In life, we often find ourselves repeating certain patterns without even realizing it. It’s like riding a bike – a classic example of an automatic habit – where we pedal along, unaware of each individual movement.
Occasionally, certain situations prompt us to notice these habitual patterns. It’s rare, but sometimes we manage to change these deep-seated behaviors, and our lives transform, hopefully for the better.
Anthony Robbins likens humans to thermostats. He suggests that each person has a comfort zone where they subconsciously strive to remain. While we might know what’s better for us, straying too far from this comfort zone can feel unsettling, as it clashes with our ingrained sense of identity and self-worth.
We all live within a certain “temperature” range. When things get “cold,” we take action to “warm up.” Conversely, when it gets too “hot,” we might procrastinate or even undermine our own efforts until things return to a familiar, comfortable state.
This concept particularly applies to our financial lives.
You might think, “I’m working as hard as I can to earn money. There’s nothing more I can do. What do you mean?”
This is where the “subconscious” part comes in. Most people don’t intentionally act to reduce their wealth, but they often maintain their financial comfort zone through unthinking, unplanned actions.
Consider this scenario: You grow up in a family where your father works hard for an average wage, and your mother, a stay-at-home parent, manages the household and kids, including two siblings and a dog. Your father constantly talks about being controlled by his job, while your mother focuses on finding sales and cutting costs. This family dynamic subtly shapes your understanding and approach to money and work.
Navigating Financial Identity: From Childhood to Adulthood Understanding the Impact of Childhood on Financial Perspectives
As a child, your understanding of “life” is shaped by your immediate environment. If you’re a boy, you might grow up aiming to work hard for a steady, yet average income, often feeling controlled by your job. If you’re a girl, you might aspire to efficiently manage a household and children, focusing on minimizing expenses. The plan often includes having three kids and a dog, mirroring the family structure you grew up in.
Reflect on the scenario described above and identify at least two ways you could alter your financial situation.
Next, consider two changes that could shift your emotional perspective regarding finances.
Often, we miss these alternatives because we’re preoccupied with our ingrained patterns.
So, what happens to someone accustomed to earning an average wage when they encounter a lucrative business opportunity or are offered a high-paying managerial position? More often than not, they find convincing reasons to view the business venture as too risky or feel unqualified for the promotion. This discomfort stems from a misalignment with their ingrained financial identity, leading them to decline these opportunities and stay within their comfort zone.
Similarly, when their financial situation improves, perhaps due to a pay raise, and their bank account starts growing, they might spend the extra money on home renovations, dining out, a new car, or a vacation. This spending brings their financial status back to a familiar, “comfortable” level.
Conversely, in tough times, they might work extra hours to elevate their financial status to where they believe it “should be.”
How does this relate to parenting?
Understanding your financial identity and its origins is crucial. It’s important to recognize that your children are currently developing their financial identities, influenced by the patterns and behaviors they observe in you. Being aware of this can help you guide them towards a healthier, more flexible financial perspective.
Shaping a Better Financial Future for Our Children Reflecting on Financial Identity and Parental Influence
Every parent I’ve encountered shares a common wish: for their children to inherit a better world. But how can we achieve this if we continue to pass down the same financial habits and mindsets that we inherited from our parents?
The answer lies in breaking the cycle. Just as joyful parents are likely to raise happy children, those with a robust financial identity are poised to instill the same in their offspring.
A practical first step is to assess your current financial situation. If you have a partner, involve them in this exercise. Consider these questions:
- How do I earn my income?
- How effortlessly do I earn money?
- What is the size of my income?
- How large are my expenses?
- What is my spending pattern (planned, sales-driven, impulsive, brand-oriented)?
- What percentage of my income do I save?
- What are my savings goals?
- How much of my income do I invest?
- What are my investment strategies?
- How do I manage my finances?
- What are my financial objectives?
- What is my level of financial literacy?
- What are my feelings towards money?
- How much money do I believe I deserve?
Reflect on these aspects in the context of your upbringing. You might find that you’re already making better financial decisions than your parents did. Recognizing the roots of your financial identity can offer valuable insights into your current financial status.
Next, envision your ideal financial situation in 5 or 10 years. Identify someone who embodies this financial success – it could be someone you know or a public figure – and analyze what you can emulate to enhance your own financial standing.
Pay special attention to the last two questions. Your answers can either empower you or hold you back. Use your children as motivation, thinking along the lines of, “I deserve abundant wealth so my kids can have a great life and learn financial independence.” Remember, your current financial identity was shaped over time, but now that you’re aware of it, you have the power to change it.
