7 stupid beliefs even the smartest people have about money

Before you go, we thought you'd like these...
Before you go close icon

Money Saving Apps


Certified life and executive coach Megan Walls has noticed a recurring weak spot among the otherwise intelligent, capable professionals she works with: money.

"For some reason or another, these clients aren't as mindful or deliberate as they'd like to be. Some are business owners, lawyers, or in education," Walls tells Business Insider.

When these clients started asking Walls to help them master their finances, she got right down to their core beliefs about money.

"A belief is a thought you think over and over again," she says. "And then that belief gets buried in your subconscious, and causes an emotion — anything from contentment to fear — which then causes you to take action and produce some sort of result. That's the chain: emotion, action, result."

If these core beliefs are self-sabotaging, you can imagine how that chain progresses.

Here, Walls shares some of the more damaging financial thought patterns she's observed in her practice, among the most impressive professionals.

"Money magically appears."

Walls remembers a client who inherited money while in grad school and thought he'd be set for years.

Instead, he ran out halfway through school — and later in life he ran out of funds again. After some discussion, they found that his core belief was that money magically appears.

"As a kid, whenever he needed money, he'd ask his dad, who would hold out a $10 or a $20 bill," Walls says.

"We had him replace that money thought with a new one, something to the effect of 'I am in control of my money and can make good financial decisions for me and my family,'" she says. "He started meeting with a financial adviser and using Quicken to track his spending."

"Credit-card debt is normal and acceptable."

The average American household owes over $7,000 on their credit cards, and among indebted households, it's an average of nearly $15,500. It's no wonder we think debt is a normal part of life.

Walls says that while consumers know they have to pay the credit-card companies back, there's a lack of fear or immediacy surrounding the debt. Especially among younger cardholders, she finds, the need for immediate gratification outweighs any reservations about spending money on the cards.

"Spending will make me feel better."

"I think what's surfacing is people operating with these beliefs about money are spending in unhealthy emotional states," muses Walls.

"They're saying, 'I'm going to go buy something to avoid feeling sorry for myself; I'm going to buy whatever I want,' when they don't really have the budget for it," she explains. "When the bill comes, they're absolutely panicked."

"There will never be enough money."

Another client came to Walls with about $12,000 in credit-card debt, worried that it was starting to impact other areas of her life.

"Growing up, her family would always say, 'We can't afford that, we're going to run out of money,'" Walls remembers, "and she started picking up on it and avoiding dealing with her finances. She came up with a new, positive, empowered belief: 'I am a successful professional living an abundant life.'"

"I would say that the lion's share of money beliefs come from family or society," Walls explains.

"I need to spend all my money, or it will be taken away."

One of Walls' clients was supporting her family members and felt that if she didn't spend the money she earned immediately, she would have to give it to them.

Unfortunately, "spending" didn't include any sustainable plan for the future, like saving for retirement or amassing an emergency fund.

"She was always thinking, 'someone will be asking for it when I come home,'" Walls remembers, "and she got into debt."

RELATED: Useful tips to teach your kid about saving money

9 PHOTOS
Tips to teach your kids to save money
See Gallery
Tips to teach your kids to save money

Play money-centered board games or games on apps, like Monopoly or Money Race.
It's an interactive and fun way for your kids to learn about basic financial practices without feeling like they're being lectured.

Photo credit: Shutterstock

Give them an allotted amount of cash to spend on lunch each week.
Your child will learn how to budget accordingly throughout the week, figuring out how to balance spending money on food some days vs bringing their own on other days (something that can be directly translated into the adult workplace).

Photo credit: Getty

Have them write down or tell you their absolute dream toy.
Then, show them that it's possible to have that toy if they save x enough money for x amount of weeks.

Photo credit: Getty

Give them an allowance.
 

Photo credit: Alamy

Stick to a set time and date each month for giving your child their allowance.
Practicing giving your children their allowance every other week or on certain dates of each month will help them prepare for set paydays in the working world--it will teach them to budget out and how to know when to save up in anticipation.

Photo credit: Getty

Match your child's savings each month.
This will imitate a 401K and show your child ways in which saving can (literally) pay off.

Photo credit: Shutterstock
 

Have your kid organize their funds in to different jars to represent different accounts.
Examples could be "Saving", "Spending", "Charity", "Emergency", "College".

Photo credit: Getty

Take your kids grocery shopping and explain certain choices you make with your purchases to them.
Your children will benefit from knowing what's best to purchase name brand vs. generic, why some snacks are better to buy in bulk, etc.

Photo credit: Getty
 

of
SEE ALL
BACK TO SLIDE
SHOW CAPTION +
HIDE CAPTION

"Men are better than women at handling money."

The problem with this belief is twofold: It encourages women to distance themselves from their finances (especially if they're in a relationship with a man who is willing to manage the money), and it puts the burden on men to be good with money, whether they are or not.

"A lot of women let their husbands take care of the bills and finances without paying attention themselves," observes Walls, which isn't necessarily the best strategy for many families.

"I'm an adult, so I should know how to manage money."

Many people, Walls says, don't know the basics of personal finance, like budgeting or tracking their finances. She found that one of her clients had a lot of shame and avoidance around money because, while she thought she should know how to manage it, she simply had never learned.

"I really think that's common," says Walls. "I tell a lot of people, 'You're an expert in your field — you're not an expert in money management.' There's this perception that as a grown man or woman, people should know how to do it. It's OK to admit you don't know how to create a budget — go get an expert who does."

More from Business Insider
After sleeping in a converted NYC taxi, I have a new respect for the young professionals living in vans to save money
What 17 successful people wish they'd known about money in their 20s
This woman quit her corporate job at 35 and saved $16,000 to travel the world 'indefinitely'

SEE ALSO: The 12 dumbest things you can do with your money in your 30s — and how to avoid them

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners