"I blame my mother." "Everybody else is doing it." "The little voice in my head told me so."
It's easy to brush off bad behavior with these time-honored yarns. But all eye-rolling aside, our families, the Joneses, and even that persistent little voice really do wield a fair amount of influence over our daily money decisions, say the authors of The True Cost of Happiness: The Real Story Behind Managing Your Money.
It's the failure to examine how such dynamics affect financial behavior that gets people stuck in the gap between wanting to change their behavior and actually changing it.
"There's a huge disconnect between what people really want out of their lives and the ways in which they conduct their financial lives," says financial journalist Stacey Tisdale, who co-authored the book with financial life planner Paula Boyer Kennedy. "Bringing mindfulness and awareness to your finances helps you bridge that disconnect and allows you to redirect your resources toward what is really important."
So, back to your mother. Only this time I'm serious.
The authors emphasize the importance of recognizing the strongest influences on our adult behavior. Cue parents (or your primary caregivers). Long after they stop bankrolling our food, clothing and shelter, mom and dad can have a profound affect on our adult financial behavior. That's not necessarily a drawback, of course. The trick is to recognize the valuable influences that guide your money decisions and ignore the ones that cause you financial harm.
Don't assume that you will need an extreme money makeover. Just start with small steps.
Below are excerpts from my interview with the authors of The True Cost of Happiness and their advice on the best way to handle the most common money baggage.
Respect mom and dad; but don't blindly follow their cues
Stacey Tisdale: Your model of what you do with money came from those very first lessons that you saw. I was overwhelmed in my research for this book by how much of that came from the ways in which our primary caregivers relate to money.
Case in point, my parents grew up poor and black in the south in the thirties and forties, so as they were growing up, at some level, on some unconscious level, they had to tell themselves that they were not going to let money stand in the way of what they really wanted. They were not going to let money be the reason that they didn't have certain things and do certain things with their lives. I grew up seeing that, so I grew up with the message -- don't let money be an obstacle to what you really want.
That message has some curses and some blessings. The blessing is I probably wouldn't have taken the past four years and freelanced and written this book and stayed home with my child if I let money be my sole guiding force. But on the curse side, there are probably some times when I should have looked at the financial consequences. Me becoming aware that that was at work in my adult financial behavior gives me that "Oh, that is what is really happening here," and at that moment, I can make a different choice.
Don't be afraid to ignore the standard set by the Joneses
Paula Boyer Kennedy: There's a tinge of fear in the messages all around us: We're told we need to have certain things or else we won't be happy; that if we don't send our children to certain schools they won't be able to compete; that by not driving the very best car there's no evidence of our success.
ST: That fear is blinding, and, because we are comparative animals, we subliminally follow those influences. If, for example, you are driven by wanting the best for your family, take an honest look at what that means to you. Define what "best" means to you -- not what society tells you is best.
Turn down the volume on that little voice in your head
Tisdale: We all have various "songs" we play in our heads when it comes to money. A common song is, "I will save for retirement when I have a bigger salary." One about investing is, "Investing is for the wealthy." It is important to be aware of those tunes and turn down the volume on those that do not serve your higher goals.
Determine when enough is really enough
Kennedy: As a planner, what I used to hear all the time was people telling me if they only earned 10% more a year, everything would be just great -- life would be just fine. A year passes and they earn 10% more and they still need to earn 10% more in order to be happy. That cycle becomes vicious. It is eternal; and you can't win. There is always more out there to be gotten.
Tisdale: If you get yourself on a treadmill of wanting more, you are never going to be happy; you can't want more and be happy. For example, I met people who claim to want a modest lifestyle in which they spend a lot of time with their loved ones, yet they are working 80 hours a week to keep up with a huge mortgage payment or a huge car payment. You have to figure out what is keeping you on that treadmill.
The most important financial goal you set is not numerical.
Kennedy: Plans don't get implemented because they don't reflect people's real goals. You have to start by asking yourself the right questions: What do you really want? What do you want your life to look like? Beginning the process with these questions allows you to create a plan that might not look like anybody else's on earth -- but you're motivated to carry it out because it works specifically for you. Rather than aiming for a number, aim for the life you want.
One of the exercises that I have people do is figure out how much money they make an hour and how much time -- based on their salary -- it takes them to make certain amounts of money. Be honest with yourself. Really look at where your time and money are going. If the bulk of your time is going toward making money to afford a mortgage or a car payment, is that really a true statement of who you are? Was it worth it to work five hours to buy that pair of shoes?
Tisdale: It's also about reinvesting your resources in terms of if what you want for your future. If what you want is to live in Rome when you retire, then why do you have a vacation house in the Hamptons that you hardly ever use? When you redirect your resources toward your most important goals then you won't have to be in that "chase returns" mentality. As one planner told me, all the time and money you want, you have all the time and money you need for everything you want; just not all the time and money you need for everything.
See "A Pile of Money Is Not Enough" for five ways to add more meaning to your financial plan and really make it personal.
More of Dayana's take on the mind-money connection:
Fool.com writer Dayana Yochim is an adult survivor of childhood and was lucky enough to have been raised by parents who were a positive influence on her adult financial ways.