Why You Need To Clean Out Your Junk Financial Beliefs (& How To Start)

Have you ever stopped to wonder where your beliefs came from? It could be any belief, not just a financial one. You may have the idea that you have to outperform everyone at work for recognition. You may believe that you’re a great romantic partner. The point is, we all have some ideas about our identity that are formed from personal experiences. Similarly, with finances, I’ve developed a certain set of ideas about money and its relationship to me.

There have been many moments in my life where I was just shocked by someone else’s beliefs. They always end up being jaw-dropping moments where I wonder if I’ve set the bar high enough for myself. Last year at a holiday party, a guy was talking about his goals and dreams and stated he wanted to make 50 million dollars and donate 90% of it to charity. I remember thinking it was a little crazy. I didn’t know him, so I don’t know whether he was the type who was actively hustling to get to where he wanted or if he was just a complete dreamer. While I can’t see myself in a scenario where I could ever care to make that much money, it also made me stop and wonder, what IF that was my goal? What would I be doing differently, how would I have to think differently, if it really even occurred to me that was within reach?

It made me wonder what role models did that guy encounter in life? What were his beliefs about money? In what other interesting ways did he define himself? If we feel we can’t make it to the level of wealth we want, what are the things holding us back?

Where Did You Develop Your Definition Of Wealth

Our first models of managing money are parents. But we don’t just adopt their money habits, we also adopt their mentality around building wealth and saving.

My parents immigrated to the US as graduate students. My dad started out working shifts as a night guard for our gated student apartment complex to make enough money to pay rent during school. My mom worked part-time as a waitress at a Chinese restaurant. Thankfully they spoke English, were well educated, and ended up in stable careers after graduate school.

Growing up they often said no to trips my friends and their parents would go on. My friends’ parents were investing in rental properties while my parents felt fortunate just to purchase the home we lived in. They did it to save money instead of keeping up with the Joneses. I remember what a momentous occasion it was when my parents finally caved and got DSL and a family cell phone!

Due to all these small actions and deliberate decisions to upgrade their lifestyle only in certain ways, they subconsciously demonstrated how they had built their wealth only through saving. We only had what we did because my parents prepped so far in advance by saving for it, it was really their only option as moderate income earners. To this day, my parents make less than I do combined.

And it was only until a couple years ago that I realized there were 2 sides to the wealth growing equation. My parents spent their entire careers in jobs that had very rigid pay structures. They barely ever got things like raises, so it had never occurred to me that wealth could be built by making more money. Maybe that’s why salary just never really mattered to me pre-college graduation. I knew you could live a comfortable life on any salary by being good at saving. The issue with focusing only on saving is you can never really increase your savings rate beyond a fixed point. You can only keep cutting down your spending and expenses so far.

My boyfriend grew up in a household that more apparently demonstrated the other side of the wealth growing equation. For the majority of my boyfriend’s childhood, his father was the breadwinner of the family. His father is a lawyer, and through him, my boyfriend subconsciously learned the power of wealth building through a high salary career.

After he began working, he was always able to afford the lifestyle he lived, but he neglected the saving half of the equation. He believed if he could always earn more, then there was no reason to deliberately focus on saving. The issue with focusing more on the wealth growing half of the equation is that it doesn’t prepare you to ever stop working. Going back to school or changing careers can even put you in debt because you need to take out loans or can’t afford the lifestyle you used to live when more money was coming in.

By identifying where we picked up our beliefs about how to build wealth, we can then figure out which parts of the wealth building formula we’ve been ignoring, giving us an easy starting point to level up our finances.

Identify Your [Negative] Money Beliefs

Looking at how my parents first formed my initial ideas around building wealth, I also realized I picked up some other not so healthy ways of viewing money. Growing up, my parents always encouraged me to be a doctor because of the career stability and salary. But I didn’t want to be a doctor.

My parents were so focused on selling the idea of being a doctor that it became the only path illuminated to me. In my eyes, I saw only 2 options: being a doctor and making money or being anything else and not making money. I suddenly developed many ideas of money being evil, money being something you only earn if you’re willing to sell out for it. I also started believing that money doesn’t matter because I just couldn’t fathom a life of going to school for 8 more years, being in debt, just to be a doctor, a profession I just didn’t see myself in.

I saw money and doing something I enjoyed as mutually exclusive. This view of money became so ingrained in me that by the time I learned about many other lucrative careers, even careers I could genuinely enjoy, I couldn’t even conceive of enjoying them simply because I knew they paid well.

It wasn’t until many years later, and multiple years of work experience doing work I didn’t love for terrible pay, that I was able to disentangle the idea of doing work I enjoyed and being paid good money to do it.

Question Your Junk Beliefs

You may have completely different negative beliefs about money. Some people may feel working a second job to make ends meet is beneath them. Or others may believe they’ll never be able to change their career at some certain age. We use examples of how this is true to reinforce our junk ideas about money, and we make excuses for why stories that don’t are exceptions.

I wish I had forced myself to open my mind a little more about the possibilities. Did younger me seriously believe that out of the thousands of careers out in the world, there was not a single ONE that I could both enjoy and make money from? It’s statistically unlikely! I simply didn’t want to do the hard work of finding out which careers were at the intersection.

Similarly, for any negative money belief, there’s probably at least some scenario you can realistically picture where your belief isn’t valid. It may take a ton of work to make that scenario happen, but it’s not as impossible as it may seem. Realize that there’s actually a huge difference between barely possible and impossible.

Dig Into The Experiences and Expectations Of People Around You

I remember in high school hearing stories about some kids being the first in their family to go to college or the first to be doctors. I remember wondering what the big deal was. Now I totally get it. It’s about the uncertainty. We take for granted so many examples that have been shown to us and the guarantee that things proceed in a certain way.

When you don’t even know how to submit a college application the “right” way, or you don’t know what the types of grades you should be getting to get into college, how can you expect it’ll be easy?

I saw this in myself when my friend said making $500k a year would not be enough for him. I realized later his expectations are so high because his father runs a very successful commercial real estate business. He genuinely expects to one day become a C-level executive or start his own successful business. I’ve never had such lofty dreams because it’s never even occurred to me that that’s possible. The distance between our beliefs about money and our career are miles apart.

Even with this distance, I realized that we aren’t so different to warrant such a difference in our potential. I remember reading about athletes that would break world records and suddenly other top performers in the sport would break the same record shortly after. That breakthrough moment where the status quo is shattered is so important, and the best way I know to do that is to read and hear about the experiences of others.

Empower Yourself By Thinking Of Something Else You’re Great At

Last year, I went with my boyfriend to a Tony Robbins event, and one my main takeaways was an exercise we did called the Wheel of Life. The premise is that there are roughly seven areas of our lives that we want to constantly improve, these include physical body, relationships, finances, etc. And for this exercise, we were to grade ourselves on a scale of 1 to 10 on where we are today vs. where we want to be. We were then asked to share these with the people next to us.

It was really interesting seeing how we all have a couple areas of life we feel we excel in, or that we feel “on track” to our ideal target. Then there are some other areas that we feel negatively towards or avoidant of. The woman next to me, a doctor who came all the way from France, actually marked finances as one of the top things she felt really negative about. When reflecting on why we were successful in the areas we felt good about, I remember being struck with the response well why wouldn’t I be good at x, I’m doing everything right! Yet when we were asked to think about why we were doing poorly in other areas, I had a million reasons that were stopping my progress.

Through the exercise, you really get to see that at the end of the day, you do really well at what you’re currently good at because you sought out the correct strategies and never really wondered whether an accidental misstep could ruin your progress. I certainly realized how much doubt surrounded all the things I felt badly towards that I wanted to improve on.

Now if I ever feel something is totally impossible, I think about how I feel when I think about my finances (something I feel pretty damn empowered by!). I think of how I don’t ever doubt that I’ll keep investing through a recession. I never doubt that I’ll be able to figure out the right thing to do, even if I don’t know what that is now. It occurs to me that I could lose everything (financially), but it doesn’t really occur to me that I couldn’t figure out how to start over.

If finances is that one thing you feel you can’t get a hang of, think of something else you’re great at. Think about how you feel when you mess up in the context. Think of how you feel at the prospect of failing, do you even think of failing at all?

Do you have any junk financial beliefs? What are they? I’d love to hear how you overcame them if you have!

Jing is an SF transplant, software engineer, and personal finance blogger. She’s weathered clueless spending, not-so-fun-employment, and a cross-country career change. You can find her documenting her financial wins and mishaps over at Millennial Money Diaries.

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