There is an emotional element in our attitudes and decision-making around money. And when that element takes over, financial challenges like overspending can occur.
In this episode, Dylan walks us through the emotional wounds that lead to overspending, the ways we fall victim to them, and how we can take back control over our personal finances.
- [03:05] The four things that are at the root of most people’s overspending
- [04:29] How the childlike excitement over having money dovetails with overspending and retail therapy
- [07:08] How having more money than normal can inflate our sense of safety and security
- [10:10] On the idea of nobility in poverty
- [15:41] Self-doubt about money and how it leads to overspending
[00:00:00] Intro: Forget the civilized path. It’s time to break the change of debt and dependency, take control of our financial lives, and live free. This is the Fiscally Savage Podcast.
[00:00:15] Dylan Bain: Hello and welcome to Fiscally Savage. I’m your host, Dylan Bain. And today, I wanna start off with a story talking about the time where I’m sitting on my computer doing month-end finances. And I’m staring at a negative balance in my checking account. I had always worked very hard to make sure that by the end of the month, my checking account had enough money to carry me through for the next month. And so, coming into the end of a month with a negative balance was akin to a catastrophe — an absolute devastating catastrophe. And what made this so hard was I’m sitting there thinking, what the hell? This was a month where I had more money come in than any other standard month. This was a month where I had three paychecks and a little bit of an extra bonus. So, where did it go? I mean, it shouldn’t be mathematically possible, right? And so, I’m deciding that I’m gonna shift through all of my finances and find out where all the money went because there’s gotta be an error — that’s what I’m thinking to myself — that the credit card company must have made a mistake. The bank has to be wrong. And over the next three hours, I found where the money went to. I had, in my mind, known what my extra paycheck would be and what that little extra bonus I got that month was and I had spent it three times.
[00:01:47] Now, ladies and gentlemen, let’s go back and unpack that story because today, we’re gonna be talking about the wounds we carry around money. This is not going to be a one-off episode. We’re going to come back around to talk about this quite a bit because here at Fiscally Savage, we’re looking to help people take control of their financial lives and live free. And in my experience, over five years of financial coaching, people’s emotional wounds are the biggest barrier to their financial success bar none. It’s not about being able to understand how to run a spreadsheet. It’s not about having a good budget. It’s nine times out of 10 — I would even say 99 times out of 100 — it’s the emotional wounds that are the barrier to people’s financial success. So, let’s unpack the story at the top of the show. Why did I spend that money three times? And it was actually probably closer to 3.5. So, what gives? Because I know that my story is not a unique one. Other people have done this repeatedly in my practice where we sit down on the budget and they go, “I don’t know where the money went.” Okay, well, give me your credit card statements, give me your bank statements. I sit down, I do my accounting thing, and there it is. They’ve spent the same amount of money multiple times. And I’ve thought about this a lot because every time it happens, there’s always these overwhelming feelings of shame.
[00:03:05] And I’ve come to the conclusion that there are basically four categories and we could always split an infinite number of hairs on this. But there are basically four categories when people are overspending that are really at the root of that. And they are the “I have money.” You know? This idea of like, hey. We’re in the money. Cha-ching! Let’s go out and spend it. Number two would be “I’m not used to seeing that amount of money in my account, so therefore everything in my life must be fine, right?” Number three would be “I’m the hero of my own story and what a good boy I am for keeping the wolves from this door again this month.” And number four, and by far the most popular category, “I don’t deserve that amount of money.” All four of these are coming from old wounds, typically suffered in childhood that were never repaired or processed or integrated into ourselves. And I wanna be clear that as always, we do not pass judgment on our wounds. We deal with them as they are. It is important to be clinical and not critical when you’re looking at your money story and what wounds you’re carrying. Because otherwise, all you’re going to do is rewound yourself over and over again. And that rewounding will lead to scarring, and scarring is way more difficult to deal with.
[00:04:29] So, let’s go through all four of those categories and just unpack them, bring them out into the light so that we can see them a little bit better. So number one was the “I have money” effect. This is the childlike excitement. I’ve got money. I’m excited. I want to go buy that thing. And so, it kind of dovetails to like when it was our birthday or it was Christmas and we got that card from grandma that’s got that $5 bill and she said, “Honey, don’t spend it all in one place but you go treat yourself, little guy.” Man, who doesn’t have one memory somewhere where somebody gave us a little bit of money and our mind was full of all the sugar plum fairies that we could buy. It was as if we had arrived and now we were going to get to enjoy this. And it dovetails with the concept of retail therapy, the observation that by spending money, we improve our mental and emotional health. And so, when you have a bonus or a third paycheck in a month, you look at it and you’re like, “I’ve got all the money in the world. It doesn’t matter. There’s no way I can spend it.” And we will do things, some of them very needed things.
[00:05:39] And I know in my life, you know, having gone through four years of being on welfare and food stamps and working three jobs while my wife was in graduate school and raising a family, well, there was always a lot of deferred maintenance. So whenever I had money, it had to go towards that deferred maintenance. So, it would either be paying down credit card debt that I had accrued because I was short every single month even in the best of months or my car finally needed an oil change and I just had to go get the materials to go change the oil or, as in the case of one very specific month in February, the window of my car had fallen off the track and I had to drive around with the window down, which is extremely cold in Flagstaff, Arizona in the wintertime. But when I finally got that extra paycheck in that month, I was able to buy the tools to take the door apart and fix the damn window.
[00:06:29] The other side of this, of course, is that we start thinking, well, you know, if I just hold my spending normally and, you know, don’t actually go overboard, I can be fine. But I can say “yes” to watching the football game at the park and actually getting a beer and some chicken wings this time. Can I? Well, one thing leads to another and this is how you can easily spend that same amount of money multiple times because in your head you fixed it of I have $500 this month more than I did before. So, that $20 purchase? Well, it doesn’t matter ’cause I got $500 more than I normally do. Well, you can see how this can add up pretty quickly.
[00:07:08] So, number two on this was “I’m not used to seeing that amount of money in my account, so everything’s fine, right?” And I’ve said this before in the show and I’m gonna say this a lot, you know, today and in the future. But if you think of Maslow’s hierarchy of needs, that’s the hierarchy of human needs — physiological needs, safety and security, relationships, esteem, and self-actualization — it’s a pyramid because, of course, those physiological needs are the biggest, widest part of that pyramid. Your money situation is the ground on which we built the pyramid in the first place. So, when you suddenly have more money than normal, you’re immediately going to feel more secure because that pyramid is on better ground.
[00:07:47] There’s a sense of safety and security that large payments come in with and then we feel a need to indulge. And part of that is because retail therapy works by tricking your monkey brain into believing that there’s abundance that isn’t there. This is why it’s so effective because you’re feeling scarce. You’re feeling dysregulated. You have this feeling that things are not safe. I go buy something. I put it on a credit card, so I’ve actually, I don’t have the energetic charge of actually having to physically hand over something. And it’s no wonder that retail therapy didn’t arise as an actual method of therapy until the 80s when credit cards became normal. But there’s an energetic exchange when you give cash. You understand that you gave something up. Credit cards psychologically don’t operate the same way. And so, when you get that large payment, you think, “Everything’s fine. And now, I go buy something on a credit card or a debit card.” There isn’t that energetic exchange to buy the money and yet you maintain that feeling of safety and security. And so, again, it’s very easy to start spending the same dollars multiple times because, again, I got paid an extra $500 this month. An extra 20 bucks isn’t gonna kill me. Well, there’s only so many times you can get away with that.
[00:09:05] Number three is the “I am the hero of my own story and aren’t I a good boy for keeping the wolves away from the door this month?” This is one of the hardest ones to work with, okay? When you have the childlike excitement of “I have money,” all you really need to do to start working with that is to jump on board with the inner child and move forward with him and actually indulge in childlike security but to be the parent that your child actually needed at that time in your life — not the one who’s gonna harshly punish you, not the one you had, but the one you needed. When you’re dealing with the second one that you’re not used to seeing that amount of money, this is an opportunity for education and to be actually be able to learn how to use your own psychology and those feelings of safety and security to create greater feelings of safety and security by proper budgeting, savings, and having a financial strategy. But when you have somebody who’s the hero of their own story, again, in my experience, nine times out of 10, they’re gonna deny that this is what’s going on.
[00:10:10] So, let me just paint the picture. Now, there’s a book called Wild at Heart. And in that book, the author states that deep in his heart, every man wishes for an adventure to live, a battle to fight, and a beauty to rescue. When you are under financial stress and you get to the end of the month and you barely eke out a living, if you barely make all those bill payments, there is a sense of accomplishment that you have come in just under the wire. It’s the great story of all the sports movies we see where like, oh, it’s so in doubt whether they’re gonna make it and they just barely make it and they win the day and there’s the cheering and the music comes up. We like to live that in our own lives. And the problem that we face is that we become addicted to that. It’s the idea that you might not be bad with money, you just might be addicted to scarcity. And this is where we see it the most. Because if you end the month up on the game, if you end the month with four figures over what you needed, well, then, you didn’t do anything heroic because there was never a struggle and the end was certain.
[00:11:18] And so, we have this idea, this false sense of nobility, that by being poor, our continued existence is somehow a heroic journey. And people play into this all the time. And so, when that extra money comes in, you, of course, have to spend it to get rid of it because, again, you’re no longer the hero of an epic adventure if you have abundance at the end of the month. And this goes both ways, and this is where you can see this play out. I’m gonna use the starving artist motif because it’s really a great way to showcase this. I’ve had artists come through Fiscally Savage and say, you know, my art sells really well, I think, and I just want to be able to make art all the time, but I’m still stuck having to work at Starbucks and I don’t like it. Okay, cool. And when I start telling the artist, you have to promote yourself. You have to put yourself out there. You have to make value proposition for your art because I agree with you, it is very good and it sells at the prices you’re selling it, but those prices are never gonna pay your rent. And, to be entirely frank, you’re far more high value than just this. They resist it. Because there is this idea that the starving artist is struggling for their art. And if you’ve ever looked at any of the artists who were successful in their lives, they were self-promotional geniuses. Everybody from Frida Kahlo to Salvador Dalí were self-promotion geniuses. They marketed their stuff very effectively and charged an appropriate amount for it. So, that really just kind of undercuts the idea of the starving artist.
[00:12:53] It’s the same thing in music. People who are really trying to make a living with music versus the people who are sitting there continuing with the idea that if they somehow become successful, then they’re not a real artist because they’re making money and everybody knows artists, real artists at least, well, they starve. The flip-side of this is that the consumer of this think the exact same thing. So, the starving artist has this false sense of nobility that their art is is only worthwhile if they have to horrifically suffer for it, which, of course, means that they’re not gonna be economically successful. But we as the public don’t wanna pay for it because if we somehow pay for it, it’s somehow degrading the false sense of nobility of that person’s art. Both sides of these equations are wrong, okay? It’s rare that I’ll sit there and say, “Nope, nope. This is wrong.” But it is. There is no actual nobility by undercutting yourself so you can always maintain a scarce scenario for yourself just so that you can have a false sense of nobility. And on the other side, there is nothing noble about not paying people because somehow it’s going to increase their station. And I’ve heard this actual argument about teachers; that if we actually paid teachers appropriately, well, then, we’re not gonna get the best and the brightest ’cause they’re gonna do it for the money. Well, as I’ve said before, I’ve got 99 problems and when I was a teacher, money would’ve solved actually every single one of them.
[00:14:20] And so, when you start thinking about this idea of this nobility in poverty, there isn’t any. Poverty sucks. There is no system in the United States that’s quite as humiliating as being on welfare. And I speak from personal experience. I’m an incredibly intelligent guy. I am very smart. I understand systems. I navigate bureaucracy with the best of them. After all, my current job, at least on the corporate side of things, is an accountant. Like, this is what I do. My wife is a PhD-level engineer. And I will promise you that both of us frequently found the welfare system to be the most confusing and dehumanizing thing we’ve done in our lives. There is no nobility in constantly being in a scarcity situation. Artists, if you’re listening to this, you deserve to be paid for your art. You deserve to demand what you’re worth, so make sure you’re adding the value. If you’re on the public side of this, make sure you’re paying that person for the value that you’ve received. And this is my side note on it. If you’re ever walking down the street and a street performer gets you to stop for any reason, you owe them a dollar because they have just entertained you for at least that moment in time.
[00:15:41] But let’s move on to number four and probably the one that most people are familiar with and the one that I have to deal with the most when we’re coaching because it is the biggest fear. And that is “I don’t deserve the money.” After all, money is the root of all evil, right? Well, that quote is a bastardization of a Bible quote. And anybody who knows me personally knows that like one of my favorite things in the whole world are quotes that people state as if they’re somehow fact without understanding the entire meaning of the phrase.
[00:16:12] Let me give you a couple of examples. “What’s good for the goose is good for the gander.” And that statement is said with the idea that like if it benefits the individual goose, then it must benefit all the geese that are in the area. And we see this and people say this in economics and money all the time. It’s the idea that like, oh, we can’t raise taxes on that one person in a way that would never affect me personally because that wouldn’t be good for that particular goose. Well, the actual phrase is not “What’s good for the goose is good for the gander.” The actual phrase is “What’s good for the goose is good for the gander until the cat shows up.” And that is, this individualism is all great, fine, well and good until shit goes sideways and then it’s not gonna work because the gander actually has to work together. Let me give you another one. Well, you know, “blood’s thicker than water.” Yeah, that phrase is meant to say like, oh, yeah, well, family ties are always gonna trump everything else, but that’s not actually what the phrase was. It’s that the “blood of the covenant is thicker than the water of the womb.” And that kind of changes things now, doesn’t it? Because when you start talking about this, the “blood of the covenant” is not necessarily talking about something religious. It’s talking about the free association — the bonds that people will freely enter into — is going to be stronger than the family relations that are taken for granted.
[00:17:30] And I bring those two phrases up — and there’s a whole lot more — because it’s exactly this money is the root of all evil. Because the actual phrase is that the love of money is the root of all evil — not that money is evil, the love of money. These are fundamentally different things. And while there are plenty of people who preach the prosperity gospel who then take that whole phrase and completely bastardize it, the point in the Bible is that when you start valuing money over your fellow humans, that is the point in which it becomes a problem. That is to say, when you consider profits over people, this is when you’ve crossed from good to evil. That was the entire phrase. But the idea that money is the root of all evil is instilled in people at a very early age. We all have shame from childhood around money. I promise you it’s there. Everything from “No, Billy. You can’t have that packet of Big Red gum. And why are you asking for it? Don’t you know how expensive everything is?” — that’s a phrase I’ve been hearing since I was a little boy — to, “Oh, well, you just went and blew all the money out the windows.” This, of course, meaning that like, oh, well, you don’t deserve that money. You can’t be trusted with it. You’re irresponsible. This list goes on and on and on.
[00:18:47] And I’ve heard it over and over again, most of all in myself. I have frequently thought that I don’t deserve to make as much as I do at this point in time. The family connections that we have to money are huge because our families of origin inform how we think about money. And this can go in multiple ways. I never had anything growing up, so therefore I’m gonna make sure my kids have everything without question. Or I never had anything growing up and look at me, I turned out just fine, so I’m gonna make my kids feel like they’re poor, too. Or I was given everything, but I never really understood the value of a dollar, so I wanna make sure my kids actually understand a good, honest day’s hard work. I mean, when you get right down to it, the question of whether or not you deserve the money is irrelevant. If you have the money and you didn’t hurt anyone to get it, that’s your money to spend. That’s the bottom line.
[00:19:48] And when I talk about these four, the I have money with the inner child stuff, or I now have a large amount of money, so everything must be fine, or I’m the hero of my own story, or I don’t deserve the money, I have lived all of those scenarios multiple times until I actually started on my money journey when my principal asked me to commit fraud. I have, with childlike excitement, just blown through the money. I have completely figured I had arrived and stopped keeping track of it. When my wife and I were living in Flagstaff and I was working three jobs, I had this entire hero story about what an amazing husband and man I was to suffer and work so hard. And I’ve often frequently thought that I don’t deserve the money that I make. Or at least I didn’t until the day that my principal asked me to commit fraud and I realized that no, if I wish to take control of my life and live free, it’s time to say goodbye to these wounds. It’s time to start healing them. It’s time to get my money situation in order so that I don’t have to be under the coercive effects of people who do not have my best interests at heart. And chasing the dollar is hard. Chasing and looking at it and saying, my money represents stored power, represents stored time, is a foundation in which I can build a better life for myself and my kids, my community. Money is the thing that’s gonna enable me to be able to show up better in every aspect of my life.
[00:21:29] When you start thinking in those terms, these wounds are gonna show up. And when they do, it’s time to heal them. A big part of what Fiscally Savage is as a business is helping people heal those wounds one wound at a time. And I know what it’s like to have to go through and work on each one of these wounds and I know what it’s like when you start to make progress; how scary it can feel as you start to separate yourself from what was your present and now starts to become your past and that past is no longer determinant of the future that you’re building. I know how that feels because when I was closing my books after my first year of public accounting, I was looking at the net worth calculation on my personal balance sheet. And I had realized that my net worth had increased by a whole digit. I had gone from a three-digit net worth to a four-digit net worth. And in that moment I had a complete flood of emotions. I mean, everything from, “Wow! We’re finally making progress. We’re finally moving forward” to “Oh my god, we’re never gonna make it. There’s so much more to go.” And I took a moment in that time, ladies and gentlemen, to just breathe; reflect on where I had been and where I am and where I was going; and realizing the system that we had put together, my wife and I, was working. And it was working faster and faster every year.
[00:23:05] And, ladies and gentlemen, as I close the books on 2022, despite everything in the markets, I have again changed the front digit of my net worth. And I have changed the front digit of my net worth in a positive direction for five consecutive years. Ladies and gentlemen, the emotions are real. The wounds, a lot of ’em are still there, and they still smart. It’s not an easy path to walk. To increase your net worth to create a foundation that allows you to show up in this world as you know, you’re meant to show up as, it ain’t easy. It’s just worth it.
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