What is Your Money Story? (And How You Can Rewrite a New Money Story by Changing Your Money Mindset)Jun 20, 2022
What is your Money Story? Your Money Story is your personal story that you have learned about money since childhood. It shapes and forms your beliefs about money, whether consciously or subconsciously. You can feel and think differently about money than a friend, family member, spouse or colleague simply by how your Money Story has influenced you.
What is your Money Mindset? Your Money Mindset is your current attitude and belief about money. I would like to review how you can identify your Money Story, so that you can recognize that it may have a good or poor effect on how you view finances. The concepts of Scarcity Mindset and Abundance Mindset will be reviewed as well. You then can learn to rewrite a New Money Story, by changing your Money Mindset.
So what are some questions that you can ask yourself to define what your Money Story is?
1) How did you view money as a child while growing up?
2) What’s the first memory you recall in regards to money in your childhood?
3) Was money something you never really had access to? Or if you just asked your parents for money, would they give it to you?
4) Did you get an allowance? If so, was it “for free”, or did you have to complete chores, or have good grades to earn an allowance?
5) Did you get money as gifts from family members growing up? What did you do with it? Did you always buy a new toy, or did you save it? If you saved it, was it for something in particular, or was it just in a generalized savings such as in a piggy bank or bank account?
6) What age were you when you had your first job? Did your parents encourage you to work or require you to work, or did you want to work?
7) What did you do with your income from your first job?
8) Did you hear your parents argue about money? How did this affect you?
9) Did you argue with your parents about money?
10) Did you hear your parents discuss their finances openly?
11) How did you feel when money was discussed? Was it a casual conversation, or a serious, or a tense conversation?
12) What’s something that your parents did with money that you think was wise and you would like to do as well?
13) What’s something that your parents did with money that you think was a poor decision and you would like to avoid?
14) If you did have two parents growing up, did they both work? Or was one a stay-at-home parent? Who made the financial decisions in the family?
15) Growing up, did you have more or less money than your friends? How did this affect you?
16) Did you see your parents give away money to others?
17) Did your parents pay for a portion or all of your college? If so, did you know they were going to do that ahead of time?
18) Do you believe you can only earn up to a certain amount of money?
19) Is there a minimum dollar amount in your brain that someone needs in order for you to consider them to be “rich”?
20) What are your beliefs about those who are “rich”?
21) Do you believe that you can be wealthy?
22) Do you believe that you can reach financial independence?
Now think of how all of your answers have affected your view on money over the years and currently. What are some of the positive effects that these answers have had on your Money Story? Perhaps you were taught by your parents to save a lot of your income. Perhaps you were taught that you need to create a plan for your finances. Perhaps you were taught to donate some of your money to others. What are some of the negative effects? Perhaps your parents modeled the behavior of spending all of their income, and now you do that as well. Perhaps you were told that you can never earn more than a certain threshold, or that in order to earn more, you have to work many long hours.
Scarcity Mindset vs. Abundance Mindset
Next, let’s see if you have a Scarcity Mindset about money or an Abundance Mindset. If you have a Scarcity Mindset about money, you think that there is never enough of it. Some adjectives for a scarcity mindset include finite, fixed, confining, and uncreative. On the other hand, if you have an Abundance Mindset about money, you think that there is always enough. Some adjectives for an abundance mindset include sufficient, creative, satisfied, and grateful.
Here are some scarcity and abundance mindset beliefs that some PAs may have.
Scarcity Mindset Beliefs:
- I don’t have enough money.
- I can’t afford that.
- The amount of money someone has correlates with the amount of hours they have worked.
- I’m not good enough for that PA job, which is why they didn’t hire me.
- I’ll never be able to pay back all of my student loans.
- My low net worth makes me have low self-worth.
Abundance Mindset Beliefs:
- I have enough money.
- I can afford anything that I value.
- The amount of money someone has is not directly correlated with the amount of hours that they have worked.
- Although I wasn’t hired for the job that I applied for, I’m a great PA, and another opportunity that is meant to work out for me will open up.
- I’ll create an actionable plan to pay back my student loans.
- My net worth (even if it’s low) does not define my self-worth.
Some of you may be able to identify that you have a Scarcity Mindset or an Abundance Mindset when it comes to finances, and some of you may be like me, where you have a little bit of both types of thinking, depending on the exact topic. So now that you’ve recognized that you have a Money Story that has been ingrained in you since childhood, and how that Money Story helps to determine whether your Mindset about money is that of Scarcity or Abundance, let’s review tools to use to help shift your Scarcity Mindset to an Abundance Mindset so that you can rewrite your Money Story for the future.
Determine if your beliefs are actual facts, or fictional thoughts.
For example, do you think you’re “bad with money”? Perhaps the fact is that you are actually a great saver, but just need to educate yourself on how to invest the money. Do you think you’re “broke”? Perhaps the fact is that you actually do have enough, but you’ve allowed lifestyle creep to enter your life, causing you to spend every extra dollar you’ve earned with each raise or bonus over the years. Consider whether your thoughts and beliefs about money are actual facts or not.
Become responsible for your money, including the past choices that you’ve made, and the future money you will earn.
Some PAs may have had the thought of “I’ll never be able to pay off all of my student loan debt, so I’ll just make the minimum payments and die with them”. Well, you chose to go to PA school and (likely) accumulate the student loans in the process, so you should take responsibility for the debt, and create a game plan to pay it off!
(Disclaimer: with the current federal student loan forbearance due to the COVID pandemic, you may elect to hold off on paying your federal student loans at this time.)
Additionally, consider your future earnings. What is your game plan for that money? Is it to pay off debt, invest, save for your child’s future, etc.? Or do you not really have a plan, but once the money hits your account, you decide to buy a new thing you’ve been wanting? Assess your financial situation, and create a plan for your future dollars as well, otherwise it is so easy to spend all the money that hits your account. (Pro tip: If you can save a portion of your income before it even hits your bank account by having it deposited directly into an account such as a retirement account, you likely won’t even miss that money, and you won’t be tempted to spend it!)
The main goal of this blog and podcast is to educate current and future PAs about finances so they can achieve financial independence. I hope you find PA the FI Way a valuable resource, but there are so many other amazing podcasts, books, and blogs with tons of valuable information out there. I hope you’re taking the time to educate yourself in regards to these things so you can become financially literate and take responsibility for your past and future financial decisions!
Don’t let your net worth affect your self-worth.
If you have a negative net worth, don’t let it have a negative effect on your self-worth. If you implement an actionable game plan, soon your net worth will become positive, and you’ll be well on your way to financial independence. Don’t know what your net worth is or how to calculate it? Learn more here, and consider signing up for Personal Capital to use this free resource to track your net worth over the years!
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