Money Mindset

As I write this, my dad hasn’t worked for the past two months, and honestly, it feels so darn good to see him take time off. My dad started working at the age of 12, is now 60 and still working hard in construction. While I’m incredibly proud to see him finally getting some rest, this moment also brings back nostalgic memories of times of struggle growing up.

I’ve shared my full money story here, but in a nutshell, I grew up in a low-income household. Maybe I don’t give my family enough credit, but we always managed to have what we needed, and for that, I feel blessed. A clear memory that still sticks with me is coming home from school and seeing my dad already there. If he was home early, it either meant he didn’t work that day or only had a half shift. I also vividly remember the time when my mom was laid off during the ‘08 recession, and the tough decision my parents made to withdraw from a “special work account” in ‘16 to make ends meet. It wasn’t until years later that I learned that they had pulled this money from a 401(k) account.

To be clear, my parents never practiced financial enmeshment—I was simply a curious, observant kid who couldn’t help but notice how these financial events impacted our lives. I understood the struggle and, even as a child, could sense the weight it carried.

The Impact of Early Money Memories

How has all of this shaped who I am today? There’s a study that suggests your earliest money memories may influence your current relationship with money. As I started my career and began earning more than both my siblings and parents, I was overwhelmed with feelings of guilt and shame. A part of me wanted to save every dollar, while another part wanted to splurge and enjoy life to the fullest.

This internal conflict is something many who grew up in low-income environments can relate to. It often leads people to fall on either side of the spectrum:

The Scarcity Mentality:

This mindset stems from a deep-seated fear of never having enough. If your life has been marked by one financial emergency after another, it’s natural to want to hoard money. Even when you’ve built a healthy safety net, there’s always that lingering worry—what if something goes wrong? Spending money on yourself feels indulgent, even wasteful, because you’ve been conditioned to think every dollar should go toward securing your future. People with this mindset often live focused on the future, usually saving for what might come, but they struggle to find joy in the present.

The Living in the Moment Mentality:

On the other end are those who tend to overspend to make up for childhood desires. After years of not having enough, they overcompensate by indulging in everything they missed out on as children. They may also overspend on their kids, wanting to give them the life they never had. This mindset often leads to impulsive spending, racking up credit card debt, and a lack of financial stability. These individuals live for the moment, prioritizing immediate gratification over long-term security.

Striving for Balance

Balancing these two opposing mindsets is no easy task. It’s good to save and plan for the future, but it’s equally important to enjoy life today. On the flip side, while indulging yourself is a healthy way to reward your hard work, you also need to ensure your future self is taken care of. Here are a few ways to start finding that balance:

1. Craft Your Money Story

• Understanding your past relationship with money is crucial. Reflect on questions like: 

• Past: What’s your earliest money memory? How was money discussed in your household growing up?

• Present: What’s been your biggest financial accomplishment so far? What’s a financial struggle you’re currently facing?

• Future: What kind of financial legacy do you want to leave for your family? What does that vision look like, and how can it change your life now?

2. Create a Spending Plan

Don’t live life on autopilot. A spending plan helps you align your expenses with your values and be intentional about your spending. A rule of thumb is to allocate your income as follows:

• 50% for essentials

• 30% for discretionary spending

• 20% for savings

3. Build a Strong Emergency Fund

Having 3-6 months’ worth of living expenses set aside in an accessible savings account provides peace of mind. However, adjust this amount based on your career prospects. Ask yourself: How long would it realistically take to find another job with similar pay if you were laid off?

4. Get the Right Insurance Coverage

While paying for insurance might not feel rewarding, having the right protections in place can prevent catastrophic financial loss. Make sure you have adequate disability, life, and property insurance. This way, you can safeguard both your present and future.

By understanding your money story, you gain clarity on the factors shaping your financial mindset. Striking a balance between enjoying the present and planning for the future is key to building wealth in a healthy, sustainable way.

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