The very idea of change elicits a fair number of four-letter words—think FEAR, HATE and PAIN to name a few. We saw a large number of people vote for change in the last election, saying that the status quo was no longer acceptable. But when it comes to your money beliefs, behaviors and habits, change is definitely not on the menu.
In a recent discussion, a young millennial woman told me that she doesn’t invest or plan for the future. “It’s all about now! And besides, I don’t know what to do. Frankly, it’s easier to look at that nice balance and not worry about anything else.”
OK, she’s got me there. Looking at big, fat bank balances does engender a feeling of security for many people, and why not? But here’s the rub (and we’re talking long-term money here, not short-term): If you’re earning less than 1% on your bank balance and inflation is eroding your purchasing power by 3% AND you’re paying ordinary income tax on the interest, the formula doesn’t make for a favorable outcome.
In order to motivate change and make it something beyond theoretical, a compelling, understandable and personally meaningful argument must be presented, along with information, support and encouragement.
Continuing my conversation with this woman, I said, “According to your goals, you want to provide funding for future child care and education for your child or children. With the current rate of inflation in college costs, you will need to save considerably more at savings account rates than if you considered other options. But that would require a shift and more likely a trip into your discomfort zone.”
The reason we resist change is as simple as it is complex. We are uncomfortable making decisions in areas where we are unfamiliar (and let’s face it, most people are VERY unfamiliar with personal financial information) or which cause fear, or the messages we grew up hearing placed a negative impression on us.
For example, if you grew up hearing that Grandpa Joe lost his savings investing in the stock market; your attitude and belief would naturally be to avoid that which robbed Grandpa Joe of his security. There are millions of stories that might lead you to feel negatively about exploring beyond a passbook account. The stories are real, but there are a bunch of facts left out as to the reality of the story. Who knows? Maybe Grandpa Joe speculated in Whale Oil futures or was fleeced by an unscrupulous stockbroker (seems far-fetched, huh?) leaving these terrible outcomes and a belief that money is best kept under the mattress.
We change our socks, our snow tires, and the heads of our electric toothbrushes because it all makes sense and doesn’t threaten any ingrained message or belief that we’ve toted around as long as our memory exists. But when it comes to our fears of what we don’t know, mistrust of the message carrier and all the unknowns, the idea of change is monstrously daunting. I get it.
Here’s the thing: you only need to start with an open-minded attitude to consider and contemplate change. Envision an outcome that improves your life sufficiently, and the pain you feel over the change is muted. Having an attitude of a curious learner will serve you well as you dip your toe and your mind into territories that might bring great benefit and success with a new strategy or new level of understanding.
You might have everything to lose by resisting change when it can bring you more in alignment with your values. Consider replacing the words FEAR, PAIN and HATE with HOPE, GAIN and ABLE. After all, what’s a few good four-letter words between friends?