What’s Holding You Back From Financial Freedom

What's holding you back from financial freedom

EAFA - What's holding you back from financial freedom - Exploring the relationship between wealth and beliefs Vol 1

What’s Holding You Back From Financial Freedom?
Exploring the relationship between wealth and beliefs
– Vol 1: Series Introduction –

Money Talk: Fear is Not Our Friend

With this article, I’m kicking off a series we’re calling, What’s Holding You Back from Financial Freedom: Exploring the relationship between wealth and beliefs. This series intro considers the value of financial planning in troubling times, as well as why we’re afraid to talk about money.

One of the most rewarding aspects of my career as a financial advisor is the time I get to spend with my clients and prospective clients, learning about their goals, their dreams, changes in their lives, sharing the ups and downs – and seeing them overcome obstacles and thrive. Over the past months, I’ve been hearing more frequently how worried people are about the future. People ask me how to navigate, not just through economic uncertainty, but social and other kinds of uncertainty as well. While these are tough questions, I find it rewarding to explore not only hard economic data and sound financial advice, but road blocks and beliefs that hold people back from taking charge of their financial security.

What is the one thing that determines how much wealth a person can acquire?

My educational background, combined with twenty-five years as a financial advisor, confirms that it isn’t the people who start with the most money who achieve their financial goals. It’s the people who set goals, work at developing good habits, stick to them over the long-term, and allow themselves room to enjoy the current moment who worry least about money and have the most to fall back on. And it starts with a belief that they have authority over their own finances and the ability to make choices that will lead them to success.

Where do our money beliefs come from?

Our money beliefs come from our childhoods. You may come from a family where open discussions around money and big decisions were the norm. Or, maybe the kids had to leave the room before the adults brought out the checkbook or discussed paychecks or the family budget. Maybe those discussions were held in low voices, or maybe things got more heated and tense. Whatever your parents’ style was, the energy surrounding money in your house became embedded in your psyche. Your experiences shaped your feelings either of confidence or insecurity about managing your own finances.

For instance, are you someone who won’t buy anything unless it’s on sale? Do you spend more when you’re coping with a stressful situation? Are you someone who needs to accumulate material things in order to feel worthy? Does holding onto every penny and spending as little as possible give you a greater feeling of security? Or do you feel better when someone else handles the money? The motives behind these habits are examples of the baggage we bring to our money decisions. And when I say baggage, I mean everyone. No one becomes free of those embedded money messages without a bit of self-reflection and deliberation.

Polar-Opposite Parents

In my family, my father was a saver and my mother was a spender. I remember bill-paying day, which was my father’s domain. My dad would inevitably ask my mom about some expense she had made. Words were exchanged. My mother’s attitude was, “If we have the money, why can’t it be spent?” My father’s attitude was, “If we have extra money, why can’t we save it for the future?” Both of these are valid, reasonable money assumptions. The difficulty came because both were coming at the issue from a completely different perspective, even though they both grew up quite poor during the Great Depression.

My father’s childhood experience caused him to want safety, to know that there would be enough money for a rainy day. My mother’s childhood experience caused her to want the freedom to spend without guilt or worry. I’m quite certain my parents never did a deep dive into their “money beliefs” to try to understand where the other – or they themselves – were coming from.

After all, isn’t it enough to understand what we believe about how to manage our finances? Why should it matter to understand where those beliefs come from? It matters because money is one of the greatest challenges people face. And transparency tends to dispel fear.

Fear is Not Our Friend

Over-spending and over-saving are each fear-based behaviors and come from a mindset of scarcity or lack. And just like during the Great Depression, scarcity-related fears are even more prevalent since the beginning of the COVID-19 pandemic.

We all know that the pandemic became widespread around mid-March. By the time June rolled around, Science Daily reported a three-fold increase among groups of US adults feeling psychological stress related to fear, lack, economic uncertainty, or feeling socially-isolated, based on a new study by Johns Hopkins Bloomberg School of Public Health. According to the study, 3.9 percent of adults in 2018 reported fear-based mental distress, compared to 13.6 percent in April 2020.  Adults ages 18-29 in the US who reported psychological distress increased from 3.7 percent to in 2018 to 24 percent in 2020. Among adults 55 and older, feelings of psychological distress almost doubled from 3.8 percent in 2018 to 7.3 percent in 2020.[1]

Yet however strongly we may share these worries with our neighbors and peers, making decisions based on fears that we won’t or can’t have enough never serves us well. When it comes to money, fear is not our friend. So how do we manage it?

What secret beliefs do you hold around money and wealth?

Striking a balance between spending and saving is essential to a healthy relationship with money. I believe that we can be free from the anxiety that holds us back in our lives – in money matters and beyond. But it takes effort – starting with some inward reflection.

In this series, What’s Holding You Back from Financial Freedom, we’ll explore a number of beliefs that may be holding you back from reaching your financial goals. Do any of these resonate with you?

These beliefs include:

  • Negative Self-Talk
  • Fear of Discussing Money
  • Investing – The Fear of Doing It Wrong
  • Fear of Other People’s Opinions
  • Indecision: Is it Better to Save Money or Pay Down Debt?
  • Feeling You Don’t Have Enough Money to Invest
  • “I’ve Waited Too Long to Start Investing; I’ll Never Get Ahead”
  • “Financial Advice is for Other People – Not for Me”

As we work through this series, you may find some of these seeds of self-doubt lurking around in your own beliefs, sabotaging your efforts to set and reach your goals. Do you believe you can achieve financial freedom? The process of delving into your money beliefs can provide new understanding, allow you to root out false reasoning, and set you on a path toward an empowered way of living. The days self-sabotage will be behind you.

The message that I want to convey to you in this series is this: It is possible to establish money beliefs that honor and support your financial success. That’s right. It is possible – and yes, you can.

Watch this space for the next article in the series, “What’s Holding You Back From Financial Freedom: Negative Self-Talk.” In the meantime, you’re invited to schedule an appointment to discuss your best first step toward an investment strategy that fits your dreams, values, and financial goals.

With you at every stage,

Vicki Arndt
Founder & Senior Investment Advisor

[1] Johns Hopkins University Bloomberg School of Public Health. “Survey finds large increase in psychological distress reported among US adults during the COVID-19 pandemic.” ScienceDaily. www.sciencedaily.com/releases/2020/06/200603132550.htm  (accessed October 12, 2020).

Image by Nikola Pešková from Pixabay

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