Your relationship with money is a relationship with yourself
Inheriting the choices of past-you
“Hey, remember how you majored in philosophy? And made zilch at your first job, and avoided learning about 401(k)s for a long time? Yeah, cool, just wanted to bring that up again. Wow… that’s kind of an expensive T-shirt you just added to your cart.”
At the most inconvenient times, your past intrudes.
It happens when you’re scrolling through houses on Zillow, or when you park next to a really nice car. Bumping up against your financial constraints can make you feel a surge of frustration or disappointment at the doofus you once were.
We inherit the choices and circumstances of our past, whether we like it or not.
I have a family member who declared bankruptcy in his early 60s. What began as a job loss was followed by physical and mental illness, years of unregulated spending, and increasing isolation. Other family members tried to talk to him, to help him—but though he could talk at great length about almost anything, he would not talk about money. The size of his debts grew, the collectors became more aggressive, and eventually he was forced to declare bankruptcy.
The consequences of our past are very real, but the stories we tell about ourselves often aren’t.
Even without the extreme experience of bankruptcy (more than 500,000 Americans filed last year), many of us imagine it would’ve been simple to take a different financial path. How could we have missed those opportunities? As if “personal responsibility” were a test announced in advance to be taken with a #2 pencil. As if my family member wasn’t fighting illness, stress, and the unpredictability of life itself.
Of course, compassion doesn’t erase the fact that what we did yesterday affects today, and what we do today will affect tomorrow. That part is undeniably true.
But judgment is like an invasive weed, creeping into every moment of disappointment or underwhelm.
Judgment creates villains and simple stories, when the past is usually far more complex. Look back on your own history: regrettable choices, yes. But bad intentions? Probably not.
At the risk of invoking Stuart Smalley, part of what makes a healthy relationship with money is learning to enter a loving relationship with your past self. Why? Because if money is an extension of us, hating our past spending is just hating ourselves. And how can you fund the life you really want if you don’t even like the person living in it?
I’d love to hear from you:
What’s a money decision you used to see as a “mistake” that you understand differently now?
Until next time,
Dan
I declared bankruptcy, didn't learn, and declared again in January of 2016. The second one just came off my public records. I am 62 and was diagnosed ADHD four months before I filed. One of the things that I learned with the diagnosis is that impulse control, rather lack thereof, is one of my top symptoms. One credit card survived the bankruptcy with a $1000 limit. I used it for everything and paid it off two or three times a month. It wasn't long before I was offered more cards. Eventually I had about 70k in available credit. Before anyone reading loses their mind over this, I have accidentally carried a small balance three times in 10 years and have paid less than $10 in interest. I use the cards for what they give me. At the moment it's VentureOne for the miles, I have friends who retired to Italy last year and visiting them will be my first trip. I used YNAB for years before the bankruptcy. Unfortunately I used it poorly. Since 2016 it has helped me gain financial health and my bank accounts no longer get to $5 before payday, there's always a couple thousand in my personal and business checking accounts. I paid off my student loans in 2022, thanks to an inheritance as the balance was 110k and I'd be paying for another 18 years had my parents not managed the money they inherited. My credit rating jumped from the mid 600s to 720. It's been bouncing around between 730 and 742 since then. Until two weeks ago when the bankruptcy was removed from my public record. It is now 809.
Do I occasionally wonder what my financial situation might be had I not had severe impulse control issues, sure. But recriminations don't move me forward, they only make me feel bad. Currently I'm reveling in the 809, which is silly as I'm not buying anything that needs a good credit rating. But I spent my entire life being the one in the family who is "bad with money." Turns out I'm awesome with money and removing the impulse control problem makes that talent shine.
From age 13 until age 47, I under earned and under saved. At age 13 I didn't ask my parents for name-brand jeans and fancy sneakers, but I did ask for a 10-speed bike. When my birthday came, I didn't get the new bike that I asked for; rather my dad found a (very good quality) used bike. But I internalized that I "wasn't good enough" for a new bike, and "wasn't deserving". And for the next 35 years I self-sabotaged my financial well being by under-earning. Paired with a mountain of debt ($692K!), our household was a financial house-of-cards ready to collapse with the next stiff wind.
17 years ago I read Build Your Money Muscles: Nine Simple Exercises for Improving Your Relationship with Money by Joan Sotkin. I unpacked the self-sabotage and began to treat myself and my finances with more respect. Together with another personal finance program, working a "debt-snowball", and a much better paying job, things began to change.
I don't beat myself up. I share my story often to inspire others who are feeling discouraged. I am not embarrassed - I was doing the best I could with what I knew at the time, including what I understood about my emotional relationship with money. When I figured out what was driving my self-defeating behaviors and became more savvy about budgeting/debt, I began to take LOTS of big and little steps in the right direction. I am now debt-free and ready for a secure retirement.
Keep going! It's going to get better one little step at a time!