Source : the age
Whenever I meet people for the first time they often have a lot of questions they want to ask me. But one question I always like to ask them in return is about their money story.
For example, how do you feel in those split seconds between logging in to your banking app and your bank balance appearing? A deeply personal question to ask a near-stranger? Absolutely. Incredibly revealing and insightful, though? Big yes.
Answering this one question can reveal a lot about your attitude to money.Credit: Dionne Gain
The reason that feeling, and the answer to that kind of question, is so telling is because the way you feel when you’re doing a pulse check on your finances says so much about your overall relationship with money.
Not just your philosophies around spending and saving money, but also about how confident – or unconfident – you are about your ability to manage it as well. And it’s these kinds of questions that get to the heart of your money story.
One of the most misleading things about money stories, and something I see every day, is that people often believe they are tied to one story. But just like changing exercise or diet habits, changing careers or getting a better night’s sleep, we always have the opportunity to change the next chapter of our money story. And there’s no better time for this than at the start of a new year.
What is a money story exactly?
A money story is the personalised collection of beliefs and values you hold around money and wealth. It explains why you spend and save the way that you do, and gives context to your personal views on money – both conscious and subconscious.
In its simplest form, money has three purposes: to spend, to share and to invest.
It’s those things we pick up from our parents when we’re young, the habits we slowly form over time, and the things we tell ourselves that very often aren’t actually doing us as much good as they could.
Do you feel stressed the minute a bill arrives, even though you’ve budgeted for it? That’s a chapter of your money story. Do you spend your entire pay cheque before it has even cleared? That, too, is part of your story. Are you exceeding your savings goals and giving yourself a pat on the back whenever this happens? Also an important plot point in your story.
Why does it matter?
Money stories are important for a number of reasons. For one, what you tell yourself about money, and the feelings you associate with money, are fundamental to your behaviour.
In its simplest form, money has three purposes: to spend, to share and to invest. Of course, within those three things are countless feelings and ambitions. As we’ve all seen from people who have lost everything or won it all, money has the power to transform lives both positively and negatively.
But remembering that it isn’t the big bad wolf or the knight in shining armour is helpful because it allows you to remember that, as the person who controls the purse strings, you are the narrator of your own story, not money.
What’s my money story?
The first step in understanding your beliefs around money is to figure out what you believe and to then unpack those beliefs.
For example, if you’ve never been able to stick to a budget and are telling yourself it’s because you’re “just bad with money”, ask yourself, where are the areas you overspend? Are they always in the same place, and are they on essential expenses like groceries or utility bills, or on splurges like takeaway?
Then, let’s consider your budget process. Did your parents speak to you about money when you were growing up or was it managed without you ever seeing or thinking about it? If you never saw budgeting in action, it’s not surprising you find yourself struggling.
Watching a couple of inspirational fitness videos doesn’t make us qualified to run a marathon. If we go out and try, we’ll be disappointed and frustrated with ourselves when we fail. But that doesn’t mean we should give up; rather, we should start smaller.
Then you should look at the feelings that come up around money (like the feeling you get when checking your bank balance) and what it is you tell yourself. Are you really “bad with money” or is it that you need some help and to learn more?
Is change possible?
Absolutely, my friend! Not only do I see it every day, but you do, too. Your colleague who just went from blonde to brunette? Opting for change! How about your friend who is giving up booze for 12 months, or just announced they’re planning to take a three-month sabbatical to do some travelling? Also leaning into change.
From deciding to have children, taking up cycling to work, setting a book-reading goal or eating less red meat, people set themselves goals and make necessary changes based around these big and small priorities every day of the week.
Yes, change – be it good or bad – often feels scary. But when you take a look around, you can see the benefits of it on display everywhere. And that means that deciding to change your money story is not only entirely possible, it’s also easy to begin.
But to figure out what you want for 2025 and beyond, you have to understand where you’ve come from and what needs to change first. Because it’s only once you know those things that the next chapter can be written.
Victoria Devine is an award-winning retired financial adviser, bestselling author and host of Australia’s No.1 finance podcast, She’s on the Money. She is also founder and co-director of Zella Money.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
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