We all have money baggage, even the friend who is super savvy with money or your sibling who is excellent at saving. Our perceptions of money form at a young age because when we’re children, we absorb everything we see, hear and experience, and all of these things come together to form our beliefs.
Then, as we get older, these beliefs become more ingrained in our subconscious mind. They start to inform our behaviour, which creates our own unique financial reality, and we’re left to navigate our finances using the mental money map that’s formed throughout our lives.
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Money baggage is entirely separate to our numerical financial reality. That’s why you can feel stressed and anxious about money even when you’ve got a steady income and savings in the bank, or why earning more money doesn’t ever make you feel more secure.
Many parts of our money baggage can go unnoticed in our everyday lives, and it’s not until something external activates that baggage that we realise it's there.
Here are four things that can activate your old money baggage, and how to overcome it.
1. Losing money
When we lose money, either through error, theft, a big expense, or a narrowing in the gap between our income and expenses (like a pay cut), a lot of feelings can show up.
Nobody likes losing money, but if you find that bigger narratives are at play when you experience financial losses, it could be worth investigating.
When money becomes more scarce in reality, this activates our natural scarcity bias, and can impact the way we see money more broadly, as well as how we view our ability to receive, hold and manage it.
Losing money might activate a latent belief that money always leaves you, that you have bad luck, or that hard work won’t ever be enough because something will always go wrong.
Spending some time acknowledging these feelings and marrying them up to memories from your life can help give you clues as to what’s really coming up.
2. Receiving money
We’re generally quite comfortable with the idea that losing money or taking a pay cut would bring up some financial stickiness, but we’re less aware of how the same can happen when we receive money.
When we come into money, whether it’s a $10,000 pay rise or a $1 million windfall, our beliefs about what that money represents are activated.
You’ll likely be presented with ideas around whether you deserve the money, what other people think, how it affects you who are as a person, or how to manage it wisely.
Self-belief and trust issues can present here too, and if you’re a chronic avoider of your finances, the requirement to manage this new money can be quite confronting.
3. Witnessing other people’s financial wins or losses
Seeing people around us experience financial wins or losses can also activate our own money baggage issues.
We might absorb a misplaced fear when things go wrong, or feel intense envy when things go right. How we feel about other people’s experiences can uncover the limitations we subconsciously place on ourselves, and conflicting beliefs about our worth when it comes to financial success and stability.
4. A big life change
A big life change can cause money baggage to shift in transit because moving into unknown territory can make us feel vulnerable and allow our old money wounds to creep in.
Life changes such as moving overseas or interstate, getting a new job or changing careers, meeting a new partner, buying a home, getting married, starting a business, losing a loved one or anything that requires a new way of operating can activate past money baggage issues.
Life changes can also be tied to our identity. Becoming a parent, getting a new job, changing careers, getting married, getting divorced – any change to the way we see ourselves can translate to a change to the way we see our relationship with money.
Money baggage is unique to each person, so there’s no one size fits all way to overcome it. The first step is opening your awareness to when your money baggage is showing up, and from here you can start to piece together what that means about your relationship with money.
It may help to share your feelings with a trusted friend or family member, or bring your money baggage into your mindfulness practice. This can involve money journaling, thought tracking, or even discussing money themes with a psychologist or counsellor.