Add up all the little and big decisions you make about money during any given week, and you’ll end up with a result that may either support or detract from your overarching financial goals. But either way—whether you find yourself contributing more money to a savings plan in one week, or perhaps shelling out for daily lattés in another—the choice of how and when to use money is highly personal, ever-changing, and, in fact, unrelated to any inherent quality of being “bad” or “good” at money, according to financial therapist Lindsay Bryan-Podvin.
Experts in This Article
Bola Sokunbi is a certified financial education instructor and founder of Clever Girl Finance.
financial therapist and author of The Financial Anxiety Solution
Sallie Krawcheck is the CEO and co-founder of Ellevest, a financial company with the goal to get more money in the hands of women.
Alongside co-founder and CEO of Ellevest Sallie Krawcheck and founder and CEO of Clever Girl Finance Bola Sokunbi, CFEI, Bryan-Podvin discusses the downfalls of adopting this perspective on the latest episode of The Well+Good Podcast.
Listen to the full episode here:
This sweeping designation can actually work against your financial best interests, generating what Sokunbi calls a “stuck” mindset, which is similar to a self-fulfilling prophecy. “People I work with tend to categorize themselves as ‘bad at money,’ saying things like, ‘I’m an over-spender,’ or ‘I have credit-card debt,’” she says, but, of course, those are both reflective of temporary and changeable realities, not of character or any inherent traits.
And, in fact, assuming you have some money-related flaw can actively prevent you from taking that next step—which is to figure out your money triggers in order to take those daily financial decisions in a more helpful direction, says Sokunbi.
Where this negative belief comes from:
Delving into why you might assume you lack money skills may lead you back to your family’s perceptions around money, and whether those may be driving your current spending or saving habits, says Sokunbi.
However, this misperception also has broader roots in the historic lack of helpful or sufficient information about money directed toward people who identify as women. “Women have been socialized to manage money through an emphasis on the importance of saving and cutting coupons—how to get the best deal on shoes, how to send your kid to camp in the most economical way,” says Bryan-Podvin. “But they weren’t taught the benefits of investing, or of negotiating for a raise, or all the other positive things that fall on the opposite side of the coin when it comes to engaging with money.”
“When we’re dealing with financial anxiety, we tend to flip into one of two things—perfectionism or procrastination, both of which make money management harder and more daunting.” —Lindsay Bryan-Podvin
As a result, managing money in terms of investing and saving for retirement often stokes undue stress, particularly in those who identify as women. “When we’re dealing with that financial anxiety, we tend to flip into one of two things—perfectionism or procrastination, both of which make money management harder and more daunting,” says Bryan-Podvin. And, in turn, that can contribute to the flawed idea that you’re just not good at it.
How to drop the flawed notion that you’re “bad” at money:
Instead of putting off money-management or placing it on a pedestal, the experts insist on simply diving right into it. And to be specific, both Sokunbi and Krawcheck stress investing (particularly if you don’t do it now) as the best way to actively grow your money and prepare for retirement.
“Research shows that people who identify as men will invest right through jargon they don’t understand, while those who identify as women tend not to,” says Krawcheck. “That creates a real barrier because there’s just so much to lose each day that you don’t do it,” she says, referencing the power of compound growth (that is, getting a return on your investment, then getting a return on that return, and so on).
But while there’s no inherent designation of your skill level with money, there are certainly feelings of being too busy or too intimidated, both of which are valid. To that end, the simplest way to start investing (and abandon the unfounded idea that you’re bad at money) is to pick an amount where you can say, ‘If I were to lose all of it, my life wouldn’t be that different,’ says Krawcheck—whatever that value may be for you: “Thinking about it in this way is incredibly helpful for just dipping a toe in the water.”
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