Why “Bad at Money” Is a Misconception

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When you add up all of the small and significant financial decisions you make in a given week, you’ll get a result that may either support or detract from your overall financial goals. But, according to financial therapist Lindsay Bryan-Podvin, whether you find yourself contributing more money to a savings plan one week or perhaps shelling out for daily lattes the next, the decision of how and when to use money is highly personal, ever-changing, and unrelated to any inherent quality of being “bad” or “good” at money.

On the latest edition of The Well+Good Podcast, Bryan-Podvin addresses the drawbacks of adopting this perspective with Ellevest co-founder and CEO Sallie Krawcheck and Clever Girl Finance founder and CEO Bola Sokunbi, CFEI.

This broad classification might actually work against your financial interests, creating a “stuck” mindset, which is analogous to a self-fulfilling prophesy, according to Sokunbi. “People I work with tend to classify themselves as ‘bad with money,’ saying things like ‘I’m an overspender,’ or ‘I have credit-card debt,’” she says, but those are both transient and changeable situations, not fundamental attributes.

In fact, presuming you have some sort of money defect can actually inhibit you from taking the next step—that is, figuring out your money triggers so you can make better financial decisions on a regular basis, according to Sokunbi.

Where does this irrational idea come from?

According to Sokunbi, delving into why you think you lack money abilities may lead you back to your family’s money beliefs and whether they’re driving your present spending or saving patterns.

This misconception, on the other hand, has deeper origins in the historical lack of useful or sufficient financial information addressed to persons who identify as women. “Women have been educated to handle money through an emphasis on the significance of saving and cutting coupons—how to find the best bargain on shoes, how to send your kid to camp for the least amount of money,” Bryan-Podvin explains. “However, they were not taught the advantages of investing, bargaining for a raise, or any of the other positive aspects of dealing with money.”

“When we have financial worry, we tend to fall into one of two states: perfectionism or procrastination, both of which make money management more difficult and overwhelming.” Lindsay Bryan-Podvin (Lindsay Bryan-Podvin)

As a result, managing money, particularly in terms of investing and saving for retirement, can cause needless stress, particularly among women. “When we’re dealing with financial worry, we tend to fall into one of two states: perfectionism or procrastination,” says Bryan-Podvin. “Both of these states make money management more difficult and scary.” As a result, you may develop the erroneous belief that you’re just not good at it.

bad at money

How to get rid of the false belief that you’re “terrible” with money:

Rather than putting money management on the back burner or putting it on a pedestal, the professionals insist on getting right into it. To be more specific, both Sokunbi and Krawcheck recommend investing (especially if you haven’t done so already) as the best method to grow your money and save for retirement.

According to Krawcheck, “research suggests that people who identify as guys would invest right through terms they don’t understand,” whereas women will not. “That creates a huge barrier because there’s just so much to lose every day if you don’t do it,” she says, referring to compound growth (that is, getting a return on your investment, then getting a return on that return, and so on).

While there is no intrinsic identification of your financial skill level, there are sentiments of being too busy or afraid, which are both valid. To that end, Krawcheck recommends picking an amount where you can say, “If I lost all of it, my life wouldn’t be that different,” whatever that value is for you: “Thinking about it in this way is really useful for simply putting a toe in the water.”

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