My life has been expensive lately.
I’m very disciplined with my spending but sometimes life gets away from me. November has been one of those months when the big-ticket items just kept rolling in. I needed winter tires, I had an (out-of-pocket) root canal, I booked plane tickets to Costa Rica for me and my boys, and I booked a cottage through Air BnB for my 50th birthday next year. Oh, and my son needed a new winter coat.
When I was married and enjoyed the benefits that come with having two incomes, these extras didn’t phase me. It seemed that between the two of us there was usually enough money to pay the Visa bill each month.
Things are different now. I no longer a second salary to depend on for income. I own a home and a car, and I have two teenagers and that means stuff’s going to come up. Oh, I also have teeth - teeth are expensive to have too, I’ve learned.
Watching the balance on my Visa card go up mercilessly threatens to damage my sense of well-being. When I was in my 20s and living on my own working my first job, I was living on a knife’s edge financially. Any unusual expense threw me off kilter because I just barely earned enough to cover my regular spending. I felt helpless, anxious, and a little ashamed as I watched my line of credit balance creep up. Now in my late 40s, these feeling are lurking on the edges of my brain, ready to contaminate my story about money.
The other day I listened to an episode of Hidden Brain, a podcast about the unconscious patterns that drive our behaviour. The episode is called Change Your Story, Change Your Life and it talked about two kinds of narratives: redemption narratives and contamination narratives. A redemption narrative is a story that goes from negative to positive while a contamination narrative goes from positive to negative. These types of narratives are often applied to how we view our life stories.
As you can image, people who have a redemption narrative have overall better wellbeing than those with a contamination narrative. We choose which type of narrative we tell ourselves – about our lives and about our money. It helps when we take steps to move in a positive direction. With finances, that means spending some time learning basic financial facts and put some kind of plan in place – this can turn the narrative positive.
Here are two narratives about my recent massive Visa bill.
“This feels just like my 20s. These big expenses are making me feel bad about myself. I’ve over-spent and been reckless with my money. Now I have to use my savings and this means I’ve failed to live within my means.”
Or
“Big, unexpected expenses happen in life. When I was in my 20s, I hadn’t planned for them by being more careful with my spending and by setting aside some money in a savings account. Now I know that I have to expect these costs. So yes, I am dipping into my savings, but it’s ok – that what savings are for.”
It’s obvious which story is going to make me feel better about myself. The reason I can tell myself the redemption story is because I truly have become better at planning and I did set aside for future expenses. If I hadn’t consciously done that, I would probably be listening to my contamination story and feeling pretty crappy.
My point is this: our happiness and well-being should not be dented by worrying about money. Even though we might not always feel like we have enough and that we’ve saved enough, by doing some planning and knowing that we are doing the right things – mostly – we can tell ourselves the redemption story: “I used to be clueless and I wasn’t preparing for the unexpected but now I’m doing what I can.” This is empowering, hopeful and kind.
Clients who reach out to me often feel like they are managing their finances in a haphazard fashion. They aren’t sure if they are saving enough, using the right accounts and investing properly. This can easily lead to a contamination narrative about finances. “We don’t know what we’re doing and we just can’t figure it out.” Once we have an in-depth conversation about what they want to achieve, review their numbers in depth, and put together a plan, they feel more confident. Their story has gone from “We’re hopeless at this stuff” to “Hmmm, we’re actually doing pretty good!” And honestly, it doesn’t take much. We’re talking about figuring out a few simple things: how much you need to save, how to find the money to do that, and how you should be investing. These three things do a lot.
Almost anyone can turn their money contamination narrative to a redemption narrative with a little planning.