Posted by Tim Stobbs on December 23, 2009
For a book that in some respects was not even a personal finance book I found The Secret Language of Money by David Krueger with John David Mann a fascinating read. Yes, first off you will find no discussion of tax savings or where to invest, but rather a series of deeper questions: why if the math so easy do I have trouble paying off my debts? If I’ve got all this money, why am I not happy? Why do I buy dumb things when I regret them afterwords?
Effectively the book explores the crossroads of psychology and personal finance and this is what made it an interesting read for me. It provided a window into why we do some incredibly stupid things with our money and also the book explores a key point: spending is emotional. Money is never just money: it’s your hopes, fears, wishes and comforts all wrapped up in a thin bill or coin.
The book actually taught me several new things that I’ve always known, but never known why. For example, I’ve been a big fan of sleep on it before making a big decision. I never really understood why it worked until this book. In a nut shell when you are tired or highly emotional basically your brain starts to by pass the parts of the brain that do logic so you are basically making decisions mostly on emotion and instinct which is fine when a person is deciding to run away or fight, but sucks when you are deciding on selling a stock or not.
The book is structured about the concept of your money story. Your money story is what you tell yourself about money. It may show you why you buy new things, why you don’t’ save more or why you just can’t seem to make a go of your own business. In the end via a series of exercises we are shown what are money story is and better yet, how to change it if you want to.
This is where the book pulled out a fact that blew me away. Apparently your brain can’t tell the difference between you actually doing something and visualizing doing something. In either case it will develop new pathways in your head if you practice enough either in real life or in your head. So you can basically if you visualize succeeding at a goal long enough your brain will literally change to support that goal happening. You can reprogram yourself if you want to. You have no excuse for “I’m not a saver or I can’t do that” you can be or do anything that you want.
Overall I highly suggest reading this book as you are likely going to learn a few items about yourself and hopefully make you a bit more understanding with some of you own money behaviours. After all the math is easy, it’s the why we do things that is hard.