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What’s your money paradigm?

We all have a money paradigm, or a way that we view money and financial matters. For some of us it’s about being comfortable with money, and for others, it’s lack of money, or anything in between.

Our money paradigm determines our financial success in life. In other words, how we view money determines our capacity to be creative with it. If we feel comfortable with money, we don’t tend to worry about the lack of money, and therefore tend to see opportunities all around us. If, on the other hand, we have a lack money paradigm, we constantly worry about not having enough, we talk about how expensive everything is, and we feel dis-empowered or even ashamed to have conversations around money.

Our money paradigm is usually formed by our first experiences as a child or our consistent experiences throughout our lives. Our parents (or other people from our childhood with a perceived position of power), usually give us the starting point to our money paradigm. If your money paradigm is "I have to work hard to make ends meet", this may be the approach that people in your early life had around you. You just kind of absorbed it through osmosis and never questioned it. If you believe that you have to work hard to make ends meet, then you will probably never realize that there is an easier job out there somewhere that pays more. Because you are stuck viewing life through the eyes of working hard for money, you may completely miss an opportunity in front of you.

Our money paradigm usually falls into one of 3 categories: dependent, independent, and interdependent.

The dependent money paradigm makes you feel like you have no control over your income or spending. You feel like a victim of circumstances with very few choices. The dependent money paradigm often has a lot of shame associated with not being wealthier, not being better off financially, or not having a choice about a “crappy job”.

The independent money paradigm is exactly as it sounds: you feel not dependent on circumstances, and you know that no matter what happens in life, you will be ok, or you will make it work. The independent money paradigm feels more empowered than the dependent money paradigm, but it can still feel very lonely. With the independent money paradigm, you often feel like it’s you against the world, or at least that you are the only person you can trust about money.

The interdependent money paradigm is all about growing and sharing wealth with others. With the interdependent money paradigm, you can comfortably share finances and financial transactions with people that you trust and who trust you. Interdependence with matters of money means that you KNOW you are ok, but that you don’t have to protect yourself financially. Please note that poor boundaries and oversharing finances or financial matters with others is not an interdependent paradigm. It’s a dependent paradigm, because it’s based on lack of boundaries and doing whatever you can to be accepted by those around you.

Each of these money paradigms have something important to teach us. But before we get to that, let’s first take a quick money paradigm test. To discover your likely money paradigm, only pick one option. If you can't decide which is most accurate, think about how you were when you were 20 years old.

Take a note of your answers. Are you getting a lot of 1s or 2s or 3s? Later we will look at the top tip for transforming your money paradigm.

When I think about work, I believe that

  1. I am at the mercy of my boss' whims.

  2. I can always find a better job.

  3. If we all work together, we get better results.

When I think about getting paid, I believe that

  1. I have no power over my finances, what comes in goes out. I'm an emotional spender.

  2. If I have a budget and a financial system in place, I'll be fine.

  3. There are people out there who know how to maximize the money that's coming in. I want to find out who and where they are.

When I think about money and relationships, the first thing that comes to mind is:

  1. My partner/kids/parents spend a lot of my money and there's nothing that can be done about it.

  2. My money is mine, I decide all expenditures.

  3. I allocate a part of my income for myself and a part into nurturing my relationships, be it paying for our home or gifts for those who are important to me.

When I think about investments, mine are generally

  1. Investments that help keep everyone happy.

  2. Investments in areas that interest me and gives me a good return

  3. Determined by a higher vision of the unit I am investing in. It may be a company with high level of environmental awareness, a project that advances humanity or an investment in my relationships through commonly agreed upon goals.

With savings, I

  1. Have good intentions, but don't end up having any.

  2. I don't talk about my savings. I have some, and that's all you need to know.

  3. Put aside a percentage of my income. I prioritize savings over spending, but not over humanity.

Now, let’s look at your answers. Did you get mostly 1s, 2s or 3s? You probably already guessed that the #1 answers relate to the dependent money paradigm, the #2 answers to the independent money paradigm and the #3 answers to interdependent money paradigm. If you have a dependent money paradigm, then my message for you is this: please don’t beat yourself up for having this money paradigm. You didn’t create it. It was created for you, and it’s important that you understand that you can’t change something that you are not aware of. Now that you’re aware of your money paradigm, you can start becoming more independent. This may look like any one of the following, or anything in between:

  • Saving $1-10 every week before you spend on anything else, and then spend the extra money on something that is meaningful for YOU.

  • Creating a simple budget (with the $1-10 just for you) and following it as well as you can. When external forces demand your money (unless of course it’s a serious issue or an emergency), you learn to say no. This may be your kids asking for money for a movie ticket or your spouse complaining that they don’t have money in the hope that you will, yet again, buy the groceries so that they can go for a few drinks on Friday with their friends after work. Just say no. This is YOUR money, and YOU decide how it’s to be spent. Let others learn how to make their own money.

  • Tell your spouse that you want separate finances. This is only appropriate when you have the kind of relationship where you can ask for this or if your spouse is afflicting financial abuse on you by spending your money.

All in all, make sure that your growth in the financial area from dependency to independence is appropriate for your life situation.

If you have the independent money paradigm, then my message for you is this: You have done a great job establishing yourself as a financially solid person. All those budgets and plans have served you well. Well done. My next questions to you are:

  • Do you love your job or your primary source of income?

  • Is it making your heart sing? Do you get a sense of purpose from your job?

  • Is your job a joy to attend every day? Are you excited to go to work in the morning?

  • Is there something about your job you would like to change, such as shorter hours, more pay or better working conditions? Start looking for win-wins in your job. Instead of seeing yourself as an employee, start seeing yourself as an asset to your boss. Suggest something you would like, that will be a win for them as well. For example, many people nowadays work from home 1 day per week to save time on commuting. Let’s assume that you have a 2-hour commute to work. To save time, offer your boss an extra 30 minutes of work if you can work from home.

To move on from the independent money paradigm, you need to accept that it’s likely that you have been relating to money in a defensive way. It’s probable that you have not felt comfortable to share your money paradigm with others in the fear of revealing too much or that they will try to take advantage of your financial status. Here are some exercises for you to move from the defensive independent money paradigm to a more growth oriented interdependent money paradigm:

  • Start gentle conversations with people that you trust about your current income or spending. Ask their opinion about what they would do. Please know that you don’t have to make decisions based on their opinion.

  • Try something new with your money. Take a small amount and invest it in yourself: do some further education, buy a course or a book that will help with your current challenges or take a designated spa day for yourself. The investment in yourself should be something that actually helps you along on your journey. If you need to rest to give your brain a break, then a spa day is a great way to invest in yourself. Remember, any investment should pay dividends, so make sure that you choose your investment accordingly.

  • Hire a mentor. Only take this step if you are ready to step out of the shadows of defensive money paradigm into a interdependent paradigm. With a mentor, you will have a designated teammate who will proactively look for ways to help you succeed and teach you how to make your money work for you as opposed to you working for your money.

If you answered mostly #3, the interdependent money paradigm, then my message for you is this: Well done for being able to go both inward and outward with your wealth management. The challenge in this paradigm is to create deeper and deeper meaning for your life and to use your money and wealth as a tool to do just that. At this level of money paradigm, people generally have a healthy and stable financial status. They don’t splurge their money because there is nothing to prove (splurging is a dependent paradigm activity). It’s like life’s financial storms have passed, you have learned to sail through them and have arrived at a comfortable port where you pretty much get to choose how you want your life to look like from here. My challenge for growth for you at the interdependent money paradigm is to start giving more and more meaning to your life. Start working on the following:

  • Make sure that every activity in your life gives your life meaning. What are the activities that you are currently spending time on that don’t give you meaning in your life?

  • Is your job/career/vocation actually making your heart sing? If not, start exploring a job/career/vocation that will allow you to leave a legacy.

  • What is your legacy? Do you have a mission statement for YOUR life? Make sure to keep deepening your authentic character traits so that the roots of your legacy will take hold. If you are working on your mission statement, make sure to include both your vision beyond your life and the principles with which you will reach your vision.

It’s been great to spend this time with you today on your wealth paradigm. If you would like to learn more about this topic or you would like to get some mentoring along other like-minded people, consider joining our Everyday Money Mastery LIVE online course.

Photo by Alessandro Vallainc on Unsplash Editing thanks to Ursa Swensen

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