Featured, Financial Psychology

Prerequisites to Being Good With Money

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I’ve been writing about personal finance for a few months now, and frequently as I’m writing a piece like Reasons to Budget With Mint or This Story Will Make You Save For Retirement, I’ll wonder, what kind of place do you need to be in to take my advice or to see value in it? Over and over, I keep coming back to the only two prerequisites that must occur in the mind before any action is ever taken:

  1. You have to have a desire to be good with money.
  2. You have to believe you can be good with money.

That’s pretty much it! Well, that’s actually the recipe for being good at anything. Yet they’re the 2 toughest things that never really get emphasized enough. I can write about how to budget and save all day long and hope something sticks, but without those 2 things, nothing is ever going to happen.

It’s the same for anything really so maybe the recipe is just too obvious, but why don’t we ever seem to talk about it? There’s so much complexity in these 2 simple things, so I’m going to try and break down all the things I think are involved in the 2.

A Desire To Be Good With Money

There Are Some Things We Can’t Be Bad At

While money management seems like the type of thing we choose to do, it falls into the same category as getting a job–it’s something that’s sort of optional but not really. We may graduate and get our first job and absolutely hate it, but deep down, we understand the merit of having a job.

For some of us, a job is just a necessary evil. For some of us, a job is our passion. But whichever camp you fall into, there’s a general understanding of the stability a job brings to your life.

Depending on how much you actually enjoy managing your money, being good or even just ok with money is the same thing. It’s going to make your life a lot harder if you don’t manage your money at all.

If a job provides security and stability by bringing in money to avoid being in debt while paying for life’s necessities, money management is the natural complement to that. Why are we ok with being in debt if we’re earning a paycheck as opposed to being in debt if we’re unemployed? At the end of the day, debt is debt regardless of whether you have the false security of a job cutting you a paycheck.

Desire Doesn’t Have to Equal Passion

Money is kind of a boring topic, so you don’t have to be on personal finance blogger level of wanting to be good with money. Of course it would help, but it’s actually not a prereq! Like I alluded to above, not all of us are passionate about our jobs. I like my job, but even finding a job I like took a lot of time. I didn’t find it an acceptable excuse to quit working all together because I didn’t like my first job.

Money management is similar. It takes a while to find something that works for you with minimal disruption if you dislike doing it. It’s in your best interest to want to level up your money management skills if you lack them because it’ll help with planning for short and long term stability.

Wanting to Be Good Keeps An Open Mind

Wanting to be good at something will keep our ears perked to topics that may relate to it. Even if it’s not your top priority to be good with money, there may be more general awareness of blog posts that come up on the topic. Even by just keeping our mind open to the idea of improving will make us more receptive and likely to take action on something we see or encounter on the topic.

I was talking to a friend a couple months ago about credit card debt and how dangerous interest can affect the final balance you pay. They responded with something like “Oh yeah, I remember reading about credit card interest once, but I honestly just still can’t remember how it works exactly.” And internally, I was thinking…how is that possible…you’re good at math! But they didn’t really care about money management so of course it’s not knowledge that’d stick.

A Belief You Can Be Good With Money

“I Can’t”/”I’m Not”/”I’ll Never” Is The Death of Belief

I do this all the time. I’ll say things like “I’m not a runner”, or “I’ll never be good at stand up comedy”, or “I’m not a scientific thinker”, etc. on the basis that my past self wasn’t particularly good at these things when I tried them. What’s worse actually is that for some things, I just assumed I would be bad at them.

Which, by the way, I “just know” or I can “just tell” are the strangest phrases ever. On their own they don’t even mean much. The kicker is they’re usually followed with an implied “I can just tell I’d be bad at stand up comedy so…I’m not going to try and be good at it”, or “I just know I’m not a runner because of my weak ankles, so what’s the point of even trying to be a runner?” (I’ve been using this excuse forever!) Of course there are things we’re naturally inclined towards, but that doesn’t mean it’s impossible to be better or good at anything we’re currently terrible at.

Sometimes it’s just easier to say those things to get other people to back off because we don’t really believe we’re incapable of being good at something, what we’re actually saying is “I don’t want to put in all the effort it’ll take to be good at that right now.” Which is fine for most things! What we’re saying is that we don’t value it enough to commit to getting better at it. There are many things that are good for us and we really don’t have to commit to being good at all of them.

But other times, we actually do believe we can’t be good at something, EVER, for whatever reason. This isn’t an issue of not wanting to commit to getting better at something in a particular moment, it’s actually a fixed mindset. To move forward with being good with finances, we have to debunk the fixed mindset with reason. How do we debunk a fixed mindset about money (or anything?), well that needs its own post!

Belief Aids Beginning

It’s pretty hard to start building any habit or skill, and if we don’t think we can do it, then we probably won’t ever start. Most times, starting something is already an overwhelming task.

We don’t necessarily know the right way to start developing a skill or what might be the best things to practice if we want to. We don’t know which resources are the best entry point. Sometimes we know the timeframe for seeing results will be really long, etc.

Those are all things I’m constantly thinking when I think about starting something and wondering whether it’s worth it. Take this blog, for example! I had set up WordPress multiple times in the past so that was a start, but I had no idea how to find readers, how to improve my writing, what to write about…

Even though those things were really overwhelming initially, I could still start addressing them because I believed I could find readers even if it took a while. I believed I could improve my writing if I just kept writing and sucking sometimes. If I believe I can do it, then I don’t self sabotage my efforts to begin by getting too overwhelmed by the details.

Belief Aids Recovery From Failure

No one gets things right the first time they do it. The last time I remember learning something without totally getting something wrong was probably when I was learning basic math in grade school. And even then, the magic about learning something when you’re a kid is not beating yourself up over failing over and over.

Sometimes we feel that failure is an indicator that it wasn’t meant to be. It makes us highly aware of our desire to be good at something and the fact that we aren’t. But if we already believe that we can be good with money, we can move past failure more quickly.

Maybe I want to learn how to budget, but I miss my budget goals for the month. If you already have the nagging sense that maybe you can never actually manage to stay within your budget, then you’ll just immediately give up. If you already believe you can stay within your budget, you might go and seek out a different technique or try to edit your budget to be more realistic until you succeed.

Was there anything you never started because you didn’t believe you could? Tell me about it in the comments!

Jing is currently a software engineer based in Oakland, CA. She left her job in New York, moved to San Francisco unemployed, and more than doubled her salary in 4 months.

7 thoughts on “Prerequisites to Being Good With Money

  1. There’s almost nothing I don’t think I can do if I put my mind to it…except cooking. Here are the blockers for me:
    -It takes me too long to prep and do stuff.
    -There are always a million ingredients to buy to make stuff, which is not cost-efficient for me.
    -I hate how you make a beautiful meal and then it disappears in your stomach. I was reading about how food has the worst ROI.

    I am a creative person but all of the above things make me feel like I’m not creative enough to be a good cook. I tell myself, “I’ll never be one of those ppl who can just whip something up from random pantry ingredients.”

    I think with money it seems really complicated and time-consuming to be good at it. If we show people that doesn’t have to be that way then maybe more people will take action.

    1. That’s so good you have that mindset! I feel like I’m just now starting to approach things with a “Well, why the hell can’t I?” attitude. Cooking is definitely a tough one to master! I mostly let my boyfriend do all the heavy lifting in the kitchen these days, but back when I used to cook, I found these things helped:
      -Prepping totally sucks, but what would get me was the mess and disorganization, so I started reusing a produce bag/mushroom packaging to hold all trash food scraps. I would use a single plate and put all chopped veggies on the plate. I always prepped meat last so it didn’t “contaminate” anything else.

      -I’m kind of lazy and either leave out a lot of the fresh ingredients if I know I won’t be using the leftovers in another recipe or I get the dried version. The trick with spices/dried herbs I found is going to Whole Foods and getting the tiniest amount from the bulk spices section. It makes investing up front in spices so cheap and easy! Sometimes if it’s light enough, they don’t even charge you!

      Whipping up something does seem impossible with how much practice I’ve given cooking, but totally not out of reach! I feel like my mom is great at whipping things up because she has a collection of recipes she’s practiced for years and years. I think it’s the same with finances…people probably wonder how we know so much about all these different types of accounts and credit card secrets, but it’s really just because I’ve been adding to my knowledge base for years now!

      1. The biggest gamechanger for me re: cooking has been ENJOYING the prep part of it, and sorting my chopped-up ingredients into bowls so that they’re ready to throw into the pan/pot/whatever when it’s cooking time. Or into some kind of food scraps bag or container.

        Also, I don’t have a dishwasher, so having someone around to dry the dishes while I wash them cuts the time in 1/4.

        I agree with Luxe about cooking having a pretty terrible ROI, but if you think of it as art, then it’s kind of fun to be able to master dishes here and there! I can basically make 4 or 5 dishes that are pretty cheap to make, namely pressure cooker congee, zha jiang mian, beef or pork larb, lentils (can be made in bulk and eaten cold with olive oil, salt, and red wine vinegar). And the old frugal standby, tomato and egg with rice!!!!!

  2. This post gave me happy feels. I got a nice flashback of me struggling with a math equation in 9th grade. The new teacher came over and asked me what I think the answer was. I muttered it quietly thinking I was wrong and she noted my lack of confidence, grabbed me like the shoulders and said “yes that’s right! You know more than you think, you just need to speak up and believe you can do it!”

    I was too mousey at the time but I’m pretty sure I went…”what the heck was that…I know things? She’s crazy…”

    Hahah, she was a phenomenal math teacher, wish the SF school system had enough money to keep her longer.

    1. It’s so hard now being out of school and not always having mentors for everything we’re working on just telling us “Yes you can!” I wish I was still in grade school where I could get that type of encouragement! Now it’s all up to me telling myself I can do it…IT’S SO HARD!

  3. Snowboarding is the one activity that I really suck at. I did go snowboarding a couple times but could not get the hang of staying on course, going at the wrong angles and falling constantly. I did take a class my first time up but for some reason I cannot get the hang of it. After my second time ‘boarding I didn’t want to go back again.
    I might want to go back again because I may have rushed into it before and just wanted to go out to the slopes and snowboard. Have to be more patience in getting it down.
    This is a great comparison in handling money. If you have your snowboard(money) but don’t know how to do it you will be out of control and keep falling(debt). But if you take the time to learn to control yourself on the ‘board and practice you can be pretty decent at it(saving and investing)

    1. I just went snowboarding for the first time this February! I was terrible at it, and by the second day my tailbone was so bruised. I think I would’ve had an easier time believing I could be awesome at it if I had a butt pad and knee pads!

      I think another thing that’s pretty important is keeping expectations low when you’re just starting out. The issue is expecting yourself to be an amazing snowboarder or saver, etc without doing that much! I definitely thought I was going to be the exception when learning to snowboard and just magically pick it up the first day. And when that didn’t happen I just wanted to quit!

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