3 WAYS PEOPLE THINK ABOUT MONEY IN THEIR MINDS

The 3 ways people think about money in their minds. 


The premise of The Money Code is that there are three types of “money minds”: Fear, Happiness and Commitment. Once you know which of those minds applies to you, Duran believes, you’ll be able to manage your finances and make decisions about them a whole lot better. The book offers advice on how to make your Money Mind work for you. “I’m not telling people to change their money mind or who they are,” Duran said.


 “This isn’t therapy. You just need to understand yourself.” If you’re married or have a partner, it’s a good idea to know each other’s money mind, since that’ll help you talk about finances together in a meaningful way.


 Both of you may want to read the book or take the online quiz on the National Endowment for Financial Education. Each of the three money minds has pros and cons, as you’ll see. Fear : people with this money mind are “protectors.”


They’re driven by a quest for security and peace of mind, but never feel secure or satisfied, no matter how much success they attain.

 These are control freaks who dwell on what could go wrong. They typically live within their means, are well prepared for the unexpected and are cautious, careful decision makers. But they’re slow to act, which means they often miss opportunities.

 Do you worry much? “If you’re fear-based, you tend to wait to buy stocks until after they've gone up and then you sell once they start going down,” Not what you’d call the “buy low, sell high” strategy. Of the 50- to 64-year-old people who took the money mind online quiz, 61 percent of men and 57 percent of women fell into the Fear category.


Happiness : these money minds are “pleasure seekers.” They’re all about enjoying today. Thinking about the need to save often makes them frustrated and impatient, though — and, as a result, they frequently feel they don’t have enough money


. If you have a Happiness money mind, you’re probably not too anxious about the future, but you don’t spend enough time evaluating financial decisions. Commitment : people with this money mind are “givers.” When making a financial decision, they care mostly about how it will affect the people they love — and believe there’s always more they can give.


 If you have the Commitment money mind, however, you often neglect to consider the effect that your financial decisions will have on you. Money, we're told from an early age, cannot buy happiness.


Think Ebenezer Scrooge, who was rolling in dough yet miserable. And we've all heard stories about lottery winners whose windfalls seem to bring misfortune, not to mention celebrities for whom affluence enables self-destruction.


 In a world of 7 billion people (and that doesn't include the fictional ones), you can find stories to support any theory imaginable. The fact is, stripped of drama and moralizing, money is essentially a means of exchange.


 It can lead to trouble, sure, but it can also pay for heat in the winter, tuition at good schools for your children or airfare to visit grandchildren. In short, you can buy misery or you can buy happiness. What makes the difference is spending your money right. The Key to Using Money Well I’ve spent the past few years interviewing financially satisfied people in an effort to discover what they know that other people don't.


 Along the way, I’ve learned that the key to using money well is simply to change the way you think about it. Stop viewing money as evil or soulless, or interesting only in terms of how your pile measures up against your neighbor's.


 Instead, you need to think of money as a tool. As a means to acquiring, doing, and taking care of things that bring you joy. All of that sounds easy enough. But how do you adopt this mindset? The Three Premises of Wealth Through my research, I’ve learned that the happiest people operate under what I call the Three Premises of Wealth (and here “wealth” refers not so much to your net worth as it does to your outlook):


 • The First Premise of Wealth: I have enough. There are people who have more, but also plenty who have less.


• The Second Premise of Wealth: If I want more money than I have now in order to achieve big goals, I can figure out a way to get it.


 • The Third Premise of Wealth: Every dollar is a choice. How I earn it and spend it is up to me. These are simple notions, but they provide a vantage point that's markedly different from the way many of us approach money.


 Researchers have found that human happiness is — like it or not — partly based on how we stack up against a certain reference group.


 We feel rich if we have a bigger house or nicer car than our neighbors. But nothing forces us to think along those lines:


We can choose any reference group we want. Consider the 7 billion people on this planet. It’s probably safe to say that anyone reading this article lives in more comfort than at least 90 percent of our fellow human beings.


And that 90 percent can serve as a reference group as well. But there's a caveat: Just because most of us are phenomenally wealthy in the context of human history doesn’t mean we have to accept our current circumstances as inevitable and impossible to change.


 The Trouble With Standard Personal Finance Advice Personal finance articles often adopt a defeatist tone, suggesting that people can’t change their incomes, that their only recourse is to clip coupons or stop eating out to wring a few more dollars from their budgets.



 There’s nothing wrong with reducing your overhead, but it’s hard to build real wealth — the kind that gives you the power to create a world you want to live in — by saving 50 cents on a can of tuna. Financially happy people take a bolder approach.



 They identify the kind of work they enjoy then seek out new opportunities to do it, and some even create multiple income streams to support their big goals. Setting Your Own Goals What should those goals be?


 Financial planners tout the obvious — home ownership, a secure retirement, the children's college funds — and these are fine goals if they're truly what you want. But this brings me to that third Premise of Wealth:


 Your goals should be whatever you want them to be. You don’t have to buy a house that consumes 25 to 35 percent of your income. You might be happier living in a far more modest home and traveling the world with the money you save on housing.


 Maybe you want to build financial security not with an eye toward retiring at 65, but so you can do any kind of work you choose. For some, this is the biggest goal of all. In fact, the happiest people I know have found work they love so much they’d do it for free — then figured out a way to get paid for their avocation.


 Rather than maintaining a conventional fixation on retirement, why not put that same mental energy into finding the kind of work you’ll never want to retire from? The point is this: Happy people know that how we spend our money, just as how we spend our time, is a choice. Money can buy happiness when we tell it what to do.



 Truly wealthy people think of money as a tool — and, fortunately, you can learn to think the same way, even if you don't have all the money in the world.