The Psychology of Money

The Psychology of Money

Money is commonly associated with the materialistic view of things, however, its importance is so great in human dynamics that it cannot be approached only from that area.


It is necessary to understand the mental processes that govern the relationship of people with money, the unconscious education that is imparted in this regard from an early age, the “limiting beliefs”, the conceptual and moral confusions, and so on. This is what the psychology of money addresses.

The internal game of money.

It is clear what money represents in terms of externalities (or the role it plays in the world): it allows all the transactions necessary to survive and sustain the socio-economic system of modern civilization.


But in terms of interiorities, that is, what happens in the mind of each person regarding money, the issue is not so easy to understand.


The perceptions of it, the ways of generating it, managing it, and disposing of it vary tremendously from one person to another. This is why it is necessary to build a psychology of money. To study in-depth an issue that determines the quality of life of all the people in this world

Money conflicts are not economic or business, they are psychological problems.

No monetary difficulty, be it having little money, spending a lot, hoarding it, accumulating it, keeping it, not knowing how to invest it, etc., is resolved by generating more “cash”. The solution is not in the source, the flow, or the use of money, the answer is in the mental processes that people activate on the subject.


It is a counter-intuitive matter. The problems are not outside, they are in the mind.

Any measure can be taken to address “externalities” but the root of the problem will remain. The patterns will continue.


For some time and in certain circumstances things can improve, but if the psychology of money has not taken part in the equation, the undesirable situations will return. It is the same that happens with dysfunctional relationships: the problem is presumed to be the people with whom one is related, but the problem fundamentally lies in decisions that have to be made internally.

Money is an emotional matter. It is not rational. It is not about numbers. It is a matter of beliefs, convictions, dispositions, and inclinations. Something akin to religion or politics. Very sensitive and personal issues.

Money is, obviously, one of the most important elements in people’s lives, and therefore a field on which you must work and develop knowledge until you achieve mastery. It is not for less. With money there is a basic, primary truth: either you dominate it or you dominate it.

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The personal origins of the psychology of money.

People’s relationship with money is conditioned by the relationship that the families that raised them had with it.


Beliefs and attitudes towards money are formed in childhood. They emerge in the unconsciousness of childhood and remain in the subconscious throughout life. With money, something unusual occurs in other fields of human knowledge: its understanding originates in the unconsciousness of an early age and lives in the subconscious for all of life.


Or at least until the moment that consciousness is incorporated and perception is transformed.

People behave with money in the same way as those who educated them, or in other cases, in the opposite way. It all depends on the experiences they have had. The reactions are pendular: they go from one extreme to the other.


The psychological aspects generally linked to money are fear, fear, or anxiety.

In some cases, compulsive spending behaviors are formed – emotional, and in others an urge to save it or accumulate it. Some people are very licentious to spending and others are “hyper-vigilant” or sensitive to any expense.


These behaviors are forged in early education, in the experiences of the family environment linked to the crib.


If there is no conscious process to evaluate intimate and personal psychology regarding money, all acts will always be conditioned by the education received in childhood and youth.


Now, if that education has been approached appropriately at home, the behaviors will be beneficial throughout life. But this reality corresponds to a minority. In general, there are misconceptions, to a greater or lesser extent, in all families.


The wrong values, concepts, interpretations, and beliefs about money, most of the time are dressed in good faith and healthy intentions.


This is the drama associated with education with money: in families, there is no unwillingness to teach what they teach, or lack of good faith to transmit the doctrine they consider correct. It is done with the best of intentions. This is why they are teachings and values ​​that are deeply rooted in people’s subconscious because they were taught with love and care.

Most of the mistakes families make when educating their children in money matters are based on “limiting beliefs.”

These beliefs easily blend into the range of good faith and healthy intentions. They are innocent ways of looking at reality, not only concerning money but also in political terms and social behavior.

Limiting beliefs in the psychology of money are, among others, the following:

  • The money issue is complex because “the economy is not doing well”
  • Corporations have all the power
  • I can’t make big money in my field
  • The competition is very big
  • There are many people on the planet. There is little opportunity. Everything is covered
  • I can’t start anything because I don’t have enough capital
  • My boss doesn’t appreciate me
  • It is the company where I work that prevents it
  • Money is very hard to make
  • Money is bad. Source of misery and corruption
  • It’s so expensive, I can never afford it
  • Everybody tries to cheat me, to cheat me
  • Business is unethical or “spiritual”

The vast majority of people (and families for that matter) share some variant of these limiting beliefs.


And they seldom visualize them according to their nature, because they do not seem transcendentally wrong beliefs. They are subtle misunderstandings. They disguise themselves as conservative criteria and preventive logic. “I’m cautious, is that wrong?”

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However, the conclusion reached is decisive: it is not easy to make money.

Consequences of limiting beliefs in the psychology of money.

  • Victimize. It is a logical consequence. “The person responsible for one’s inability to make money is someone else (s).”
  • Excuses Hundreds of them. All logical. Emerging from the solidity of one’s own limiting beliefs.
  • Procrastination. Postponement of essential decisions associated with money.
  • Materialism. Since the things and situations that can be solved with money do not occur, then “money solves everything.” It’s curious. Materialistic concepts emerge from emotional needs. From the desire to explain a money problem that is not solved. And even more curious is that materialistic people are mostly those who do NOT have enough money, not necessarily those who benefit from the capital.
  • Emotional voids. Dissatisfaction. Frustration with life and its needs.
  • The idea or temptation to earn money inappropriately. That is, positioning the wrong concept of “easy money” at the top of the value scale.
  • Bad investments.
  • Lack of long-term strategies.
  • Lack of discipline and good habits related to money.
  • Lack of knowledge and education on the subject. How does money work?
  • Avoid and ignore money.

The latter is a common consequence. And one of the most destructive. Because money is simply impossible to ignore, it is a very large domain of human endeavor, like it or not.

Healthy psychology of money.

How do you reverse the wrong psychology of money?

First and essentially becoming aware of it. Understanding that it exists and that it transcends every act of life. Recognizing that it is not its own construction and that for the same reason it does not deserve guilt or pain.


Assuming then that the responsibility of transforming that psychology is eminently personal.

The sound psychology of money is based on the following:

1. Discard materialism.

It will never be okay with just having money. This is one of the most notable manifestations of poverty. Money is a good, material possession of a fungible nature.


No matter how much effort is invested in trying to prove (or believe) the opposite, life will be responsible for confirming that money does not buy well-being in any way. The most important things in existence are not material, and for the same reason, they are far from being able to be acquired with money. Simply changing the psychology of money cannot be bought.


Money is like a warrior’s sword. Nothing is without the latter and his ability to wield it skillfully. It can help you win many battles if it is in trained hands, but it can cause great damage if it is not.

2. Do not build any ideology around money. This is completely neutral.

What ideology can develop around a table, a chair, a car, or a house? None.

The same thing happens with money.


It has specific functionality, and stops counting. It is an invention of man, like the wheel or the lever. It can “move” the world as a wheel does or as Archimedes intended if it was given a large enough lever. But can you justify an ideology?


Only the poor do philosophy with money. The scarce mystifies the abundance and the lacking exalts the fullness. Who treats money with the naturalness it deserves, and never places it very high on the scale of values.


This is not intended to relativize the importance of poverty, or the drama it represents. But within the framework of the conceptualizations that have been made, neither can an apology for it be made. Poverty has nothing good, and even less when it is the product of mental processes that can be changed.

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 3. Know all the “traps” that Society has built about money.

Consumerism, mortgages, credit cards, bad investments, emotional temptations, etc.

These “traps” are created to make money from people who know little about money. That’s the reality. And being a fact is not enough for moral judgment either. Because if it is not morally reprehensible who sells tobacco to those who wish to smoke, neither is it who sets the “traps” for the unwary.


The responsibility is personal. The “traps” disappear when ignorance about money does.

Having an abundance mentality. Money abounds. This is a technical statement. A factual argument.


Again. If money is effectively concentrated in a tiny proportion of the inhabitants of the earth, it is due to the ignorance of the rest. Many different arguments can be exercised, a kinder and politically correct approach can be favored. But things will not change because the “privileged proportion” changes its approach, they will only do so when the rest decide to exercise the right to form knowledge on the subject.

5. Take 100% responsibility for your own situation regarding money.

No excuses or blame anyone else. Taking full and conscious personal responsibility stops the process of victimization.


Money is one of those few things that demand subjugation. He is a powerful servant but can be a cruel master. And given the importance of this, it is unwise to leave the responsibility in the hands of others.


Nothing and no one is to blame for your money problems! Believing it leads to liberation, not doing so produces a little more of the same old stuff.

6. Strategic investments.

Especially in oneself and always with long-term criteria. Easy money does not exist. No proposal based on this is serious. It is just one more “trap”.


The long-term mindset is the most powerful formula to overcome the setbacks that money generates, especially when it comes to investments. And when the “strategic” criterion is added to this, a concept of government associated with the treatment of conflict, uncertainty, and competitiveness is added.


The healthy psychology of money is never aligned with haste or urgency, these are fuel for all financial mishaps. On the other hand, the long-term mindset should not be confused with procrastination or indecision. It is just the way to count on time in favor and not against.


The logic of investment is also closely associated with that of saving, and this is a fundamental element for the control of money.

7. That money is the product of the practice of your greatest passion.

The best way to make money, and to do it in abundance, is as a product of doing something that you are passionate about. That’s the statement that sums it all up because practicing something with passion guarantees quality, excellence, and distinction. It is well said that excellence is a consequence of love, and passion is the distinguished daughter of the latter.


Whoever does things with passion is a creator, and financial abundance is reserved for them. Ayn Rand, the Objectivist philosopher, classifies individuals between those who create and those who demand (“makers and takers”), and rightly affirms that the world has not only been built by the former, but it also belongs to them.


When you do things with passion, you subtly but firmly move from one category to the other.


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