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Our relationships with money go back a long way. As kids, we learn money lessons from the grown-ups in our lives.
Decades later, those lessons remain lodged in our psyche. We may not realize how those early money memories influence our everyday spending and saving habits, but they do.
For retirees, the challenge is adopting a healthy attitude about money. If you’ve spent your working years haunted by money fears — lamenting missed opportunities and fretting about running out of cash—you’re not necessarily well suited to enjoy financial peace of mind in retirement.
“Only you can determine if the choices you make are satisfying for you or not,” said Saundra Davis, a financial coach at Sage Financial Solutions based in Northern California.
Some older people adopt a “poverty mentality” that has little or no bearing on their actual net worth. They’re overly frugal and derive minimal joy from what money can buy.
“Liberation from that mind-set is a choice,” Davis said. “It’s recognizing that belief, identifying where it comes from and then choosing a different belief.”
If you’re not sure whether your money attitude works for or against you, some tools might help. The Klontz Money Scripts test provides a window into your money beliefs. And there’s a card game, Money Habitudes, which spotlights your money personality.
To persuade clients to rethink their attitude about money, Davis connects their stated priorities and values to their spending decisions. She also probes to uncover their desired legacy—the money lessons they want to pass down to the next generation.
“If what the client says is incongruent with what choices they make with money, then either they’re not being truthful about what they say or they’re not having their money do what they say they want it to do,” she said.
While a financial professional can help expose your counterproductive money behaviors, the real test is how you respond to self-limiting money attitudes.
Davis encourages clients to keep a journal that plumbs their money history. She may instruct them to write their “money story” in five-year blocks, starting with the first financial decision they made.
“Maybe it’s buying their first car and remembering how the dealer checked their credit score,” Davis said. “Through journaling, you see what stands out. What are the stressful stories, the prideful stories, the shameful stories?”
As you get older, you may realize that some entrenched money beliefs hold you back. For example, you may have scrimped and saved for so long that you’re unable to spend lavishly on occasion, even if you can clearly afford it.
Davis suggests asking yourself, “Do I want to hold on to this belief for the next 10 or 20 years?” and “Do I want my grandchildren to think the same way I do about money?”
If you conclude that you’re dissatisfied with your money mentality—and you want to make a positive change—start slowly. After all, you’re embarking on a life hack that upends decades of embedded belief.
“It’s important to learn new skills,” said Travis Sholin, a certified financial planner in Omaha, Neb. For instance, identify what you’re passionate about when it comes to spending money. What would bring you supreme joy?
From taking your grandkids on a trip or buying artwork that moves you, proceed in incremental stages. You don’t need to shell out a big wad of cash all at once.
“You want to practice spending money,” Sholin said. “It’s often better to take baby steps” so that you get increasingly comfortable feeding your passion with modest purchases.
Helping someone overcome an addiction to extreme frugality isn’t easy. Financial planners sometimes cite anecdotes to sway stubborn seniors.
Nicholas Bunio, a certified financial planner in Berwyn, Pa., tells the story of a maintenance worker who refused to fund his daughter’s education.
“She inherited his deep poverty mentality,” Bunio said. “She didn’t go to college and became a hairdresser. In her 40s, he died and she learned he had saved millions of dollars” that she could’ve used for tuition.
Ideally, clients take Bunio’s message to heart and redefine their relationship with money. They abandon their belief that resources will remain scarce forever and pry open their mind—and wallet—to savor a newfound sense of satisfaction that even relatively small expenditures can bring.
