It’s no secret that a healthy amount of Americans are finding it difficult to save. According to a recent CNBC article, 49% of Americans live check to check. There are many reasons or factors that contribute to this reality, from low wages to complacency, to bad habits. We hear about these factors everyday in the media, however, one area that very few are discussing is the relationship between a person’s emotional state, background, and self esteem to their financial disarray, bad habits, or financial illiteracy.
In my recent interview on Everything Cha-Ching with Pegi Burdict, The Financial Whisperer and author of “It’s Never about the Money…even when it is” she talks about the role our upbringing and emotions play in our financial decision making. Sometimes, we see people such as celebrities and athletes that seem to have everything, yet according to Pegi, although they have things most people covet, “a lot of times, there’s unhappiness behind it.” Of course there’s a sense of accomplishment with success, but some of the same insecurities that plagues a person before they become wealthy, famous, or successful are now going to be amplified if they remain unaddressed. Whether it’s money, food, or drugs, it’s a tool that masks the real issue.
It is very common that for anyone is emotionally vulnerable, who has low self esteem, or a low sense of self worth, to be more prone to having multiple parts of their lives negatively impacted. For example, our confidence and the way we feel about ourselves is a part of the foundation to who we are. If this foundation is cracked, it’s going to spill over into how we communicate, who our friends are, our level of health, spirituality, and finances to name a few.
As a Financial Advisor, I teach different habits that can help foster healthy financial well-being such as planning, being disciplined, living within one’s means, and saving and investing. However, if one has emotional deficiencies that goes unresolved or ignored, those fundamental money lessons are of no use, because the ultimate end goal is to feel good about one’s self, at any cost.
I’ll use myself as an example. After my divorce, understandably, my emotional state was low. I had been married for 14 years, my ex-wife was headed back to Indiana, and I was now looking the reality of being a single father to two teenage age girls square in the eyes. Being scared, very unsure of how things would turn out, I would go out and party a lot. I was going to concerts, clubs, and/or sporting events, every single weekend. I was spending way more money than I should have.
That’s how powerful our insecurities, fears, and lack of self esteem or self worth can be. Here I am, a Financial Advisor, and even though I have the traditional education and experience, none of that mattered. I just wanted to turn up, mask my fears, run from a reality that scared the hell out of me. I can look back now and see it for what it was, a temporary time of misspending money for the sake of my “happiness.”
Eventually, I was able to work through some of these issues and shake myself back to reality, but many people don’t have that ability. Now this isn’t to say everyone who abuses money has emotional issues, or that everyone with emotional issues abuses money. We all go through times in life and experience emotional obstacles, but they will be manifested one way or the other. A lot of times, on the surface, it may seem that some people are just bad with money when it actually may not be about the money at all, but more so, how we use the money due to the way we feel about ourselves.
To hear my full interview on Everything Cha-Ching (WDJY 99.1 FM) with Pegi Burdict, The Financial Whisperer, for a more thorough look into how unconscious money habits can impact your financial life, I encourage you to listen below.