- The Secret Language Of Money
Everyone knows that they should live below their means, save for retirement, pay off debt and so on, but why do so many people fail? The math is simple and does not lie; yet many people fail to save enough money and fall too far in debt. Maybe personal finance is about more than just math? The Secret Language of Money tries to tackle this issue from a psychological point of view.
What is The Secret Language Of Money about
The book is a look at the psychological aspect of money management. What is your money story? How has your early life experience affected your perception of money and money management skills? The authors tackle personal finance from a psychological and behavioral point of view, they do not talk about what our savings rate should be or what type of portfolio to have. It provides the reader with the tools to understand why they perceive money the way they do and how to change their behavior. The primary author of this book is Dr. David Krueger, who is a psychiatrist and an Executive Mentor Coach. Krueger touches on many important aspects of psychology and money, such as early experiences with money and your money story. He effectively uses many real life examples from his practice to illustrate these notions. The authors’ do an excellent job in brining psychology and money together.
What I Like:
- A different view on personal finance – not just focusing on math but rather on a journey to explore one’s true attitude and feelings towards money and how to change these behaviors.
- Excellent integration of psychology and money, clear examples used to illustrate arguments.
- No jargon, there are no (or not many) psychology or finance jargon used.
- Work sheets – worksheets are included to help reader assess their personal money attitude.
What I Don’t Like:
- Sidetracking – There were times when the authors sidetracked too far away from the main topic, sometimes it felt as if I was reading a psychology textbook.
Share your thoughts on psychology and money and win a copy of The Secret Language of Money!!
Conclusion:
As you can see I do not have many complains about the book. I very much enjoyed it and it was refreshing to read a book on personal finance and learn something new. I believe understanding one’s money psychology is crucial in order to be financially successful and this book does an excellent job in helping readers understand their money story. Just be warned that it might get a little boring towards the middle section of it, but can be of great benefit in the long run. If you are looking for the usual personal finance book and basic budgeting and saving tips then look away, however if you want to get a better understanding of your finances and your thoughts and feelings towards this sensitive topic then this is a must-read for you.
Financial Highway Rating: [rating=5]
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{ 7 comments… read them below or add one }
I think money is a lot more about psychology than math. Most of us can master the math, but the psychology can be a lot harder. This is especially important for people who repeatedly try and fail to get control of their finances. There is obviously something at work there besides just money. Exploring our past to find causes for our behaviour is interesting as well.
Sounds like a great book. If I don’t win it I’ll have to purchase a copy myself!
I’m currently reading “Nudge: Improving Decisions about Health Wealth and Happiness” by Richard H. Thaler and Cass R. Sunstein. Takes the psychology of money to a whole other level – we know people don’t make logical decisions about money, so what then as a society are we obligated to do about that?
Interesting questions, with no easy answers.
Thank you for the book recommendation.
Overspending is definitely not an issue to be attacked using mathematics as a means of adjusting behaviors. Mathematics appeals to logic and reason, and I contend that most people aren’t logical or reasonable! Since we are not logical creatures, logic and reason will do little to change our behaviors. Emotions are the root of the issue. Over spending is analogous to over eating. Short of a biological chemical imbalance, the root causes are the same. If your spending is way out of whack, I submit you should read a diet book that talks about the emotional side of eating and substitute the work “money” for “food” and you will be well on your way to thinning out your spending.
I was just thinking about the psychology of money but in the sense of ‘are we holding ourselves back in obtaining wealth’. At least for me, I’m constantly focused on penny pinching and paying down my debt. Both great for my journey. But then you see people who are quite wealthy. And I wonder, ‘am I too focused’ that I am inhibiting my wealth building skills. Ah food for thought. Sounds like a good book.
Thanks everyone for entering I forgot to mention the Deadline: FRIDAY DECEMBER 18TH!
good luck!
People’s actions are emotionally driven. They’re not driven by numbers. Numbers are used to justify the actions or decisions. That’s why people cling to numbers that aren’t necessarily true or accurate. They don’t question the numbers that serve a purpose to their action. If people were able to separate the emotions they would be able to do a better job of disseminating between good and bad financial advice. Unfortunately, being wealthy is almost always a very emotional thing.
Very interesting! This is a topic that people are uncomfortable talking about. It is more closely guarded than ones sex life.
This comes from the idea that other people understand finances and you don’t. In reality no one completely understands wealth although many understand poverty. Gaining wealth is actually easy to do. Study how others have done it and copy them step by step and you will have wealth too. The same things have worked for 5,000 years.
I believe that most people do not desire wealth or they would have it. Remember that money is an invention. No one is born with a dime. Because it is a cultural creation it is somewhat nebulous and therefore difficult to exactly define.
Excellent reading
Patrick