I grew up living the so-called American Dream. But the cold-hearted truth is that this “Dream” is less about reality and more about appearance. It’s less about being and more about showing.
We want to look like we have money, but we HATE openly talking about it. My parents didn’t even tell me they had taken student loans for my college or how they worked!
Money and personal finance were sources of incredibly high stress on my household, but we couldn’t let others know –that was taboo!
Something wasn’t right. I didn’t want to have the same relationship with money my parents had, nor the tension and arguments that came with it.
I wanted to educate myself financially, learn about money management, and understand money –not fear it or endure its pressing stress.
One thing I started to uncover is that money doesn’t have to be such a closeted subject.
There’s a clear resistance to openly discussing anything even slightly related to money –both in our personal lives and in business.
And we need to overcome it.
That’s why we now share our financials statements every month at my company Jakt: to help other companies in the same position as we once were and to make an active effort to start a conversation about money.
Not talking about it skews our understanding of money and inevitably gets us in trouble later in life.
We live in an economic system that promotes overspending and undersaving.
We are taught from a very early age that it’s ok to spend money you don’t have to impress other people. But keeping up with that external facade of having money can get very expensive.
And that’s a problem that follows you no matter how large your income gets —10% of individuals making over $100k/year say they still can’t make ends meet.
People don’t like to talk about how much money they make, or how much they spend on things, or their real net worth: if you have $10K in credit card debt and $1K in your bank account, yes, you have a negative net worth.
Most people don’t even have the most basic knowledge about how money works. Rather, we are taught to use credit cards, borrow money and live a blind fantasy taking out unnecessary loans.
Yet most of us live above our means and don’t really know how interest rates work and how quickly we can go under.
Instead of facing the reality that we have a negative net worth, we kid ourselves into thinking we’re well off and own “assets.” When, in reality, we’re one big walking liability.
By the way, if you are unsure, an asset produces money and gives you a return. That $1,200 jacket you just bought is not an asset –even if repeating “but I’ll wear it a hundred times” or “but it’s 70% off!” helps you sleep at night.
And when our expenses rise and reach a breaking point, what do we do?
We use credit and high-interest loans… anything that will allow us to maintain our fabricated image for just a bit longer.
I’ve seen countless people spend money on credit cards like it was free money.
There’s no blue genie behind it with unlimited funds, I promise. They don’t understand for a second that, when you carry the balance, the $10,000 watch they bought actually cost them $12,000 after the card company charged their interest.
And it’s not just about being in financial trouble. When you owe money to someone –a bank, a family member –you no longer have control.
You’ve lost control of your money, yourself, and your freedom.
Instead of ignoring your personal finances, spending unnecessary money every month, and putting what you can’t afford on your credit card, look at your balance right in the face and don’t shy away from it.
It’s a reality check and you might not like the answer –but it’s better now than later.
Breaking out from the money taboo
We fear money. We’ve been told it is not polite to ask questions about other people’s finances –you should mind your own business, right?
But the truth is, it is okay to talk about it.
Money is just a tool. Nothing more, nothing less.
And this tool allows us to fairly exchange value, keep (ours and other) businesses running, and advance as a society.
Life and business are just one big game, and money helps us play it: from hiring employees, renting office space, to purchasing products and services we need.
The problem is when you tie how many zeros your bank account has to your self-worth. You are attaching an emotional element to money –and that leads to showing off to people that you have money (even if you really don’t).
Your self-worth does not depend on how much money you dropped on a Gucci belt. Nothing will change, well, other than the skyrocketing credit card debt you owe the bank.
Flaunting and trying to keep up with the Joneses will only lead you into financial trouble.
Either you use money or it uses you.
Linking your happiness and well-being to the immediate gratification from material objects is a very short-sighted play. Americans between the ages of 55-64 (just inches away from retirement) have a jaw-dropping average net worth of only $45,447 –and plenty of them are still in debt.
Considering that we now live longer than ever and Social Security does not account for that, the future looks bleak for many.
When you retire at 65 (and you still have 20-30 years to live), what money are you going to live with? The government can’t and won’t take care of you –you have to care of yourself.
For some (and I’d say many), the problem is not that they didn’t make enough throughout their life. It’s that their relationship with money was so messed up that they simply threw it down the drain with unnecessary purchases and high-interest debt.
You don’t want to retire at 60 (or 70, or 80!) after decades of working and have zero dollars in your pocket or negative net worth.
Emotionally overspending will keep freedom –doing things by choice, not because you have to– the dream that always remained a dream.
Money doesn’t have to be a taboo or the root of all evil.
But we are hesitant to talk about it, we don’t educate ourselves on how to manage it, and we care more about other people’s opinions than being financially responsible.
But money itself, away from personal attachments and preconceptions, is just a tool!
And by keeping it close to our hearts and not discussing it openly, we are making it extremely hard for others to rewire their relationship with it.
Money is meant to be used and multiplied, but as long as you let money control you and you don’t know how to use it, it will use you and you’ll never be free.
Instead, shift your mindset towards money as an approachable tool that lets you keep playing the game and help more people.