CHAPTER 1
Set a New Course
The Money Nerve
It's time to create the new financial you. You are ready to leave thepast behind and confront your financial fears. Great news! You've alreadytaken the first step. You are reading this book to get new informationand new tools to potentially make profound changes in your financialsituation and your relationship with money.
Before you start any journey, you need to know where you want to go(your goal), what you have to work with (your beliefs), and what newthings you will bring (your new perspective). The first portion of thisbook explores your story through other people's stories. It's important tobring your story to consciousness so that you begin to take responsibilityfor where you are. This, in turn, helps you make clearer choices thatwill take you where you want to go—and allow you to realize your ownpower.
Embrace your story; own your story. Be willing to accept that you mightbe partially responsible for your current state of affairs. Be willing tomake necessary adjustments to get where you really want to be. Whetheryou want to have millions of dollars, own lots of property, travel, save fora Jacuzzi, or stop bouncing checks, you need to acknowledge your goals.After that, you must make the commitment to go for it.
In this chapter, we look at a couple of personal Money Nerve storiesthat illustrate how dramatically our finances are impacted when ourMoney Nerve is pinched. We'll see how those people took control oftheir financial fears by making different choices that better reflectedwhat they actually wanted to have in their lives. We then look at mentalmapping, the way in which we have programmed ourselves to think.
Understanding your mental map and learning to make adjustments toit is an important part of this book. Once you get an idea about howmental mapping works, you will have the chance to look at your processand start questioning what you really want ... and whether you arewilling to make the changes to get it. At the end of the chapter, you'llfind exercises that will help you identify your mental map. Be honestwithout being judgmental. Let's jump in.
Rich Mind, Poor Body
Andrea fell in love and moved away with her boyfriend, whom sheeventually married. He grew up in a very wealthy family in whichmoney was treated as disposable. Consequently, he was irresponsiblewith money. When money came in, he spent it like he was still awealthy person—even though, most of the time, he was broke. He wasan artist and felt his actions were consistent with being an artist. Hewas often a month and a half late with the rent and other bills. Andthen, unexpectedly, he would sell a painting for fifteen grand, pay thebills, and say, "I'm going to the Bahamas." They would live it up for twomonths and then find themselves back in the same situation, unable tokeep up with their bills.
Andrea said, "He always had a no worries attitude, and it stressed meout like crazy!" She realized that, for her to have more money andmore control, she needed to go back to school. She borrowed moneyfor school and completed her education to enable her to earn a decentincome. Eventually, the stress of their financial situation was too muchfor Andrea, and it contributed to their divorce.
Andrea took back control of her financial situation by budgeting so thatshe knew exactly how much money she needed to pay bills and coverexpenses each month. Once she knew what had to be paid, she knewhow much money she needed to make. She worked freelance and tookevery job thrown her way. No job was too small. If she earned moremoney than she had needed the prior month, she put the extra intosavings and pretended it did not exist. The next month, she plannedon how much money she needed to earn without factoring in the extramoney. That way, if she were ever in a pinch, she had a rainy day fund.
Now she is married to a man who is much more in alignment with herfinancial perspective. He is more practical with his money, and she ismuch more comfortable because they share the same financial goalsand strategies.
Faith Will Provide
John's father was a devout Christian and a pastor of a small church. Itwas a point of pride that the Lord always provided, even if John's familydidn't have a lot of money. Almost without fail, when winter came, amember of the church would approach him and say, "The Lord has putit in my heart to buy your kids winter coats." Thus, the family would getwinter coats. John's parents trusted God to take care of the family, andthey were always taken care of—just not on John's timetable.
When John was young, his family had a tradition: if you were passed adime and needed the dime, it was yours; but if you didn't need to spendit, it should be passed to someone else who might need it. They called itliving on faith. Looking back, John realized that, as an adult, he hatedcounting on people because, as a child, he had no control over whetherhis wants and needs were met. While the experience did not lessen hisfaith, it did help him recognize that he wanted a more active role in hisfinancial road map.
The fun part here is that Andrea and John are now married to each other.They traveled different roads to arrive at a similar point of view. Becausethey each had a solid belief system about money and very real modelsfor how they didn't want to live, they were able to move confidently andsecurely into their financial future together.
How Money Nerves Differ
There are two important pieces of information in these stories. First,neither Andrea nor John blamed the artist or the minister for theirdifferent ways of seeing things. Each belief system worked for the artistand the minister, they just didn't work for Andrea or John.
We all have different wants and needs. Some people have a strong desireto save for the future. Others want to live in the moment. We all havedifferent levels of emotional tolerance toward our present financialsituation. If your Money Nerve is being pinched, explore ways to releasethe tension.
Start to question your core emotional impulses when certain moneysituations come up. How do you react to an overdrawn bank account,seeing your newest credit card statement, writing big checks, creating abudget, buying something on an impulse? Do you always need to pay fordinner? Do you feel scared, empowered, ashamed, proud, angry?
Maybe you spend money to cover insecurities. Maybe you use money tomanipulate (for example, hinting to relatives that they stand to inheritlarge sums if they are in good stead with you). Maybe you give awaymoney to feel empowered. This is your journey. What emotions comeup for you when you think about money?
The second important piece of information is that our financialmaps—the mental maps we follow whenever we deal with finances-areabout choice. Andrea and John both chose to be more active intheir finances and to take personal responsibility for what they hadand did not have.
If you want to rely on faith or an impulse, go for it—but realize this bookis probably not for you. This book is for people who feel their MoneyNerve and want to be in the driver's seat.
Mental Mapping
Finding Your Way
When I first moved to Los Angeles, I assumed the fastest way to travelwas getting on the interstate. But instead of getting on the fastest route,I ran into bumper-to-bumper traffic. Still, I was comfortable with wherethe road was going. There were buffer lanes, no potholes, no twists orturns ... and I knew I would eventually get where I wanted to go. Fiftythousand other people were thinking the same thing, and none of usever really got up to speed.
When you have a map, there are several routes to the same destination.This book will guide you on your personal financial journey withthe help of a mental map. According to A Dictionary of Geography,"[A] mental map is a map of the environment within the mind ofan individual which reflects the knowledge and prejudices of thatindividual." You will identify your current mental financial position(or beliefs) and envision where you ultimately want to end up. Onceyou understand your financial mental state, it is much easier todetermine how you can adjust your route to get you to your newfinancial destination. You can change your mental map perceptionswith the knowledge you'll obtain in this book. Becoming aware ofyour mental map helps you recognize how you unconsciously divertyourself from your ultimate destination.
Once you are aware of where you sabotage yourself financially, you canbegin to change your automatic responses. As you start to consciouslyhear yourself creating roadblocks, you will be able to consciously rerouteyour mind to the course you have set for yourself.
Mental mapping your approach toward finances means rerouting theI-can't-afford-it mentality. I like the word mapping because we are all ona path. No path leads the wrong way. Are you taking the scenic route toyour financial destination? It might take you three times as long to getthere, but that doesn't mean you won't have a beautiful journey.
Interstate Mentality
If you have an interstate mentality toward finances, the only traffic thatexists is in your head. On an actual freeway, you can see hundreds ofcars ahead of you on the road. The roadblocks you have set up in yourmind tend to be less obvious. Nobody is setting out an orange cone withblinking lights telling you to merge your credit card debt.
An interstate mentality takes place when you try to juggle payments onseven credit cards, transfer money from one bank account to another,free up expenses on one credit card so you can charge more on it whileyou make a payment for another card, and wait for a paycheck to coverchecks you just wrote.
If you have a lot of different things going on financially, you have tostop to take a breath. Be aware of all the different moving parts of yourfinancial journey. You can't keep your foot on the gas pedal and thinkthat you don't have to worry about where you're headed. If you movetoo fast and stay too busy, you can lose track of your destination. Withmore going on, there are increased chances you'll get off your path andend up in an accident.
Slow down and make conscious choices. "I won't charge my credit card,I'll just skip going out to dinner this week." "Maybe I really don't needthree new outfits." "I should balance my checkbook." "Take a breath andfocus." (It's good to remind yourself to slow down.)
If you're driving down the freeway and everyone puts their brakes on,you need to be aware of the shift in traffic. On the scenic route, youcan fall off a cliff or forget to stop for gas. If you're too tired, you mightfall asleep at the wheel. You need to make conscious choices in yourfinancial travels and stay aware of your surroundings ... regardless ofthe speed you choose.
Financial GPS
When we get in a car and activate the GPS, we assume it knows wherewe are and will get us where we want to go. Yet from experience, weknow we can't always rely on it to be accurate. In order to make gooddecisions before going anywhere, we first need to know where we areand where we want to go. Similarly, to make good financial decisions,we need to break the GPS mentality and start thinking for ourselvesinstead of staying on financial autopilot. My college was near theMississippi River. I had a friend who had lived near the river his entirelife, and he did not know which way was east! In Los Angeles, I tellpeople which way is west all the time—I tell them to let the PacificOcean be their guide.
You may believe that your financial advisor and your accountant usesome kind of financial GPS to get you where you want to go. Even if theydo, you are ultimately the driver of your financial vehicle. I have severalclients who, in the face of grave consequences, have driven right off afinancial cliff despite having been informed of its presence. Collectively,most of us have become unconscious. You, as a reader of this book,are working your way out of that dream state. After you have appliedthe information in this book, you might begin helping other peopleapproach their finances more consciously.
Create a New Mental Map
Two different people could be riding next to each other in a convertiblecar with the roof down. One might be thinking, "I love the wind in myhair. This is the life." The other might be thinking, "There is no roof overmy head. This is so dangerous. I can't wait to get out of this death trap."They are both experiencing the convertible, but their mental mappingis worlds apart.
You can create a new mental map about money that will help you movetoward your financial goals. Your current mental map might tell youthat you can't enjoy your present lifestyle if you don't keep using creditcards. You don't care what the interest rate is. You could be paying 20or 30 percent on your credit card. If you curbed your expenses, thatinterest percentage could buy you a new car or a trip to Italy. Someoneelse's mental map might tell them the only way they can have a betterlife is to stop using credit cards completely.
The Power of Words
What Fuels Your Mind?
Words are powerful. Think before you speak. Listen to what you areactually saying and start to identify what you say consciously. You can'tchange where you want to be if you don't know where you are. I hearpeople say, "I need a TV," or they say, "I need to go to Hawaii." Butthose statements are not true. They are wants, not needs. They wantthose things. They need oxygen; they don't need the newest cell phone.Once you start to hear your own voice, you can begin to give yourselfalternative choices, which will change your mental map.
Little words can be more powerful than we realize. For example, the wordbut indicates a contrast or exception, and it can also negate everythingthat precedes it. Many of my clients say, "I want financial success, butI am afraid of it," or they say, "I want to learn healthy financial habits,but my folks never taught me about money," or even, "I want to standup for myself, but people might criticize me." That one little word packslots of negative power. I have worked to eliminate the word as much aspossible and replace it with the word and. Using the word and allowsboth situations to exist. It lets you have your fear while also feelingempowered. See if you can hear the difference. "I want financial success,and I am afraid of it," or say, "I want to learn healthy financial habits,and my folks never taught me about money," or state, "I want to stand upfor myself, and people might criticize me." You can be overwhelmed byyour finances and still move forward with change. Be aware of the wordsyou use. Making tiny changes can shift your views in powerful ways.
Listen to what you say about your finances. "I want to have financialfreedom, but I'm broke." You can reword that slightly: "I want to havefinancial freedom, and I'm in a financially hard place right now, and I'mworking toward eliminating that debt." You might hear yourself say, "Iwant to have money in the bank, but I have lots of debt." Replace that ina positive way by saying, "I'm working toward financial freedom, andI'm eliminating debt along the way."
Are You Really Sorry?
Do you apologize for speaking your mind? There's no need to if you doso respectfully—you're just being clear about where you stand. I have afriend who used to apologize to me constantly. She apologized for thingsthat happened to me that she had nothing to do with. If I lost ten dollars,she would apologize. She even apologized for apologizing. I finally madea deal with her: every time she apologized to me, she had to give me adollar. The first few weeks we were together, I ate breakfast, lunch, anddinner on her dime, her dollar.
When she started realizing how much she was handing over to me, shebecame focused. She began stopping herself. She stopped the automaticpilot in her head and thought about what she was saying. She would sayinstead, "Oh how interesting." Or she would say, "I wonder how thathappened?" She changed her mental map of always being responsible forthings she was not responsible for. She thanks me to this day for pointingit out, and I appreciate that she's no longer sorry. Changing her mentalmap took financial incentive.
