This is a guest post from Cara, a personal development coach and the founder of Carajaz Coaching.  With money issues, Cara works with people to find and resolve the root cause so that old thoughts about money no longer hold them back from the prosperity that they desire. An old post that I wrote “Cats in the Cradle, Money and Family” inspired this article as Cara believes that in addition to people inheriting their money beliefs, some also use money as a way to deal with inner feelings.

Money is a far more emotional topic than many people would believe. What causes the most arguments between couples? What do people long for, and work very hard for? What do we often blame our unhappiness on? (“If I only had the money, I could take that cruise, buy that house, vacation in….”) How do we feel when we don’t have money? For many of us, it’s very painful not to have money, and for a few of us, it’s also painful to have money.  Just think of the fear that can come up when one thinks, “What if I lose it all?”

Money is really a symbol. It’s used as a universal exchange, and it certainly has simplified things since the days of barter. Our feelings about money are often about survival and fear. What if we secretly fear that we don’t deserve to have money? Think that thought would unconsciously sabotage our success? You’re right – whatever we believe about ourselves, we will find (often unconscious) ways to prove that we are right. Perhaps you took on a really risky investment and now wonder why you did it? It might have been your unconscious mind directing you to an investment that will sure that you don’t have the money – because, after all, reasons your unconscious mind, you don’t deserve it.

What about the thought that rich people are mean and miserable? You’d be surprised how many people think rich people are dishonest and unhappy – remember the saying, “Money can’t buy happiness”? This is an example of a conflicting belief – most of us feel we would be much happier with money, as we could buy all that we needed or wanted, but if at the same time, you are feeling that rich people are miserable and mean, who really wants to be miserable and mean? Imagine what this unconscious inner conflict does to your good judgment when choosing stocks for your portfolio!

Think about it – money is so necessary for survival and for having a wonderful life – so widely handled and so woven into our lives – that it is easy to use money to punish yourself, to prove that you are “not worth much”; and more. It can be used to prove that you really are ‘too stupid to ever succeed’ or to put yourself into a state of self-loathing (think ‘compulsive spender’ suffering the torments of guilt). Think about the person who burns through everything they have and is always one step away from bankruptcy no matter how much they make – this person is probably using money so that they can express the same feelings they had as a child. It’s the old feelings that account for the sometimes crazy ways people deal with money.

Perhaps the feelings might be ‘always under pressure’ or ‘never going to be good enough’ or some other self-defeating set of feelings. What negative feelings do you have about money? In what ways could those feelings be holding you back from financial success?

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FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.
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13 years ago

Pressure is always part of us. Handling it is part and the best things that we could do.

Rob Viglione
13 years ago

I am reminded of “Francisco’s Money Speech” in Ayn Rand’s “Atlas Shrugged.” I recommend looking it up and reading it for yourself, but here’s my favorite part:

“Money will not purchase happiness for the man who has no concept of what he wants: money will not give him a code of values, if he’s evaded the knowledge of what to value, and it will not provide him with a purpose, if he’s evaded the choice of what to seek.”

13 years ago

I’d argue the psychology of money is directly intertwined with the psychology of success. The more investment you make, the great the payout. Invest money into many different types of stocks, funds, etc., and you increase your chances of return because your are diversified. With the brain, you can invest you energies into certain things like meditation, self affirmation, and learning, that will payoff in the form of a strong, focussed, and driven mind. The results are staggering.. good book for this here actually…

13 years ago

Very interesting article and some points brought a new perspective.

What does it mean when a person gets more satisfaction by saving a lot of money when buying something versus the purchase and ownership of the item itself?

Just Getting Started
13 years ago

Money can’t buy happiness, but it does buy everything that makes me happy.

13 years ago

Okay so I get it, money is an important part of life and a stressful subject for most people. Our pre-conceptions, what we learned during childhood, how much we got, etc, directly effects our subconcious and often concious reactions to money issues… so what?

It’s the same as any other aspect of life that comes up constantly. Relationships, work, hobbies, whatever. No matter what, there’s going to be alot more to it than meets the eye. Often completely different reactions from completely different people.

The important thing to remember about money is that it really does represent everything we own. Everything we have. Even our own time. Treat it with care, and don’t let your emotions, or preconceptions, control any decision making on the subject.

Gates VP
13 years ago

Moneygardener: Money likely causes 80% of the stress in life, yet people never want to address their financial health.

Of course, it’s still chicken & egg, which comes first? To pull out the old weight loss analogy, is it eating right, running getting enough sleep, reducing overall stress? My experience has been that they’re all related and you have to cyclically make these improvements.

In this case, people who don’t want to address financial health often don’t want to address the 50 other underlying problems causing those financial health issues. And humans can’t really address 50 at a time anyways, at best we can manage 2 or 3.

But Cara does capture something essential here, which is simply that your ability to manage your life and you ability to manage your money are one and the same. Thank you Cara.

Canadian Dream
13 years ago

It’s rather ironic we PF blogger focus a lot on the numbers when often the psychology is more important for the average person. Perhaps that is why JD over at Get Rich Slowly is doing so well.

I actually read an interesting column the other day in the paper which an advisor pointed out in his work that decisions about money were 60% psychology based and 40% on the numbers.

FT and Cara, do you agree or what are your %?


13 years ago

Great post. I find the emotional aspects of money fascinating and discouraging at the same time.

On one hand, I feel great when I make what I think is a wise financial decision – paying down debt for example. It helps re-affirm that I am progressing in my goals towards financial freedom.

On the other hand, it is far too easy to compare yourself to others based on monetary or material things. I find it disheartening when finding out that a colleage makes more than I do or that my neighbor has a nicer house than I do. In a lot of cases, I am better off if I can shut out the noise of knowing what someone else has or earns and just focusing on me versus my goals. Easier said than done though.

13 years ago

Money is a fascinating thing/concept/tool in this world. Most people are working away every day in order to obtain money, but few people ever discuss money. Money likely causes 80% of the stress in life, yet people never want to address their financial health.