In the News - January 2012
Financial baggage sinks attitudes as well as wallets
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Fast Facts
- Negative perceptions about money sink the ability to save and spend effectively
- Recognizing financial baggage is the first step to moving past it
LITTLE ROCK – Chances are good that most consumers learn how to manage money through their families or local culture. These influences can create financial baggage that, unrecognized, can hamstring consumers into making bad financial decisions, said Laura Connerly, instructor-family resource management for the University of Arkansas System Division of Agriculture.
“Once you understand the origins of your beliefs, you can unload any baggage that may have been holding you back,” she said.
Baggage, in this case, means any false beliefs that distort rational thinking and affect financial behavior. These often come from social conditioning via family, friends, cultures and marketing. Some of the following examples may sound familiar:
- “Net worth equals self-worth.”
- “Money is a tool for power and control.”
- “It’s normal to have a high amount of credit card debt.”
- “Buying expensive gifts proves you love someone.”
- “I’m not capable enough to build wealth because of who I am or a situation I’m in.”
Irrational beliefs like these get into the heads of consumers and convince them that money needs to be saved or spent in a certain way. Often, this perpetuates bad financial decisions.
Although not every influence is a negative or irrational one, it’s important for any consumer to look at his or her situation objectively to find any financial trouble spots, Connerly said.
“Recognize financial baggage, discard irrational beliefs and move forward towards building wealth,” she said. How? Look inward and look forward:
- Reflect on your childhood and life experiences regarding money. Are there thoughts or feelings about money that seem “off” or that you recognize as false or irrational? Think about why you adopted these negative or wrong financial behaviors.
- Convert each example of financial baggage into a positive financial message. Instead of thinking, “I’m not capable enough to build wealth,” say, “I will build wealth using proven financial management techniques.”
- Discuss these positive wealth messages with a friend. Sharing your newfound positive thoughts helps cement them into your personal finance philosophy.
“Overcoming false beliefs is an important strategy for behavior change, especially when it comes to handling your finances,” Connerly said.
Learn more tips for success with Small Steps to Health and Wealth, a national Cooperative Extension program. Enroll in the Small Steps Challenge, a free six-week financial management program, at www.arfamilies.org/arkansassaves. For more information on financial management, contact your county extension office or visit www.uaex.edu.
The Cooperative Extension Service is part of the University of Arkansas System Division of Agriculture and offers its programs to all eligible persons regardless of race, color, national origin, religion, gender, age, disability, marital or veteran status, or any other legally protected status, and is an Affirmative Action/Equal Opportunity Employer.
January 27, 2012
By Benjamin Waldrum
U of A System Division of Agriculture
Media Contact: Mary Hightower
Extension Communications Specialist
U of A Division of Agriculture
Cooperative Extension Service
(501) 671-2126
mhightower@uaex.edu
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