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Money Mindset Expert: The Habits That Keep You Struggling

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Are bad choices with money driven by our behavior or by our mindset?

And which do we work on to fix our problems?

And how do we start doing the things that we know we should, like charging fair prices for our work, saving and investing more, breaking bad spending habits, and beginning to feel financially safe and secure, even if we haven't hit some magical number, which somehow that goalpost for it keeps on moving down the road. And vitally, how do we manage money with our partner if they have very different habits around money from ourselves?

Catherine Morgan is both a good friend of mine and an expert at all of this. And I'm so excited for you to meet her. Enjoy.

All right, Catherine, you became a millionaire by 40, but in your 20s, you were massively overspending and were in debt. Can you tell me about what changed from one point to the other?

Such a good question.

It's been such a journey. The relationship that we have with money is really a mirror reflection of the relationship that we have with ourselves. And I think the biggest thing that's changed is me.

Like when we're trying to go from a place of financial instability and insecurity, which is where I was in my 20s, to the place I am now, I actually think it's far less about the practical knowledge and information and more about how I've shifted, how I feel about myself.

Let me tell you a little bit about what I mean by that because when I was in my 20s, I was a qualified financial advisor. I would give financial advice day in, day out to clients about what to do with money, where to invest it, how to save tax, all of those things. And I wasn't doing any of it myself, or I was, but then I would unpick it all and I would just spend it all. I'd invest it and then I'd pull it all out and then I'd spend it. So you can imagine as a financial advisor, the shame that I felt of knowing all of what to do with money and not doing any of it. (laughs) And that was because my relationship with money, how I felt about having money, was really not a positive one.

And when I reflect back on that, knowing what I know now, it was because what I realized is that I couldn't have love and money.

And so if I had money, it meant that I couldn't be loved at the same time. So every time I'd have it, I would just get rid of it. Because my experience based on my perception of money was that rich people were greedy, that money was used to manipulate people, money was used to buy people's love. And I didn't wanna be that person. I didn't want people to think that that's who I was. And so my instant reaction was money came in and I just wanted to get rid of it.

Now it wasn't a conscious thing, it was an unconscious belief about myself and about how I felt about money specifically. And it was a combination of many different things. It was a combination of things that I'd learned from my mom and from my dad and from society about how acceptable it was for women to be wealthy. You know, when I was growing up, it was the men who bought in the money into the household. It was men who were investing.

And even growing up in my teenage years, all the magazines that I read were talking about, you know, scrimping and saving your pennies and not overspending on credit cards. And there were never conversations about investing or growing wealth or wealth accumulation. That was all in the mail magazines. It was never in the magazines that I was reading and exposed to as a young girl.

And so I really believe that when I look back on my relationship with money, there was one particular day that changed everything for me. And it was the day that my second son was five weeks old. It was the 1st of October, 2013.

And on that particular day, I had my friend coming over to see me with her little one, and we were doing these like baby hand casting sessions where you put the baby's hand in clay.

And when my friend arrived that morning, we'd had a particularly disturbed morning with Thomas, my youngest. My eldest went off to nursery, and Thomas was at home with me, and he didn't want to feed, he didn't want to sleep. Like he just was really not himself.

And as the day progressed, Thomas's condition just started to deteriorate.

He obviously was unwell.

And I remember it was about 11 o'clock, and I walked over to the bay window in my lounge, and there was a Moses basket in the bay window. And as I walked over to the Moses basket, Thomas was wide awake, and he was lying really still with his eyes wide open, just looking up. And he was just blinking like he was in so much pain, like he had a headache or something.

And I remember telling my friend, and I said, I don't think he's very well. Like I think I'm just going to take him down to the hospital.

She left, and then I rang my husband and I said, I'm taking Thomas straight down to A&E. Like I'm not taking any chances. And literally within 20 minutes of arriving in A&E, his skin started to mottle. The doctors put him in my arms, in a wheelchair and took him straight down into resuscitation.

And all these doctors were swarming around the bed. There's about 15 doctors.

And this one doctor kept saying the word sepsis.

And I just remember thinking, what the hell is sepsis? Like I think I know what it is, but I don't really know. Later frantically Googling it. And it was literally on that day, Thomas was admitted.

He was treated immediately. And three days later we found out he had bacterial meningitis, which is like the worst form of meningitis.

And it was in that moment when I was in the hospital and the doctors were using words I didn't understand. I was like, what does this jargon mean? Like I'm a mum, I should know what the symptoms of sepsis are. Cold hands, cold feet, not sleeping, not feeding.

And in that moment, I just realized that the way that I reacted in those situations was from a place of safety. And when I went back to work 12 months later, I was sitting in the bank, and I remember thinking, this is how people must feel about money.

Must feel like I felt in a place of vulnerability of not having the education around septicemia, which is the biggest killer of newborn babies. I didn't know that. I felt so shamed. I felt not good enough as a mum. And even though we got him into hospital so quickly and he's now a very healthy, happy 10-year-old boy,

I felt shamed.

And I remember sitting in the office at the bank thinking people must feel like this about money. We don't learn about money in school. And actually our relationship with money is therefore just formed based on our very early perceptions that we've experienced.

And it was like a light bulb moment had gone off. And I was like, this is why I knew all of the practical things about money and never followed it myself because I didn't feel deserving to have that money because of the jargon, I didn't understand it.

And also because I felt this innate sense of lack of self-worth where I really believed that money wasn't meant for people like me.

Money was meant for rich, greedy people who didn't do very nice things with money because that was my experience. And that was what I grew up with, even down to some of the films that I watched growing up, you know, Wolf Street and The Devil Wears Prada, where women are perceived to be mean and greedy and horrible people when it comes to money.

And I didn't realize that in the hands of women, money does great things. We do great things when we have money.

And I really believe for me, that was a key moment in my life where I actually began to realize that the amount of money I have in my bank account is not a representation of who I am as a person. It's about disconnecting my sense of self, my identity to money. We see this in where people might say, 'Right, I'm gonna hit this financial goal, then everything's gonna be fine.'

And actually the reason we do that is because what we're actually really saying is I want to feel safe in my life.

I want to feel more in control of my life when I have this amount of money in my bank account. And normally it's related, but the amount of money in the bank account is normally related to quite a significant event. It might be the amount of money that your parents had before they got divorced. It might be the amount of money that is your financial freedom number so that you know if anything should happen in my relationship, I'll be okay. Because you want that sense of independence.

So I really believe that if anyone's listening to this and thinking like, 'I want to have a better financial situation,' it's not just the practical knowledge that's gonna support that growth. It really is understanding the meaning and the perception to what you directly give to having more money.

Tell me about the downside of that thought of when I hit this, then I will X and what people should actually do instead of just trying to hit X.

Yeah, the concept around like, when this happens, then this happens. It's really interesting that you say that because what we're doing in that statement, like when I hit this financial goal, then I'll feel better, you know? Then I'll be able to move house or then I'll be able to have children or then I'll be able to hire someone in my team.

What we're doing is we're parking our desires into the future.

When this happens, then I can do this. And actually there's a lot of really interesting thoughts and research on the power of now, like the power of creating that feeling right now rather than parking it into the future.

Because really what we're doing is we're saying, I'm not worthy of it right now, but I will be in six months' time or 12 months' time. And we give away our power to a financial milestone that we're placing into the future. And actually, if you were to think about what's the purpose of that and what's the emotion connected to it.

So let's say, for example, when I hit 250 grand and I'm gonna go to my bank account, then I'll be able to have kids. Cause then I'll feel safe. I'll feel secure.

The question there I would invite is how can you create that safety right now?

What other ways could you create that feeling of safety in the body? Cause that's where it all sits. It's not in the mind. It's not a practical thing you need to go do.

How do we create that in the body? So first of all, you could actually tune into where do I feel that feeling of insecurity?

You can do it quite practically. You can close down your eyes. Think about that insecurity, that instability.

Where do you feel it?

That it might be in the throat. I can feel like rocks in my throat. You might feel it like a breathlessness in the chest. It might be in the lungs. I can't breathe properly. It might be in the stomach.

And all of these different areas in the body lead to a previous time when you felt that same emotion. So if I was working with a client, I'd be asking them that question. Like where do you feel that in the body? And then I will be drawing that back to when was the first time you felt that feeling?

And it's a really unconscious thing. It's not like you can just go, oh yeah, I remember when I was seven, I was in this place.

It's actually just tuning into the energy that you store in your body. And when did you first experience that? And it's very often early child years. And it can be the smallest of things. It doesn't have to be this massive rate of trauma that happened, although in many occasions it can be. It could just be, for example, that you put your hand up in class and your teacher said, 'Put your hand down, let someone else speak.'

And so the connection there is, it's not safe for me to voice what I wanna share. It's not safe for me to be heard. It's not safe for me to speak my truth. And therefore we go and find evidence to support that belief that then keeps us stuck in those self-sabotaging patterns. And then we relate it directly to money.

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Yeah, that makes sense. You talked about one of the thoughts that you had was that having money is greedy. How exactly, like, tell me, work me through, walk me through what you did to change that belief.

Yeah, great question.

A lot of my beliefs around money came from very early perceptions and experiences.

And this sounds like a little bit weird to share, but I'll share it anyway in the hope that this will help somebody.

But actually the very first time that I started to explore my relationship with money, the story that kept coming up was one where my dad used to take us to the bank and we would have these little passbooks and every week he put money into the account and he'd take us down into the high street and we'd hand our little book over to the cashier and she'd, like, update the balance. And I even remember the sound of the printer as it, like, printed the money on the book.

And I remember one day going into town with my passbook and I handed it over to the cashier. My dad was in a shop next door.

And when she handed it back to me, the balance was zero. And I was like, I think it was like £3,000 in it before that. And I was like, where's this money gone? Like, where's it gone? And I was so afraid and so frightened. I was like, oh God, what have I done? What have I done? And I never said a word to my dad about it, to anybody about it. I think I just hid my little passbook away. I've still got it actually. And years later, I remember saying to my mom when I was going through my old memory books and my storage boxes, and I was like, oh God, like, I've completely forgotten about this money book.

And I said to my mom, I was like, I had no idea where that money's gone.

And the story that I was told, whether this is true or not, I don't know, but the story I was told was that my dad took the money out because he was leaving my mom and he needed money. Like, he left the house. He had nothing.

And that was the story I was told, is that he drew that money out. But the feeling that I had at the time was like, I'm not worthy of managing money. I can't manage money. I'm not a good caretaker of money. I can't even look after money that somebody else has given me. And that for me was a really interesting story to unpick because it then linked to, ah, so it's not safe for women to have money. And therefore only men can be wealthy.

And when I think about some of the movies that I watched growing up, like it definitely reaffirmed to me that rich people were greedy.

That Mary Poppins was one of my favorite films growing up. And the story there was the rich greedy bankers who would steal people's money and close off the banks and people couldn't get access to their money.

And it all kind of started to link together for me that connected me into, oh God, so maybe that's why I'm not holding money. I just think that when people do have it, they don't do very good things with it. They take it away from their kids. They're frivolous with it. They use it to manipulate people. Money was very much used as a way to manipulate.

When it came to my parents' divorce, for example, money was used as a weapon to create awkward conversations about, well, I'm not gonna give you the maintenance this month if you're gonna do this.

It was very much used in a negative way. And all of that that was going on around me, as a child, you pick up so much, you're like a sponge. You pick up all these stories, all these beliefs that are often just inherited from parents and from grandparents and grandparents, grandparents.

So that was how I unpicked it, is I just really started to connect the dots and connect where was the original story that created this belief or perception that I couldn't be trusted with money or that, yeah, money was greedy.

And once you had delved into the story, found where the story came from, that's when you could realize, I actually don't identify with that story, is that right?

Yeah, I think it's, the fact that it's in your unconscious is that it's not gonna be a case of like, you just wake up the next day and all of a sudden money is great and money is good and money is in flow and abundance.

But it is the journey.

And I think once you've got that awareness of your stories and then you can do the bodywork so you can really understand, where do I feel that in my body? Where is it that I feel that sense of shame? For me, it was my throat. And not surprisingly, I had my tonsils removed as a young girl because that's where I stored all of my pain, my shame, my emotion. And I didn't feel like I was able to express or vocalize how I felt. And so I would just keep it contained.

And when I understood where I felt it in my body and I was able to use somatic exercises to release that from my voice, then actually that enabled me to speak my truth. It enabled me to be more of who I am. It enabled me to recreate a new story. And actually when you create a new story with yourself, then you can go and look for evidence to support that new belief. And if the evidence to support the new belief outweighs the old belief, then over time, that's when you can start to shift your unconscious relationship with money.

Yes, that makes sense. There's different ways different people have these different stories around money. Some people overspend, some people oversave, some people are super planners, some people are the very opposite. And so oftentimes those different people need different advice on what they should be doing exactly with their money. Can you talk to me about the research that you did and what that resulted in?

Yeah, great question. So over the last five years, we conducted some research in our communities about people's relationship with money. And it was largely formed around what we call cognitive dissonance, which is like the field of money psychology. And we were really interested in, why are people behaving like this?

And even know people know how to budget or know they should be spending less than they earn. Why is it that people are overgiving or overspending or oversaving, hoarding money?

So we did a bunch of research and we came up with five money archetypes, which we call money story types. And just to give you like a brief synopsis of them, we have the architects, the impulsive, the pacifist, the enabler and the innovator. And just tell you a little bit about each of those.

The architect is the natural planner.

Those are people who have all the spreadsheets, they have the budget planners all completed, they know where money's going. And that's great for so many people. And there's a lot of people who don't manage money well. But the downside of the architect is that they can't take risks. They often stay in learning mode and they don't take action because the action feels unsafe or it feels risky or it feels hard.

So as the opposite to the architect, you've got the impulsive. The impulsive always takes action.

In fact, too much action sometimes, that might be that they're saying yes to too many things, they are great at taking risks, great at spending money.

And that also is the opposite of the enabler. The enabler is someone who can spend money but not on themselves.

So they find it really easy to be the caretaker and the giver to other people, but not when it comes to their relationship with self. So the enabler is someone who often people pleases, undercharges, overgives, overdelivers, and can't spend money on themselves.

We then have the pacifist.

The pacifist is often somebody who doesn't like to take responsibility around money. So they would far rather give that responsibility to their partner, for example, or somebody else. And from our research, that's often created because they've been financially rescued. And this is a really important part because as a parent myself, you think that you're doing the best thing for your kids if your kids are in debt, or you wanna get them out of trouble, you wanna lend them some money. But there's lots of evidence to show that by financially rescuing somebody, you're actually disabling them. You are taking away their power.

And this is really interesting as well in the concept of, in your business, for example, if you're running a business, when you feel responsible for people's results, whether it be financially or practically, that often comes because we want to be the rescuer. We want to be responsible for people's results. And by being that way, we actually empower ourselves, but we disempower the learner or the students. And it's the same with the pacifist. They just feel icky. They're like, "I don't want that responsibility." Feeling that it creates.

And then the final one is the innovator.

The innovator, we see a lot in the entrepreneurial space. They're a combination of the pacifist and the architect and the impulsive. And the most challenging area for the innovator often is that they say yes to everything and they don't have very strong boundaries. So they're really good at creating opportunities for money to come in. They're often very good at making decisions about what to do with money and how to grow wealth, but they're not particularly great at putting boundaries around that. So sometimes they can get into burnout and overworking in their business.

Yeah, so it's a really fun way, I think, of just opening out conversations with money because when you can understand some of your main behaviors, you can start to shift towards, maybe if you are the architect, could I be a bit more impulsive with money? Or if you're in the impulsive, could I plan a bit more? Is there a way for me to get into a routine or a ritual that feels safe for me without everything had to be controlled and in a spreadsheet, for example? Definitely.

Want to find out more about your type? Take Catherine’s quiz!

But let's talk about if you and your partner have a different money type. I know you and your husband have a different money type. And I'm thinking about myself as you were describing all of them. I'm trying to think about which one is my husband. So yeah, can you talk about how you and your husband deal with having, what are your types and how do you deal with having two very different types?

Yeah, such a great question. So my husband is the architect and I am the impulsive. So you can imagine when you've got someone who wants to spend money and somebody who wants to save money, we have had clashes, we've had some challenging conversations around that.

He wants to get the spreadsheet out and I just want to run into a different room in the house. And we've learned really that as a couple in a relationship, it's really important to have your own financial needs met. I'm a really big believer in we have our own separate bank accounts, we have a joint account where all our bills go out and we have our own bank accounts because from a financial independence perspective, that's really important for me.

I think every woman, every man on the planet should have their own bank accounts.

That links in to lots of evidence around financial abuse and also challenging a lot of the way that money has always been handled. You know, by past generations, it was always the man that looked after the money. And that's very much changing. So we want to encourage that independence.

And because of that, that enables us to have our own financial goals. It enables us to have our own money pots of things that we're saving towards that we might not agree with.

It's like, I don't agree that he should be saving money for, you know, whatever he wants to spend his money on. And he probably doesn't agree with mine either. But that's okay. We don't have to be in complete harmony all of the time. And I think that the concept of a relationship is really understanding. It's not about your, you know, two halves coming together to make one person.

You are two different people. You have come from two completely different backgrounds when it comes to your relationship with money. You have different values that drive how you spend money. And so the way that we navigate that is to have regular conversations about what are we saving for together?

Like, what are some of the things that we want to do together? Like we want to go to Canada next year for a month. So we're like, cool, we'll go set up a Canada pot. That's a joint financial dream that we have.

But also, you know, I want to go have my teeth done next year. And that's important for me. Whereas for him, he's like, I don't care about that. So I really believe that even if you're coming from natural planner and impulsive with money, you can actually use that in a really powerful way to balance out some of the strengths and the challenges that you each as individuals have.

And so every month, we have a money date and we agree.

What are you working towards? What are we working towards together? And then who is going to be responsible for what? This month on our money date, we were looking at all of our financial areas of our life and we were like, we need to make a will. We've been putting it off for like the last two years

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This month on our money date, we were looking at all of our financial areas of our life and we were like, we need to make a will.

We've been putting it off for like the last two years because we couldn't decide who the guardians are going to be of the children. We were like, we need to make some movement on this this month.

And that's literally all we do every month.

We agree an area of movement that we're going to make some movement towards. And we decide who's going to go make the appointment at the lawyer's office, who's going to go speak to family about being guardians.

And it's just it's a really nice way for him to get into his planning and for me to be still in my impulsivity so that we can both experience joy at the same time.

I remember you had said to me at one point that you also do this thing where like you've set the budget together and then there's sort of like Catherine's area of like you go do whatever you want with this money. And I guess coming back to like the having different bank accounts and you can do whatever you please with the two different ones. I think that's so such a nice way to come to a really good compromise on that.

Yeah, I think it's not always about the compromise. I feel like you can compromise on certain things. And the one area I would say is to understand what your financial freedom number is as a couple, work towards that together, but then also go have some fun with your own pots of money.

And the way to like to work out your financial freedom number is to really think about how much, you know, how much are you spending every month if you were to take, you know, your monthly expenses and you can actually take your mortgage out of the equation with this because most of us would assume that if we have a mortgage, it's going to be cleared by the time we get to the point where we're no longer earning money, either through work or through our business.

So you take your sort of lifestyle expenses, your food, your petrol, you know, your household expenses and you times that by 12 to get that annualized figure.

And then that pot of money. So let's say you're spending. I'll use like an extreme example. Let's say you're spending just because it's easy math. Let's do like 10,000 pound a month times that by 12. That's 120,000 pounds.

You take the 120,000 pounds and you divide that by 4% or you can times it by 25. You get the same result. And that would be your financial freedom number. So 120,000 times 25 would be three million pounds.

And that would be your financial freedom number that together you would work on building assets, which might be pensions, property portfolios, it might be business assets, savings, investment accounts over time that can collectively build that three million.

Now, three million sounds like a lot, but actually, you know, if you're contributing to things like pensions and you're building business assets and you're investing, it's actually not that difficult to get to million-pound milestone marks.

And that's, I think, a really great conversation to have together collectively.

How do we get to this place of financial freedom where we're no longer reliant on earning money, but then still have your own financial joy pots that you can, you know, you don't have to ask each other permission to go, you know, go to the Caribbean in December with your friend or, you know, go to Necker Island.

Make those decisions for yourself. Yeah, I love that.

Catherine has an entire episode on this podcast episode on calculating your financial freedom number - you can grab it here if you’re interested!

So fabulous, right? Catherine and I originally met in a mastermind group and I've personally found that being around other very successful ladies in business and witnessing firsthand how they think about money has done a lot to actually change my own unhelpful money mindset beliefs.

So if you'd like to join Catherine and I on a mastermind trip and find out what really happens on these types of trips, then definitely watch this video next and come with Catherine and I on a trip to the Greek islands."


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