For many of us in the United States, this is a rough time of year economically. This year in particular, though, has been particularly tough financially here. The housing market, gas prices, the weak dollar – all we seem to hear is bad news about our economy. With so much of our focus on money, this feels like a good time to have a close look at how we develop the financial habits we have so that we can get through the tough times without a great deal of hardship.

The first seven years of your life are the most influential on your sense of safety, security, survival and wanting to belong. In the world we live in today, these feelings of safety and security are all linked to money. If you have money, you can buy all of your necessities – your food, shelter, water and so forth. You can buy your education, you can even buy security systems for your belongings. In short, money is the key to creating safety and security in the way that most suits your needs. Without money it is extremely hard to achieve any sense of safety or security since all of the basic necessities are commodities that come with a price tag on them.

Many people that have a tremendous amount of skill in their chosen career have an extremely hard time holding on to money because they are suffering from some developmental issue. When I say this, I mean that they are great at their career, but because of the way that they were raised, they find it difficult or even painful to think about and manage their money. You may find that you, yourself, are finding that you are challenged to manage your money as effectively as you could. I know that I’ve been challenged and learned a lot in my life and continue to do so. I also know that many of those challenges that I faced around money for the first 36 years of my life had a tremendous amount to do with my perceptions and beliefs about money that were formed during the first seven years of my life.

Programming Begins Early

Above, you can see pictures of two boys of roughly the same age. Their age and sex may just about exhaust all of their similarities though as they live in very dissimilar environments. What is important here is the way that they learn about the use of money in their culture. The boy on the right may live in a culture that operates mainly on a barter system, rather than relying on currency as the medium of exchange and this is a significant difference. It will certainly affect how he comes to view wealth.  The boy growing up in the bartering culture might gauge wealth in terms of material goods rather than by looking at your bank account. For the two boys, their culture and education will shape what they come to believe about the meaning of poverty and wealth. It will inform them about acceptable ways to reach wealth. It will also shape their values regarding wealth – whether having lots of it is of the ultimate importance or whether simply being comfortable while achieving the career of choice is more important.  However their environment changes them, the two boys are of the age at which they are most receptive to environmental inputs that will shape their views about money for the rest of their lives.

One way of viewing this claim is to say that your external environment creates your internal environment. That is, your experiences help to construct your values and beliefs. They form connections between your beliefs and emotions. Ultimately your experiences will create a psychological framework through which you view and react to the world.  That framework or worldview is your internal environment. So now, consider the worldviews held by the two boys.  The boy on the right might consider himself poor if he grew up in an environment with children that were exceedingly wealthy, where the boy on the left might consider himself very wealthy compared to the children at his school if his family were to have more possessions than other families. In the end, this might not only have an effect on their view of wealth, but their sense of self-worth and self-confidence.

Understanding your own developmental past is extremely important if you want to manage your finances in the best way possible. Your sense of safety and security are the foundation for all future development even if you are now 50 years old. So you should explore whether there are any experiences in your past that may have created a development issue influencing your ability to manage money today. The first place to look is at what your parents taught you about money, both directly and indirectly. Did they fight about money? Were they openly and vocally thrifty? Did they limit your participation in activities or sports that you enjoyed because of a lack of money? Did they drown you in money, but fail to provide you with real affection? This is just a short list of questions that you might think about, but you can see how different answers would certainly affect your perception of money and the role that it plays in your life.

Now while it is important to identify the difficulties that you are facing, it is also necessary to look at your successes. Have you corrected any of your issues? How did you correct them? For example, if you used to have a problem with binge spending, but you corrected that challenge, how did you break that habit? Did you realize that you were actually creating more pain than you could handle with your expenditures? Was your change brought about by the realization that you wanted to buy something lasting and substantial that required you to stop frivolous buying? The reason why it is so important to see how you succeeded is to find tools that can work for you in new situations. You may be able to adapt whatever method worked for you to your most recent difficulty.

You might find it helpful here to create a Mandala focused on your ability to manage money. Start by dividing a piece of paper into four quadrants. The vertical axis represents positive and negative experiences and the horizontal axis represents experiences initiated by you or by someone else. So the Northwest quadrant represents positive experiences in managing money that were initiated by you. The Northeast quadrant represents positive experiences in managing money caused by someone else. The Southeast quadrant represents negative experiences caused by someone else and the Southwest quadrant would capture those negative experiences caused by you.  Next you should draw a series of concentric circles emanating from the center of the center of your chart. You should draw one concentric circle for each seven-year period of your life.  So if you are 49 you should have seven circles. Finally, draw a symbol in the Mandala for each significant event in your life that shaped how you manage your money now. That symbol should be located in the quadrant that captures whether it was negative or positive and whether it was initiated by yourself or someone else. It should also be drawn in the circle that signifies the period of time in which the event occurred. So, if you had a negative experience with managing money that you caused yourself at the age of 21, then you would draw a symbol to represent that event in the third ring of the southwest quadrant of your Mandala. Either of these exercises will help those of you who tend to rely more on your right brain to actually see important patterns in your money management history.

What Environment Do You Live in?
So our psychology is heavily influenced by our experiences and those experiences shape how we view the world. One way of getting a fix on how our past has affected us and on the difficulties that we are now facing is to describe our current environment as it relates to our ability to build wealth. What are the Positive Influences on your environment with regard to money? In what ways do you influence your environment positively with regard to money? What are the Negative Influences on your environment with regard to money? In what ways to you influence your environment negatively with regard to money? I ask how you influence your environment because we tend to forget that we influence and are partially responsible for the creation of our own environment. You can and do influence the way that other people behave. This starts with your family and then moves outward through your friends, clients, co-workers and so forth.  In this way you create an environment for yourself.  Your attitude and beliefs towards money therefore can change the way that others treat their money. An employer that is careless with their money may foster the same attitude towards money in his employees. Your children might also develop the same attitude if they see you binge spending. Living in such an environment may mean that you don’t have a safety net in times of financial hardship. People may not view you as a reliable person to loan their money to and so forth. In this way you’ve created an environment that may make it even more difficult for you to manage money well. On the other hand, if you can create an empowering attitude towards money in your family, co-workers or employees by treating it with respect and managing it well. In the long run this will benefit your business and your financial success.

Remember that your environment will include external and internal factors.  This means that you need to identify your beliefs and attitudes towards money. What are your goals with regards to your salary, to your savings, towards debt and investment? How does money figure in to your legacy? Is it part of your legacy to be making a certain salary at a certain time? Or, do you have less exact goals financially? How do you feel about paying bills? Do you attend to them fastidiously? Do you pay them when you feel like or only when you receive threats in the mail? How do you feel about lending other people money, including your family and friends? Take a moment to write down your answers to these questions and let them sit for a day. Then go back and read your answers over. Do they feel accurate and true? It’s important not to lie to yourself here, since having an accurate picture is the only way that you will able to move forward to create an effective system of money management for yourself.

If you can work through the techniques I’ve offered here, I think you’ll find yourself well equipped to handle times of financial trouble. You have a firm understanding of how you handle your money, and your strategy to get through the tough times is a lot less likely to be hampered by bad financial habits.