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Writer's pictureMonica Wales

The truth about how we learn about money

As a financial coach, I’m always listening to how people rationalize their financial decisions. My job as a coach is not to judge. I am genuinely curious about how we arrive at these decisions that involve our financial stability and future.

One way that we arrive at these decisions is by our upbringing. I was recently presenting a short session to local 7th graders on how to spend, save, and give. We also talked about the cost of higher education, scholarships and student loans. One student in the chat box wrote, “my mom says that millionaires drive beater cars. Do you agree with that?” My response? “What do you consider a beater car?” Kent and I have beautiful well-cared for SUVs. They are comfortable and functional. Both vehicles are 14 years old (older than most of the students I was talking to). My view of a beater car is a “clunker” car that doesn’t look good and is unreliable. So, according to my definition, you don’t have to drive a beater car to have significant savings. You may not be able to or choose to buy a brand-new car, but you certainly can have a nice and reliable car and still save money. All this to say that our upbringing has an impact on our views about money. We learn how to spend, save and give from the examples of our family and closest friends.

Another way that we make decisions about out money is by exposure to incentive-like offers. I say incentive-like because, if the offer seems too good to be true, it probably is. And if it seems easy, there’s probably more to the process than we know or want to know. We might find that because we are paying such little interest on a loan that we pay it off last or make minimum payments. We may be waiting for the federal government to forgive student loans that have been taken out, for which services have already been rendered. We may be considering debt consolidation services or bankruptcy. We might even borrow from our retirement accounts because there is not a specific penalty that we can see such as taxes or early withdrawal penalties. What we don’t see is the lost earnings on that investment when we have taken any amount of money out. What we don’t see is the interest accruing, no matter how small on the loans or the hidden fees to consolidate debt or file for bankruptcy.


I’ve also seen clients use “tools” to help them budget. There are helpful tools that help you set a budget and track your spending which can be hugely beneficial. I’ve shared my personal favorites in a previous post, EveryDollar and YNAB—You Need A Budget. But not all budget tools can be treated the same. I recently learned about a different budgeting tool that automatically takes out small and random portions of money from your accounts to help you save for big financial goals, like the purchase of a car or a vacation. For example, today it might take out $2.71 and tomorrow, it may take out $7.34 and place these funds into a savings account. I’ve also heard about financial institutions offering a “simple way to save” that includes rounding your every expense up to the next whole dollar and putting the difference into a savings account for you. For example, if you spend $62.38 at Fred Meyer, it will take out $63 and place the $.62 in your savings account. Both of these options tout a “set-it and forget-it” mindset. It doesn’t encourage consumers to really pay attention to every dollar that comes in vs. goes out. It also removes the responsibility component of what it means to be intentional with your money.


Regardless of how you learned about how to save, invest, and pay off debt I know that people are doing the best they can with the information that they have at that time. Some realize that their strategy isn’t or hasn’t been working. That’s why they work with me as a financial coach. We work together to develop a plan for them to have 100% complete control over “their money.”

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