Understand Your Money Better With This Easy Tool

13/11/2015 8:30 AM IST | Updated 15/07/2016 8:25 AM IST
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India, Delhi

This article is from The Swaddle.


By Shweta Sharan

I first came across the idea of a money biography when I enrolled in a financial wellness program in Bangalore. I wasn't really sure if I was suitable for such a program - I was a mom who had been out of work for almost four years, with no steady income of my own and no savings whatsoever. I didn't have (and still don't have) a credit card and while I was so debt-free that Suze Orman would adopt me, the lack of personal finances was eroding my self-esteem significantly. My money management consisted of controlling petty household expenses and basic budgeting, oscillating between not keeping track of where the money went, to skimping and buying at thrift shops.

As it turned out, there is no 'right' type of person for such a workshop, and I learned a lot. An exercise called a money biography was particularly revealing, because it mirrors our unconscious money habits by helping us identify influencing factors known as money scripts, career messages, and role models.

Money and behaviour

A money biography consists of a series of questions about your past and how money played a role. Money biographies unearth your money memories, those you would never have known to impact your personal growth. In the workshop, I took the famous Money Quotient exercise, and it was a pivotal point in understanding my frustration with money. But there are many other such exercises, including Suze Orman's money memory exercise. Which exercise you use is less important than whether you undertake it at all. One of the questions in the Money Quotient money biography was, "In your heart, what do you want money to give you?" Your personal understanding of money is at the heart of this riddle.

Money scripts and career messages

To get to your own personal answer, it's helpful to look back at the 'money scripts' of your childhood. The book Wired for Wealth, by Brad Klontz, talks about these beliefs that are scripted early in our lives, which we tend to act out as adults, time and again.

"Many of our associations are hidden deeply in the unconscious mind," Klontz writes.

For me, money scripts took the form of clichés. My parents used to tell me, "Money doesn't grow on trees," and "It is better to save and be safe, than to spend and be sorry." Had I been taught to look at money with anxiety or abandon, my behaviour toward money may well have been different as an adult. Instead, when my husband and I played the Rich Dad, Poor Dad board game with another couple recently, I was the Safe Banker (a mythical creature, no doubt), while my husband and his friends were mechanics or school teachers buying shares, taking loans and charting sky-high financial goals. Obviously, this is hypothetical, but it showed me why I could not make the progress I desired: From childhood, the scripts coming to me about money were all about security and playing it safe.

The scripts that turn into behaviour are known as 'career messages.' My earliest money memory was when my mother gave me some coins to get sweets in a neighbourhood shop. I was 7 years old; it would be another 20 years before I first got my own bank account. My father had handled my family's money when I was young; my husband would take care of it when I was an adult. When I finally did open my own account at 26, I was flying blind; I didn't even know how to deposit money in a bank or how to cross a cheque. But over the years, encouraged by my husband, I have gone from knowing nothing, to opening fixed deposits and a PPF account for my daughter.

Role models

A friend I met in the workshop was a mother, had borrowed heavily from banks, owed huge debts and was risking a good deal to pursue an MBA from a prestigious university in America. She was skeptical; how could looking back to her childhood shed light on her problems now?

My friend came from a very modest background in Kolkata. Her parents were very strict with money. When she was living in the Ramakrishna Ashram in that city as a teenager, she fell sick with measles. The only person who came to her rescue was a 50-year-old American woman named Susan, who took her to the hospital and looked after her. A wealthy woman whose own children were settled, Susan took my friend under her wing and adopted her, in a way, lavishing expensive clothes, gifts and a luxurious lifestyle on her.

To this day, my friend believes that money will appear out of thin air. She still believes that an invisible hand will bail her out of tough spots, even as she has amassed debts to the tune of 30 lakh rupees. Our role models - for my friend, her benefactor - shape our money beliefs and set the bar for our own views of money, and not always in the best manner.

With all of these subtle forces at work, it can seem like an insurmountable task to change our practices and ideas about money - even if we recognize we need to. But it is possible, and money biographies can help us become relatively positive money role models for our own children.

How money biographies can help you

Money biographies can help us identify possible obstacles to understanding what we need to do to ensure our financial well-being. A friend, whose parents divorced after his mother inherited more money than his father, to this day views money as a source of disharmony. "Maybe it's because of this fact that I believe money changes people for the worse," explains my friend, who asked not to be named. "I still find it difficult to talk to my wife about money. I told her that money divides people."

They can help us understand our own personality. Sudheshna Kohli was brought up by her grandparents. Her grandfather went from owning five vintage cars to making do with a scooter. A very generous man who invested in stocks, he was forced to be frugal when family finances went south. Sudheshna possesses the same generosity and sense of adventure as her grandfather, becoming, in her own words, someone who has lived with both feast and famine.

Money biographies also reveal not only how you spend your money, but why. I asked Rajesh Mehar, a father of two, what he was taught about money when he was growing up. He says, "I find that I want to use money meaningfully. My own parents would use their money to help domestic workers."

Finally, money biographies make us face bold and pertinent questions. Was money a source of conflict in your house? Was it used for reward or punishment, control or survival? Which money habits brought you closer to your goals? Are you more of a spender or a saver, a worrier or an avoider? These questions humanize money and make it more manageable - if money is tied to behaviour, then changing one will definitely impact the other.

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