Our money attitudes are both financial and emotional, and how those around us handled money has a large impact on how we deal with money. Typically our money habits either mirror those of our parents and family, or are the polar opposites. Once you understand how your family’s money attitudes impact your money life today, you can begin to separate your own attitudes from theirs. If you have children, you may also notice how your money habits are impacting your own children.
Money attitudes are reflective of an individual’s values. A value is fundamental belief of what is important and worthwhile.
Examples of values:
- Importance of Education
- Importance of Career
- Importance of Religion
- Importance of Family
- Importance of Giving back to the community
- Importance of Financial Security
There are several categories under which an individual’s financial values may fall under:
- Purchasing Power: The ability to purchase what you want when you desire it is important. If your income is not sufficient to accommodate your desire for the best and newest, you are at risk of over using debt to satisfy these desires.
- Security: You believe that the greatest benefit to having money is that it provides security. You may be risk averse in your decision making process related to money. You want to be sure that all of your basic needs are covered and don’t want to have to worry about a job and financial matters.
- Benefit for Others: You believe that money is a vehicle for helping others, including family, friends and charity. You like to be of service and have a desire to make a difference in the lives of others.
- Status Symbol: The recognition that comes with having money is satisfying to you. You enjoy material goods and require a high level of income.
- Validation of Success: You view your Income as a measure of how successful you are. You are willing to take calculated risk for a high enough reward.
- Freedom: You don’t like to be controlled by others and like the flexibility that having money provides. Entrepreneurship may be an appealing source of Income for you.
- Meeting a Need: Your income requirement is based on what is needed to live a simple and happy life.
Because values translate into actions, which become habits, it is important to understand your current financial values and mindset.
Once you have identified your current financial value category, you are able to evaluate if it truly reflects you or is reflection of outside influences. From there you can ensure your decisions are in alignment with your goals and your true values.