When you think about the best gift you ever received from your parents, it probably has nothing to do with your money mindset. You might think of the most useful gift, the most thoughtful, the most creative, or the most expensive. Or maybe it was a gift you made to feel something, a gift that tapped into a deeper emotional side.
As we get older and, in theory, a little wiser, we realize that the most impactful gifts don’t come in boxes. They are the lessons our parents instill in us during our developmental years, and the most powerful lessons are often not learned intentionally. They are the ones we learn by observing how our parents act, listening to how they talk, and feeling their emotional responses.
As it turns out, this is how most of us develop our fundamental beliefs, values, and attitudes about money that influence how we see the world. This world view of money, what I like to call your family’s money map, influences your financial decisions to this day.
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Money cards explained
Your money map is how you view both your internal self and the external world in relation to money. Your chart helps you chart the course for every financial decision you make. To use a more modern example, think of it as a financial GPS guiding you. Basically, your money card is your worldview, both internally and externally.
Your money map and how you see the world is a complex web of beliefs, attitudes, emotions and values that you place on money and the role it plays in your life. It affects how you think and feel about money; it is those thoughts and feelings that influence your actions and behaviors.
Here are some examples:
- If your parents struggled with debt, you may have a strong belief that all debt is bad.
- If your parents never had savings and were stressed about money, you may feel anxious when handling money, or you may be a vigilant saver (ie, saving creates security).
- If your parents had a fight about money, you may prefer not to talk about it, or you may find that financial differences evoke many strong emotions.
Money cards are passed down from generation to generation. Your parents have their own money cards (which influenced their parents) and pass them on to you. And you pass your card on to your children. We are all grateful for what is perhaps one of the most valuable lessons we can learn in life, and it is one that will influence both our lives and our financial decisions.
How our money cards are formed
Our money cards are formed early in life. In fact, the attitudes, beliefs, and emotions that form the basis of our financial worldview are formed by age 7 (opens in new tab). That’s right: How you think and feel about money, how money influences your identity, and how you see money in the world is encoded in your brain before you develop critical thinking skills.
Here’s how this works. When we’re young, our brains – think of them as mini supercomputers – are waiting to be programmed. Before we turn 7 (about) we lack the ability to program them ourselves, so our brain’s basic programming depends on the world and people around us. Enter our parents.
Our parents’ observable attitudes toward money will form the code that programs our minds. When we don’t have critical thinking skills (again, before about age 7), everything we learn and experience from our parents is converted into a feeling (an emotion) that is encoded in the subconscious and unconscious parts of our brain.
Essentially, we are programmed, or conditioned, to think, feel, and act in specific ways. And those programs continue to run, often below the conscious level of thought, impacting our lives even today.
How money cards affect our finances
What most adults get wrong is that they think their money problems are thinking problems. In reality, they are feeling or emotional problems. That’s not to say that making smarter, more informed financial decisions isn’t important. It is essential to improve our financial health, but there is something much deeper that affects our daily lives.
Visualize an iceberg. The part that sticks out above the water represents the thinking part of our brain. The 80% to 90% that is underwater, the subconscious mind and the unconscious mind, represents our feelings about money. And those feelings (emotions, attitudes, beliefs) are the main force that influences our decisions today.
In my previous article on why financial literacy alone will always fail, you can learn why more information and more knowledge (i.e. more thinking) does not change how we act and behave. There is something much deeper that we need to investigate.
The early programming of our mind is still with us today. Every time we make a financial decision, our brains (those supercomputers) are executing a program that resides beneath the surface of our conscious mind. The decisions we make and the actions we take all depend on our awareness of that programming and how it interacts with our logical, rational mind.
Improving our financial well-being starts with understanding the healthy or unhealthy beliefs, attitudes and feelings our brains have programmed. If we want to live a richer and more fulfilling life, we need to start exploring our money cards and how they determine the course we all take.
Stay tuned for next month’s article to learn how to explore your personal money card and for actionable steps you can take to change the unhealthy beliefs, attitudes, and emotions that keep you from getting the most out of your money.
This article is written by and represents the views of our contributing advisor, not the Kiplinger editors. You can check advisor records with the SEC (opens in new tab) or with FINRA (opens in new tab).