How Negative Thinking Influences Money Management

credit: kat smith

Ever think to yourself, “I can’t do it,” or, “I’m not good enough”? Negative cognitions may be to blame.

The first step to being good with money is adopting a positive mindset that sets you up for success. Easy, right? No, of course it isn’t. But, why isn’t it? The issue runs much deeper than simply motivating yourself to success by trying on a few positive affirmations every morning.

For those that have experienced trauma and are currently working to set goals, they can sometimes find that negative thoughts can get in the way. These thoughts can include:

  • the self-deprecating phrases, such as “I’m such an idiot when it comes to spending money.”

  • the insecure phrases, such as" “there not way I’ll ever finish this and get paid.”

  • the narcissistic, “everyone else is a loser, only I can save this much.”

  • the defeatist, “I went outside my budget again, I’ll never be able to retire!”

Negative cognitions are distorted beliefs about yourself, a given situation, or other people. They usually center around the idea of failure or incompetence and can feel like a prediction, “I knew I would mess that up, I’m always so careless.”

As you can imagine, being burdened with this line of thinking doesn’t contribute much in the way of achieving goals and rewarding yourself over progress. How are you supposed to be excited over saving your first $1,000 if you keep spending your paycheck, then later feeling angry at yourself for getting off track?

To understand how to update your thinking and improve your mindset, you must first understand where your negative cognitions come from. For survivors, negative cognitions are belief systems that were “implanted”, or conditioned, into the brain during a traumatic experience. For instance, if a three year-old child that was hit by his father repeatedly while his father was intoxicated, might have led the child might think, “it was my fault for getting hit.” This same child, presenting as an adult, might later grow to automatically blame himself every time something bad happens because he assumes he “deserves it.” Why did this happen?

Developmentally, a three year old (according to Jean Piaget) is egocentric and unable to see the world outside of himself because his brain has not yet developed in such a way that allows for other’s perceptions and experiences to balance his own. To this child, he perceives himself as controlling the world and it being connected to him, therefore, when he gets hit by his father, developmentally it was something he was able to control and failed to.

As you can imagine, the influence of trauma at various stages of development can have lifelong implications for us as adults. We may not always understand where these cognitions come from, but there is absolutely hope in modifying them, or eradicating them completely.

Steps to Change Negative Cognitions:

1) Identify what the cognition is and when it tends to happen. For example, when you fall off your budget, you automatically assume you’re a failure.

2) Identify what the opposite of that cognition might be. For instance, if you tell yourself, “I’m stupid for getting away from my budget,” the opposite cognition could be, “I am capable of adapting to new circumstances.”

3) Focus on what went right. For example, “okay, so I overspent on food this month. It’s okay, because I actually never went to the movies last week so have extra money there. I’m doing okay!”

4) Slow down to speed up. A glittery, perky mindset isn’t going to happen overnight. Remind yourself to slow down and allow for mistakes to happen. This is not a perfect process with immediate results- this is gently growing in a new direction, towards the light. Slow down, try again, and eventually it will become easier.

5) Look into EMDR therapy. EMDR is excellent at rewriting/”installing” new cognitions that are positive and more self-serving. Listen to the audio file below to learn more.

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