Money is Emotional

Money is Emotional was a great book by my good friend Christine M Luken , and certainly a book you should all check out. But her book is not what I'm writing about today.

Instead, I'd like to start off with something that took me decades to figure out, and then a few more years after that in what to do with that information. Are you ready? Ok, here it is:

Making money and having money are 2 different sets of skills.

Let that sink in a bit. At it's very core, if you think about it, making money is a math problem. Keeping money, on the other hand, is an emotional problem.

That was one of my biggest problems being in business for myself, no matter how much I seemed to make, it never seemed to stick. I tried all the mental tricks such as having separate envelopes for various expenses and phone apps... Even opening separate bank accounts. Nothing seemed to help.

I finally figured out the common denominator with all my money problems.

(Hint: it was me)

I finally came to realize all the limiting beliefs I had around money were causing all of my issues. I learned about different cognitive biases I was carrying around too. For example, much of my approach to money was held in an Anchoring Bias I learned when I was a kid.

An Anchoring Bias, for those of you not familiar with it, is the attachment we often give to the first piece of information we get about something. In this case, for me, this was that money was "scarce."

So while I had come to realize this bias existed, it was more important I learn what to do about it and how to “reprogram” my brain (which if you're wondering, it very much is possible). In essence, I retrained my brain how to close the back door where all my money was escaping. Clearing this bias from my head has been one of the best things I’ve ever done to enhance my net worth.

We all experience Anchoring Bias. You see it all the time in advertising. “This car is normally $20,000 (which is isn’t) but today you can buy it for $14,900.” You're being “anchored” at a higher price, so the lower price seems like a good deal.

You’ll also notice another bias at play with the “new car” scenario with something called a Novelty Bias, which is another cognitive bias many of us carry around that “whatever is new” is better than what we currently have. Yet another bias I carried around which would help remove money from my accounts on a regular basis. Advertisers know this, and they profit handsomely with that knowledge.

There are a lot of ways to reprogram your biases, but I can tell you it was helpful to at least know they existed. Hopefully this opens the door for you as well to pay attention to biases that really don't serve a purpose, except perhaps to hold you back in your Life.