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You may not realize this, but we all have our own money story.
Our money story was developed and formed since our childhood. The things we’ve seen, heard, and experienced in our family, the environment we grew up in, the TV shows we watched, the friends we hang out with all the time, and the schools we attended.
All that contributed to forming our beliefs, mindset, and attitude toward money.
Our Parents Have the Biggest Influence on How We Wrote Our Money Story
We’ve learned and written our money story based on the following ways:
- Imitating our parents, our close friends, our idols, etc.
- Hearing our parents talk about money, TV shows, etc.
- Personal experiences through both internal and external incidents. (e.g., arguments about late bill payments, inability to pay for school fees, trips, meals, etc.)
But just as we’ve written it, we can rewrite it in 5 steps.
Here’s how:
Step 1: Create A Separate Physical Space for Self-Reflection
Journaling forces you to dig deep into your emotions and actions and induces self-reflection.
When you journal, you create a personal space and time within your busy schedule to recap what has happened during the day or week, why it happened, how you felt, and what you subsequently did. By writing down our experiences in plain words, we can view our situation objectively.
Instead of being in your own world of thoughts and feelings, you’ve created a separate space in the physical world conducive to understanding, acceptance, and reflection.
This helps you acknowledge and commit to making the changes to become better.
Step 2: Challenge and Reframe Your Negative Beliefs
Target the cause, not the symptoms.
So, here are some questions to help you dive in deep and find the cause:
- What did you see, hear, and feel about money at home?
- What did you see, hear, and feel about money outside of home? (e.g., friends, schools, TV shows, books, etc.)
- Are there any incidents about money that you still remember vividly? (e.g., parents quarreling about money)
- What money lessons did your parents teach you?
- How did you feel when you saved, spent, or donated money?
- Where did you learn about money?
As you continue to reflect and list your answers, answer this question for each point you’ve made:
- How has this positively or negatively impacted your life?
This is to search and identify who, where, and what led you to think and believe this is how money should be handled and what the outcomes of doing so were.
Then, challenge them with money affirmations to break those beliefs.
Here are some money affirmations to get you started:
- Living my life to the fullest is my right
- I’m grateful for all the financial opportunities I’ve received
- I am capable of overcoming all obstacles that stand in my way
- My positive mindset and actions will lead to financial abundance
- My potential for prosperity is limitless
- My money will work hard for me
- My money goes to what I hold close to my heart
Money affirmations should be personal and relevant to your situation. If the above examples don’t fit, write your own affirmations.
Step 3: Educate Yourself & Get to Know Your Money More Intimately
Like any close relationship you have, to build a healthy relationship with money, you need to educate yourself and interact with your money more.
You can do this by:
- Reading personal finance books, blogs, and watching videos
- Budgeting
Budgeting is the first step to getting to know your money more intimately.
There are many different types of personal budgets. But the one I like the most is the 50 30 20 budget.
Let’s say your take-home pay is $4,000.
- 50% for Needs: $2,000 for essential expenses.
- 30% for Wants: $1,200 for non-essential expenses.
- $20% for Savings/Investments/Debt Repayments: $800
Next, list and categorize your expenses (e.g., the past 3 months) into their respective categories. Then, split them into fixed and variable expenses.
At this point, you’ll have a very clear picture of your financial situation.
Step 4: Set Financial Goals And Create an Actionable Plan
The best way to reinforce your new money beliefs and rewrite your money story is to think of it, speak of it, and act on it, just as you have done all this time.
The first step is to set clear financial goals and draft a plan to achieve them. I like to use the SMART goal-setting method for this.
Here’s how:
- Specific
I want to save $6,000 for an emergency fund in 12 months, which will cover unexpected emergencies and expenses.
- Measurable
Save $500 per month for 12 months.
- Achievable
Look at your budget and see if it’s achievable.
- Relevant
The goal you’re aiming for must be relevant and align with your life’s goals. In this example, you want to prepare yourself for the unexpected.
- Time-bound
You aim to complete this goal in 12 months.
Using the above example, write down all your short to long-term financial goals. Then, plan them out with your budget.
Step 5: Surround Yourself With Positive Influences
The environment you put yourself in also shapes and reinforces your money story, just as it did before.
Just as Jim Rohn said, “You are the average of the five people you spend the most time with.”
So, choose your friends wisely.
Your friends should share your aspirations, be supportive of you, and want the best for you. If your current surroundings are filled with negativity, get out now.
Rewriting Your Money Story a Step At a Time
It’s going to take a while, so you need to have patience and discipline. Rewriting a decades-old money story isn’t going to happen overnight. And don’t overthink it; get on with the first step.
Set aside 10 to 20 minutes before bed and dump everything into your journal. Once you’ve identified and reflected on your beliefs and attitudes about money, proceed to the next step.
And so on.
Sound good?
Great, let’s get going.
