More than words
How shifting the words we use about finance can also help our mindset
Hi friend,
As a writer, I love language and I’m always fascinated by how the words we use to describe ourselves shape our behaviours. One of the things I’ve learned a lot about lately is the language of finance, and how we tend to use language that prevents us from getting ahead financially.
Most of the language we use around finance comes from the people around us—the media we consume, our parents’ attitudes and communications (or lack thereof) about finance, and even how our friends and colleagues talk. Often, this language becomes so ingrained, we don’t realize we’re using it and we don’t see the impact the words we use have on our emotions and our actions.
So, if you’re having difficulty taking control of your finances, or you’re just feeling a bit powerless about money, here are some ways to reframe the language you use. (And note that I’ve used all of these “limiting” phrases myself, so no judgement against you if you’re using them.)
Common phrase: I’m poor
Revised: I’m broke
A lot of people (myself included) refer to themselves as poor, when in fact they mean they’re broke (or they refer to themselves as poor even when they have tens of thousands of dollars in the bank). We use “poor” as a catch-all phrase to describe ourselves if there are purchases we’d like to make that we simply can’t afford.
“I’d love to go to that fancy restaurant and eat the lobster, but I’m too poor.”
Poor means you don’t have the financial means to cover necessities—safe housing, food, and utilities. You are living in poverty. You face daily decisions about whether to buy food or pay the rent. You face financial hardship every single day, and there is seemingly no end to it. It is cycle that is incredibly difficult to get out of, no matter how hard you work. You can’t make different decisions because all your money is going to cover necessities.
Broke means you can afford the necessities, but don’t necessarily have money for the fun stuff. You might not be getting ahead or have anything saved for an emergency or be able to afford all the products recommended by your favourite influencer, but you’re not at risk of not eating tomorrow because you can’t afford groceries. You don’t face constant worry about whether you’ll lose your home.
Being poor is a very hard cycle to break. Yes, being too broke to afford the fun things sucks. It’s not a great position to be in. But for many of us, it’s a temporary way of existing. We could, for example, simply make different financial decisions such as not going on vacations for a while. We might not like making that shift, but it can be done and within a few months of making that change we’ll likely find our finances have improved.
Though I have used the word “poor” to describe myself, I have never actually been poor. I’ve been broke, due to my own financial decisions and my choice to be a freelancer writer (which has its income ebbs and flows). But I’ve never been at real risk of losing my home and I’ve always had safety nets I knew would step in to help me. I also know that I’m in a privileged position where I can make better decisions to improve my finances, which is what I’m currently doing.
Note that calling ourselves poor when we have a new luxury vehicle in the driveway or thousands of dollars in the bank (for example) also has social implications. It diminishes the experiences of people living in poverty, who are housing insecure and face constant hardship that they can’t get themselves out of, no matter how hard they work. Not being able to afford a renovation isn’t even close to the same level as not being able to afford food.
Common phrase: Saving money
Revised: Building wealth
Saving feels like deprivation. You’re not spending money today (usually on something you really want) so you can have that money for something you might want in the future. It doesn’t feel great, and it’s difficult to turn down something we really want now to save money.
If we reframe it as building wealth, we take the emphasis off the negative (not buying something) and put it on the positive (growing our wealth). We give ourselves an actual goal and a motivation not to spend, because wealth implies that at some point in the future we’ll be able to spend however we want.
Common wording: Budgeting
Revised: Prioritizing (or allocating or investing)
Similar to saving, budgeting implies depriving yourself of something you want now. It puts you in a scarcity mindset. Instead of budgeting, try looking at it as prioritizing your funds.
For example, as I work to get my finances more under control, travel this year isn’t a priority. That doesn’t mean it won’t be in the future—I can always revise my priority list. But for this year, I’m prioritizing time spent at or near home, with friends (or put another way, I’m investing in my relationships). It gives us power over our finances because we get to decide what our priority is, and spend accordingly.
You get to decide what is and isn’t a priority for you based on your needs, goals, and preferences. While travel isn’t my priority as I work to financial freedom, it might be yours and you might de-prioritize something that I love (like going to local sporting events).
Final thoughts
These small differences in our use of language can have a huge impact on how we think about our money and how successful we are at obtaining financial freedom. They give us more power and take us out of a scarcity mindset, into one of opportunity and possibility.
Extra trick
One of the things I’ve done recently to help shift my mindset is rename the folders on my phone’s screens.
“Banking” becomes “I am wealthy”
“Fitness” → “I am healthy”
“Travel” → “I love new places”
“Shopping” → “I help the economy”
“Social media” → “I am connected”
“Productivity” → “I am organized”
“News” → “I am aware” (which also constantly reminds me of Alanis Morissette’s “Head Over Feet”)
“Games” → “I love fun”
It’s a way to keep a positive mindset around apps and activities that are somewhat mundane, and it gives me a nice emotional boost during the day to see phrases like “I am wealthy” and “I am organized” on my phone.
Cheers to your financial freedom,
Heidi