Last week I faced my fear of public speaking to talk about another common fear: money.
It’s not like we’re afraid of money itself; it’s just pieces of paper. We’re afraid of dealing with it. But why? I don’t think it’s because we’re lazy or we’re afraid of the work.
I think, at its core, the fear has to do with scarcity. Dealing with money reveals our struggle to balance what we can afford with the life we want. The idea that we can’t afford the life we want is terrifying.
A lot of us react to this fear with denial. We pretend money doesn’t exist. We don’t bother looking at our budgets, we don’t learn about money, we keep buying crap we don’t need, and maybe we even cope by telling ourselves money is evil and all rich people are greedy.
I take this fear to the other extreme, though. Instead of financial denial, I idealize money.
The Irony of Idealizing Money
Growing up poor, I always thought money was the solution to everything. As a result, I allowed it to rule my life completely as an adult. Like a bad relationship, it got complicated. I started to prioritize it over everything else–even my goals and dreams. I made bad decisions because you’re afraid of losing it. I was afraid of money because I was afraid of not being able to afford the life I want yet, ironically, I almost ditched the life I wanted, several times, because of money.
When I got my first “real” job, for example, I felt like I struck gold. Sure, I was only making $24,000 a year, but that was a lot to me. For the first time in my life, I could afford things that were typically off limits (like Oreos). I felt lucky; I was grateful.
One day I got bored, though. Just to see what was out there, I started looking for jobs online. And I found one. I was qualified, it was a big technical writing firm, and it paid DOUBLE. I applied for it, just for giggles. I went to the interview, just for giggles. To my surprise, I got the job. At this point, my decision should have been clear: accept the job, progress in my career, buy more Oreos.
But I hesitated. I was afraid to take it.
What if the new job didn’t work out? I kept wondering. What if I had no job? What if I end up with nothing? In a way, that fear kept me a willing prisoner of money. Fear ruled my life so hard I almost didn’t take one of the biggest salary jumps in my career. In the personal finance world, they have a name for this: scarcity mindset.
After a few years of writing about money for a living, I feel like I understand my own relationship with it pretty well. I’d be lying, though, if I said I’m completely over that fear. It still comes up every now and then. I take on work I don’t have time to do because I’m afraid of rejecting money. Or I buy the cheap boots even though I know splurging on quality makes more financial sense in the long run.
Learning to Feel in Control
Chances are, you can relate to this in some way, even if your coping method is denial. Pretty much all of us have financial fears and it’s understandable: money is, indeed, such a hard thing to control. From the stock market to inflation to income inequality, there are so many outside forces that affect your personal financial situation.
We’ve talked about the cure to all of this before: it comes down to putting yourself in control through tiny actions tied to larger, more meaningful goals. I’ve written about this in detail and during Phroogal’s Road to Financial Wellness tour, I talked about it at length. You can check it out in the video above. The solutions are important, but the first step in getting past financial fear is the first step in getting past any fear, really: acknowledge it exists, then try to understand it.
I can so relate to the fear! Being self employed my biggest fear is not taking on business, whether I have time for it or not. It always seems like feast or famine. And every time I turn away business I choke on fear. I have to work on it every day!
It’s so true! One of the biggest lessons I’ve had to learn as a freelancer is knowing when to say “no.”
I’m so sorry I couldn’t make it! Pasadena is quite the drive from Lakewood (on a school night). I would have loved to go!
i love the concept of finding your Why. As you know, my why is my daughter. She’s the reason why I took control of my money. When she was born, I knew that I couldn’t be in denial about my financial situation anymore. Even though having kids is super expensive, I definitely feel richer after having a daughter because I feel in complete control of my money. I was even able to even enjoy my four month layoff in which I spent a lot of a lot of quality time with my daughter.
Let me know the next function that you do – I’d love to attend! 🙂
Bawww I love that. Your family is lovely. And thanks, Vic! I’ll letcha know.
I definitely have some fear-based, scarcity mindset thinking driving financial decisions. For example, my freezer is stocked with meat that will likely end up in the trash can eventually…because that’s what my mom always did. She had a reason: growing up poor and hungry in the Philippines. I don’t…I just adopted the same mindset despite never being hungry a day in my life.
I suspect I hoard money for the same reason. It has some good consequences (maybe financial independence) but that doesn’t mean it’s a healthy mindset.
Fantastic stuff as always, Kristin.
Thanks very much! Yeah, I can totally relate to that. My mom grew up without much, too, and I’ve inherited a lot of her survival habits. Like you, I think it’s had some positive outcomes–that fear encouraged me to save and pay off my debt asap. But when it comes to growing my money, I’ve definitely had to learn to let go of the fear.
Great work as always. I feel like the “scarcity mindset” prevents scores of people from doing what they want because of fear.
Thanks! And yeah, totally. I think it goes well beyond personal finance.
Great post…I can definitely relate. Growing up in a working class immigrant family, that scarcity mindset has stuck with me. Even though I’m doing fine financially, I still have a tough time shaking that mindset. It’s been ingrained in my mind for so long.
I hear you. I think most cultures kind of romanticize poverty, too, and vilify wealth. That doesn’t help. It helps to know a lot of other people have the same issue, though!