How childhood affects your money mindset
What’s your earliest memory of money? Are you eagerly saving pennies in your piggy bank?
Or perhaps you’re listening to a tense conversation between your parents about how to afford the mortgage? In order to understand how childhood affects your money mindset, it’s key to pinpoint the behaviors imprinted on your memory.
Children absorb information, and imitate mannerisms and behaviors, from birth, whether it’s non-verbal or verbal, knowingly or unknowingly. In fact, until the age of 5, a child’s brain develops more than at any other time in life! As such, lack-consciousness and learned ‘money’ behaviors from family are consumed without question, potentially leading to negative behaviors later on in life.
The good news is that there is always room for change. It is possible to rewire your money mindset so that you can improve your life and those of future generations. Let’s explore how childhood affects your money mindset in these ways:
1. Your Family Never Talked About Money
Money was a taboo subject in your house. This has perhaps made you feel uncomfortable talking about money, meaning you are less likely to learn from others. If you were never taught about the practicalities of money, you may have poor financial knowledge of saving, budgeting, the stock market, or interest rates.
What you don’t know can’t hurt you, right? Wrong! Not educating yourself on all things money can affect your relationships, your work, and your lifestyle. Instead:
Teach yourself about a healthy money mindset.
Talk to your parents to understand where their beliefs came from, and open up the conversation.
Enroll on a course with a money/wealth coach to learn how childhood affects your money mindset. Learn how it might be affecting your business and finances as a whole. They will help you to change your money mindset for the better.
2. Your Family Reinforced the ‘Lack’ of Money
Was your childhood full of statements like ‘money doesn’t grow on trees’ or ‘do you think we’re made of money?’. Continuously being told, as a child, that there isn’t enough to go around, can lead to a scarcity mindset. In later life, this can have a huge effect on your ability to create wealth. Your family members may have had this mindset reinforced since they were children themselves. This can leave deep scars if not addressed.
Tips:
- Focus on creating an ‘abundance mindset’. Turn those thoughts of scarcity into ones of abundance. Practice visualization and manifestation, repeating daily mantras such as ‘I deserve wealth’ and ‘money will come freely to me’. This will allow you to be open to what the universe can bring you.
- Know that wealth is your birthright. Every person, regardless of their background, has the right to the wealth they deserve.
- Stop focusing on fear. You are less likely to take necessary risks if you have a fear of losing money and always try to hold on tightly to what you have. Opportunities don’t come unless you risk leaving your comfort zone.
3. Your Family Made You Feel Guilty About Money
This is very common when your parents/guardians are operating with a scarcity mindset. The emotions and feelings around money are so negative that it creates a feeling of anxiety and pressure.
Perhaps you were made to feel guilty when money was spent on you. For example, a parent may have told you ‘if I’m spending all this money on your college tuition, you better get good grades’ or ‘do you know how hard I’m working just to put food on the table?’. This comes from the misinformed idea that guilt is a good way of teaching the value and importance of money. In fact, this negative energy can lead children to have a very unhealthy relationship with money in adulthood. As adults, these children will be unable to spend money even when they have it, and will be unable to buy things for themselves unless they believe it is ‘essential’. As a result, when they are parents, the cycle will begin again.
Work on using positive language, and explain the value of money without using your own personal situations as examples.
Discuss financial problems openly, in a way that doesn’t put the burden on the child. For example, make saving into a fun activity you can do together. ‘You want a new pair of trainers and I want to take us on holiday. Let’s both work on putting money in our piggy banks and see if we can hit our monthly goal’.
Teach/ talk about money with your own children, and other people around you. For example, start to be honest about your financial situation with your friends/ family. They might be able to offer advice you can learn from.
4. You Experienced a Traumatic Event that Involved Financial Hardship
Memorable events can create an environment for a child where there is negative/traumatic energy when it comes to finances. For example, a divorce in the family can cause financial disagreements, nationwide recessions can cause loss of jobs, or a death in the family may lead to misunderstandings about inheritance. Relevant to all of us now, are the effects of the global pandemic, as many people are losing their jobs or having their income impacted in some way.
All of these events can cause a child to absorb certain feelings about money that may lead to a toxic money mindset. It might not be the exact money mindset of your parents or guardians. In fact, you may have even rebelled against their money behaviors.
For example, if your family always told you there wasn’t enough for you to have what you desired, you might now always like to treat yourself. Additionally, you may have learnt that money can be used as a bargaining tool. For example, during divorce, parents may have used money to influence you. For instance, your mum may have said ‘you can’t go bowling today because your father hasn’t paid the child maintenance’. Alternatively, your dad may have given you lots of gifts in order to overcompensate for not being around as much.
Another common traumatic event that affects children is a recession. For example, my behavior was informed by the effects of the Great Finnish Depression in the early ’90s. This affected the millennial generation profoundly, as they witnessed their parents and grandparents lose everything they had worked for. Bankruptcy, debt, and even suicide became common events in these times and had a huge influence on money mindset. People of my age have carried these traumas forward and are far less likely to do well in business as a result. The risks needed to start a business aren’t taken, as people have the mentality of ‘the higher I climb, the harder I fall’.
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