Your Money SCROOGED: The Ghost of Money Past

Many of you know that I often think about how our emotions impact our financial decisions.  As the Holiday Season is upon us and I was sitting at my in-laws’ house, I came up with a different construct about how to think about money.  While I am developing a new paradigm to explain our planning process, I was thinking about money in a Dickensian way, like A Christmas Carol or the 1988 movie, Scrooged.  In handling money, we all have to deal with three ghosts:  The Ghost of Money Past, The Ghost of Money Present, and The Ghost of Money Future.  While Bill Murray isn’t here to play Frank Cross, I will try to explain how I think about these concepts and how they affect you and your relationship with money.

The Ghost of Money Past

Past Money Ghosts are easy to understand when you see them.  How much money did you have when you were young?  Did your parents spend a lot of money or a little?  How much money did you have in comparison to others in your neighborhood growing up?  Did a family member make a great investment?  Or lose a lot of money because of a poor one?  Was there a sudden death or illness of a family member or divorce that significantly affected the financial fortunes of someone else in the family?  How did it feel when you were told you couldn’t have something because of money?  Did you understand why? 

As a child, I grew up on the fringes of a wealthy neighborhood, but my mother (my parents divorced right before we moved there) had put everything into paying for the home, as it provided a substantial improvement in educational opportunity for my sister and I.  As a result, there was little money left for other things.  For whatever reason, whenever I would ask for something and she said no because of budgetary reasons, I just got it.  It was never a big deal.  When it came to my peers, I never understood why they needed to have the fancy clothes and cars (as we got older).  It didn’t seem necessary.  It always seemed as if they were flaunting their money.  At some point, I resolved that I wanted to have a lot of money, but never flaunt it.  In your past, what events in your life caused you to solidify your money attitudes?  How do those events affect what you do with money today?  When you can understand your Money Past, it makes it easier to move to your Money Present.

If you believe that discussing your money past may help you improve your financial situation, perhaps a conversation is in order.  Reach out today and we’ll discuss how to improve how you think about money.