The “nuts and bolts” of personal finance are really pretty simple, requiring nothing more than third grade math and a copy of the golden rule. Don’t spend more than you earn. Put a little something in savings every time money crosses your palm. Try to cultivate a generous heart. If you want to earn more money, look for opportunities to be a greater blessing to your neighbor. Why then do so many people suffer from financial distress? I can sit down with someone and work through a monthly budget, but I can’t get them to believe that living on a budget or starting an emergency fund is a reasonable possibility. I have come to the conclusion that the stories we believe are ultimately what limit our chance to reach financial freedom, whatever that means to you. Recently while listening to a lecture on finding financial freedom the teacher suggested, “Imagine looking into a mirror while saying, My greatest fear concerning money is…” The class dutifully repeated the first part of the assignment and then broke into self conscious nervous laughter. With a little more prompting, the braver members of the class shared their greatest fears. For me this was a spooky experience. As I said, “My greatest fear concerning money is,” I spontaneously visualized my parents standing behind me with their arms crossed and expressions of disapproval on their faces. My mother is dead. My father is suffering from Alzheimer’s. Sadly, I don’t think he even knows he has a son. Why is that story bubbling around in my subconscious mind, even though I am comfortably retired and write a Christian personal finance blog? If the stories you tell yourself about money aren’t true and useful, you need to make an effort to find a better story. If the stories are both true and useful, hang on to them until you find something better. There is always a better story. Consider an unemployed coal miner living somewhere in rural West Virginia: If he makes the statement, “The mine is closed. I will never find another job that will pay enough to support my family,” might prove to be a true statement if he remains in his home town, but is it a useful story? It gets worse. As we tell ourselves these stories over and over again, eventually we begin to identify with our stories. In this instance, this man might come to say, “I am an unemployed coal miner.” Identifying with our own story can become deadly. If I am a Type II Diabetes patient, a cure would destroy my self identity. Did you notice I said my father is suffering from Alzheimer’s? The disease is not my father. Your problem is not you. Liberation is a possibility, but it will require a different story. Richard Branson, founder of the Virgin Group wanted to be an entrepreneur from a very early age. He sees possibilities where I would see only problems. Once after his flight from Puerto Rico was canceled, Branson chartered a small airplane and sold tickets to his fellow passengers to cover the cost. I would have cursed my bad luck and tried to get seat on the next available plane. For Branson, this was the inspiration for Virgin America, a small but growing niche airline. Branson told himself a story about how easy it is to make money so many times that he came to believe it. His net worth is something like $4.5 billion, not too bad for a kid selling records at a discount price. This got him into legal hot water, because the price on some of those records was protected by marketing agreements that limited discount sales. Well, his headmaster correctly predicted that Branson, a poor student with learning disabilities, would either end up in prison or become a millionaire. I have a friend who invests in rental properties. When he looks at a dilapidated little house requiring $20,000 in repairs and remodeling to make it habitable, he sees nothing but opportunity. He tells himself a story. The people who rent this house from me will not only pay the mortgage, but they will give me the house for free after they finish paying off the mortgage. I tell myself stories about broken toilets in the middle of the night and tenants who will throw parties for their biker boyfriends. Same property.
Same cost and opportunity.
Go ahead. I challenge you to look into the mirror and say, “My greatest fear concerning money is…” Write down the answer. Then continue to write down the stories you tell yourself about money. Without judging or blaming yourself, examine the truth and utility of your stories. Are they based in scarcity, fear, anger, resentment, envy or greed? Chances are they will produce fruit that you won’t want to eat. If they are based in possibility, abundance, generosity, good-will, and happiness found in the success of others, your stories are likely to carry you a long way towards financial freedom.
Stories are only words and words can be changed.