Why Are We Emotional About Money?

Why Are We Emotional About Money?

We often think of money in terms of math – but it is so much more than that. Each of us has an emotional connection to money that goes far beyond dollars and cents. Our emotional connection is based on our earliest memories of how money impacted our lives.

Scarcity vs. Fluid Mindset

As we grow up, we observe our parents and caregivers either have a scarcity or a fluid mindset. If you grew up in a family constantly worried about making ends meet, you would likely adopt a scarcity mindset as an adult. If your family used money to extract joy through shared experiences, giving to others, and understanding their spending limitations, you have likely adopted a fluid money mindset.

A scarcity mindset comes from thinking money is fleeting and a constant source of stress and anxiety. You would relate to hearing things like:

• Money doesn’t grow on trees
• Do you think I’m made of money?
• That isn’t in our budget

A fluid mindset equates money with the opportunity to enjoy life’s experiences. You would relate to things like:

• We get to choose our adventure today
• Let’s have fun today!
• We’ll find the money to do that

A big misconception is that your emotional connection to money is tied to your income – it is not. Two families with the exact same income can approach spending and saving completely differently. How your family embraced or feared money based on their experiences and knowledge of financial options feeds the narrative you observed and likely adopted. Read more about money misconceptions in our blog about credit score myths.

Breaking Through a Scarcity Money Narrative

The root of scarcity generally lies in a lack of financial knowledge which translates into fear of missed or negative experiences. A way to become more comfortable with financial options is to learn how each impacts the dollars you are making, spending, or investing. Understanding terms like refinancing, compound interest, the value of RRSPs, Reverse Mortgages, and equity will increase your level of knowledge. A deeper understanding allows you to choose how you get your money working for you on your terms. This confidence will enable you to break through a scarcity mindset, moving you towards abundance and gratitude.

Giving Money Purpose and Meaning

What does a rich life mean to you? This definition extends far beyond a luxury item such as a car or specific pair of shoes. Define what your day-to-day lifestyle would be and how you go about getting there. A rich life includes many factors of which money is just one. Looking at the bigger picture of what a rich life means helps put it in perspective. Think about projects you might like to work on, hobbies to explore, people you would like to connect with, places you would like to travel to, charities you would like to support, and anything else that will enrich your life experience. Once you have defined what a rich life means to you, you can begin to change the narrative by giving money meaning and purpose in your life.

Conduct a financial audit to understand where you are and put a plan in place to get you where you want to be. At Gail Sylvester Mortgages, we will do just that – we will help you break through any fears with in-depth explanations of your options, making sure you feel comfortable and confident in your choices.

Call us and let’s get started today. We are here for you!

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