call her Amy — she completed this exercise. Growing up her her life was stable. Her parents worked hard but money was never discussed. Her father was generous, giving her money when needed but Amy had to ask for it. On the other end of the spectrum, her mother had a hard upbringing where money was tight. Whenever Amy was given money — even after earning it through chores — her mother would comment on how spoiled and ungrateful she was. Fast forward thirty years later, Amy struggles with her relationship with money. She feels others control the money she receives and often feels guilty about what she earns. Once Amy realized how these mixed messages formed the basis of her relationship to money, she could take steps to improve it. Part of Amy’s homework was to read Overcoming Underearning by Barbara Stanny. She’s now exploring how her beliefs about money affected her profession and earning expectations. Need some help uncovering your own beliefs around money? Then try this money belief quiz from learnvest.com.

So, were there any surprises when completing this exercise? How would you describe your relationship to money? How is it impacting your journey to financial organization?

3 Key Financial Organization Questions

Last time we discussed how to begin a quest for financial organization. So let’s get started. The first step, assessing your current situation, will help you create a realistic plan. Acknowledging where you are will impact how you move forward. It also creates the  practices you need to put in place to create that financial organization.

Before changing anything… and I mean anything… you need to take stock. Let’s begin with your starting point. Take out your blank financial notebook, and let’s dig in.

3 Financial Organization Questions

As you write your answers down, take several minutes to reflect. Remember, you’re building the foundation of a financially organized life. What you put in is what you’ll get out of this journey. I suggest giving yourself at least 20 minutes for this exercise, giving yourself the time necessary to contemplate honest and complete answers. 

  1. What are your 3 biggest financial challenges?
  2. What are your top 3 goals for this year?
  3. What are your top 3 financial strengths?

Last year when I helped a couple get more financially organized, they had problems with 1) overwhelming credit card debt with minimum payments they couldn’t handle anymore, 2) a hefty mortgage payment and 3) a income deficit due to the husband being laid off and unable replace his six-figure income.

Sadly, this situation isn’t uncommon; many families were affected by the economic downturn. While this couple’s situation was a combination of forces out of their control, some of the issues were a direct result of how they (mis)managed their money.

In completing this first exercise, they decided their one year goals were: 1) to create a workable plan to regarding the credit card debt and change their habits in managing it, 2) seek a home loan modification, and 3) find alternative income so they could keep their home. Fast forward twelve months. They received a loan modification and rented out spare rooms. While they are still working on improving their financial situation, they have stopped their reliance on credit cards to make up the monthly income shortfall. In essence, they succeeded in creating and maintaining a workable financial plan.

So, how did it go in answering these three questions? Next time we’ll examine your past and uncover your money beliefs.