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Beliefs About Money Affect Your Spending Behavior

If you’ve ever taken a leadership course, you have most likely been told that your thoughts inevitably lead to your actions, or that your output is based on your input (garbage in garbage out is a popular phrase used). I always thought of these phrases in the sense of reading valuable books or watching a beneficial documentary on TV or even hanging out with the right crowd. Since I was taught this valuable lesson in a leadership setting, naturally I applied it to my growth in leadership. But, what if we take these same principles and apply them to our personal finances? It only makes sense that our experiences lead us to believe something, which in turn, leads us to take a certain action regarding our finances.
How have we developed our current financial beliefs? My initial thought is of my grandparents’ generation. Many of my friends have had the unfortunate occurrence of their grandparents passing, and they needed to go through their grandparents’ belongings. I can’t count how many times I have heard stories of cash being stashed everywhere in the house! They’ve found money in jars, books, under loose floorboards, in furniture, under mattresses, and many other places that I would have never guessed! Why did their grandparents do this? It was because of their experiences when they were younger. The Great Depression has scared them away from the banking system and influenced them to save save save.

Now how about my generation? We have not been influenced by the Great Depression and up until 2008, we have only seen prosperity and wealth. Money is an unlimited resource. So naturally, our actions are spend spend spend. Makes sense right?

I heard some recent figures from Bloomberg. If a sample of 100 Americans would be asked to come up with $1,000 in 24 hours, only 60 of them would be able to do so. 40% of Americans do not have $1,000 in liquid assets! This because money is believed to be an unlimited resource. We’ve always had it, therefore, we always will have it.

It is time to change our beliefs. America is in serious financial strain and many economists see nothing but a bleak future. For those of you that have been living paycheck to paycheck and have been spending without regard, please consider making a change. Read about Getting Out of Debt and Saving Money. You will be glad that you did.



My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

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