What Drives My Money Behavior?

Have you ever wondered how your beliefs and attitudes about money are different from those of your friends and family? Probably not. But have you ever wondered how someone who seems to have similar resources to you is always out buying new stuff that you don’t think you can afford? Or conversely, how your friend who has a great job never wants to spend money on fun experiences or nice vacations? Likely you have. Behavior with money is driven by beliefs and attitudes, which may be very different from one person to the next, even if those people have the exact same amount of money. Yet these beliefs are not something most people spend time thinking about, or are even aware of. They are formed over the course of your life and can be based on experiences, cultural norms and observing those around you (like parents and grandparents).

Although talking about money is taboo in many families, you still learn a lot in your early years by watching how your parents handle money. And how they handled their money was probably shaped by things they saw their parents do. If there was financial trauma in the family history, that can be passed down through the generations without anyone realizing it. Additionally, cultural norms may have a strong influence on how your family handles money. In some cultures, public displays of wealth are admired and aspired to, while in others, it’s more important to share what you have with your community. The way you manage your finances today is likely shaped not only by what you have experienced over your life, but also by generations of people before you.

Interestingly, the same money experiences can lead to different outcomes in different people. For example, if someone grew up very poor but then gained financial security as an adult, they may scrimp and save, worrying that they could lose their job or experience another financial hardship at any moment. Conversely, that same person can become an extravagant spender, feeling that they deserve the things they couldn’t have as a child and ignoring the risk that their financial situation could change again. This can also be seen with people who grew up with lots of money. They can go on to be over spenders even if they no longer have those same resources, or they can feel shame about having more than others and not want to spend or display their wealth. While you may have grown up in the same financial situation as your siblings, you may all handle money very differently as adults.

Spending time thinking about your experiences with money, including what you learned from your family, can be helpful in understanding your current behavior. Are you focused only on enjoyment today, disregarding what your future needs might be? Or are you putting off everything you want today so that you can save for the future? In either case, being aware of what is driving you can be powerful. Armed with knowledge about your beliefs, you can learn to enjoy life today while also doing things that will set you up for a financially secure future.