An Alternative Approach In Facing The Credit Crunch
Switched on to Finances -Claudio Jule
Money is only meant to be a means of exchange, but money has become a source of power and false pride, a way of measuring success or failure.
Maintaining emotional attachments with money means that you are more likely to react rather than being able to respond to your finances .
Reacting to Financial Situations
Why do so many people struggle with finances? With the current state of the world economy in crisis, and with the credit crunch, many people are living in fear, facing their worst nightmare of losing all their wealth.
"Money is, in itself inert. But everywhere it becomes empowered with special meanings, imbued with special powers. Psychologists are interested in attitudes towards money, why and how people behave as they do towards and with money, as well as what effect money has on human relations."(The Psychology of Money)
Personal Beliefs About Money
Quite often we take our beliefs for granted, without questioning. The beliefs you have concerning money could be the same as your parents and their beliefs surrounding money. Taking time to stop and consider what beliefs you hold around money is the first step in creating financial intelligence.
Some common beliefs are;
- "Money gives one considerable power"
- "I feel that money is the only thing I can really count on"
- "I worry about my finances all of the time"
- "I am proud of my ability to save money"
- "Money is how we compare each other"
- "Spending money makes me feel good"
- "Money can solve all of my problems"
- "Money is the root of all evil"
(Extract from The Psychology of Money)
Sorting out the Facts From the Fiction
A young woman roasting a piece of meat. Her young daughter asks her why she cuts the end off, and she tells her that everybody does that, it makes it tastier. Her daughter's questioning leads her to doubt her reasoning and she asks her mother why they cut the end of the meat before roasting it. Her mother tells her that her mother always did it, and she never questioned it. The young woman then goes to her grandmother to find out why and the grandmother told her that in her early days of cooking, they were very poor and only had a very small baking dish and the only way the meat would fit in it was to cut the end off.
Sometimes beliefs are simple and sometimes more complex. They may stem from times of the Great Depression or the World Wars, from refugee inheritance or some other traumatic event that caused someone to have an emotional reaction.
Finding New Beliefs
It is not how much money you have but what you do with it that reveals the intelligence. Spending in excess or living in deprivation are the two extremes, finding the balance means:
- Making a list of your own beliefs and then test them to see how true they are
- Recognise your emotions when you repeat your beliefs of money
- Start changing your beliefs concerning money
Emotions that are tangled up with money prevent you from reaching your desired financial goals. Financial intelligence is having a healthy outlook on money matters, being able to see that money is just an object, a way of exchange. Money does not meet emotional, physical or psychological needs. They need to be met in their own terms. Money does not give power or bring success either. True power comes from being able to be who you are and recognise your own intelligence and wisdom.
References: The Psychology of Money, Adrian Furnham and Michael Argyle,Routledge 1998.
