Art of Starting Over: A 5-Year-Old Millionnaire That Feels Broke

April is Financial Awareness Month, and since money is one of my favorite subjects, let’s use this time to look at something most people avoid.

Our relationship with money.

Despite the fact that money is part of our everyday lives, it is one of the least talked about topics. According to a 2023 study by American Psychological Association, money remains the number one cause of stress for adults in the United States. At the same time, studies from Wells Fargo found that people are more comfortable talking about politics, religion, and even death than they are talking about money.

So we avoid the conversation, but still expect ourselves to be good at it.

This expectation alone will create tension in your relationship with money, but there are other things at play as well so let’s go deeper.

Most people are good at one or two areas of what I call the Money Cycle. Earn. Grow. Protect. Gift. Enjoy. But when handling money the parts we aren’t good at sabotage the areas we are good at. 

Whether you realize it or not, how you navigate the Money Cycle will determine not only your lifestyle, but your overall relationship with money. If you go straight from earning it to enjoying it and forget to grow, protect, and gift it your financial plan will suffer, you’ll have more stress, and you’ll likely not want to talk about money.

Your relationship with money isn’t about how much you have or don’t have. It’s possible to have large amounts of money and still feel like there isn’t enough. That feeling doesn’t come from your bank account, it comes from how you first learned to think about money. 

Most of your money beliefs were put in place by the time you were 5-years old. I’ll explain more in a bit, but just know that a five-year-old interpretation can follow someone all the way into adulthood. The 5-year old living inside isn’t emotionally satisfied, so it doesn’t feel rich. Despite material possessions that millionaire still feels like the 5-year-old who was once poor and broke.

That mix of emotions is real, but hard to explain.

The emotions are one part of it, but those emotions spark actions. Usually those actions try to feel the voids and soothe the emotions and that can get costly. 

Your income can increase but it may not help if your expenses also increase. New house, new car, new clothes, and that raise or inheritance disappears, bringing back the “broke” feeling. 

According to data from Federal Reserve, nearly one quarter of Americans have no retirement savings at all, and many who do still feel like they are behind. So if you feel that way, you’re not alone.

How often do you think about money? These thoughts, the feelings that come from those thoughts, and the actions create your relationship with money. Your relationship with money can change over time as you learn money lessons and receive new tools. When you look back over your financial life, do you view the shifts you’ve experienced as positive or negative?

What’s been on your mind as it relates to money? I’ve been talking to my clients and friends about retirement. We all seem to be feeling a little uneasy about it. I feel behind, yet I know there’s still time, so I also feel hopeful. More mixed emotions.

Usually, by the time people start talking about retirement, it feels a little too late. When you’re young, you think you have time. Then life starts to happen. Kids. Medical bills. Vacations. Responsibilities. And those things take precedence.

By the time you’re ready to focus, the advice is always the same. Start early. But they tell you that when you already feel late.

Whether you are thinking about retirement or another financial goal, there are many emotions that come into play. Most of them were passed down to you from your parents, your grandparents, your environment, your culture.

In the book, “Thinking, Fast and Slow,” Daniel Kahneman talks about how people who struggle to delay gratification are more likely to make impulsive decisions, including money decisions. He also points out that when people are highly motivated by money, they can become more independent, but also less willing to help others when money is their focus.

Conversely, I’ve seen something similar in my work.

People who have a hard time saying no, to others and to themselves, often struggle with saving. They spend emotionally. They spend to maintain relationships. They spend to feel good. They spend to feel loved. And since money is connected to love, this makes money decisions emotional.

In my work, I’ve also found that many people are good at enjoying money. They have that area of the money cycle perfected. And I find that in Black households, the Enjoy area of the money cycle is often encouraged. Part of this is cultural. Part of that is systemic. When you feel like you don’t have enough, or that you won’t ever have enough, it’s easy to shift into “I might as well enjoy what I have now.”

At the same time, data from the U.S. Census Bureau continues to show that there are still significant wealth gaps between Black and white households. That reality affects how people feel about saving, investing, and long-term planning.

If it doesn’t feel like enough, it’s hard to talk about financial planning in a positive way. Whether in a marriage, amongst friends, or with extended family, money conversations are based on how people feel. When there is enough, the conversation is easier. When there isn’t, it becomes tense. And even in wealthy families, negative money emotions can still exist. 

When stress builds, it shows up in your relationship with money.

Many things can slow down the flow of money, but there factures that affect the Black community and contribute to the wealth gap. If you had a child early, if you had to stop school, if life didn’t go the way you planned, you may feel like you’re playing catch up. Research has shown that major life events like early parenthood are often associated with poverty or with increased financial stress over time.

But whether you are underpaid or overspending, money stress will affect how you move through life. You can prepare for the future while enjoying your life today, but that balance is not easy. Though it’s not easy, it is possible and it is even more possible for those who have a sound, logical relationship with money. 

When your relationship with money is intact, you can find harmony in all areas of the money cycle. 

If you have young children or grandchildren, remind them that it doesn’t require a lot to get started. Even small amounts can help especially when you start early. One little trick you can do is to get your young loved one cash value life insurance. 

Ask your favorite life insurance agent how to do it. The younger the better. This not only helps them create a nest egg for their future heirs, but it’s also great if for any reason they need to use it during their lifetime. A bonus reason to get life insurance early is that lifestyle diseases can render one uninsurable. Getting life insurance when you are young keeps the cost low and protects insurability.  

Another way to help is to invest with your children or grandchildren. I recently saw a post from Charles Schwab about a teen investment account where parents can open an account with their teen and match their child’s contributions. It teaches discipline, but it also works with the mind’s desire to see results quickly.

Because we all want to see progress and as the account grows your child becomes more invested, literally and emotionally.

Your relationship with money started long before you earned your first dollar. Like you, there are young people all around you starting their relationship with money.

Research suggests that core money beliefs are formed by early childhood, often before age seven. The research revealed 85% of money beliefs are set in place by age 5 and 95% by age 15. So by the time we become teenagers, most of our financial habits and perceptions are already taking shape, even before we have real responsibilities.

Which means we are making adult decisions with childhood interpretations of money.

Think about your first money memory.

I became aware of money at five years old. I received a five dollar bill in a birthday card. It felt good to make the connection, I was five years old and I got five dollars. My brain connected the numbers, and from that moment on, I expected money on my birthday. But I also had a higher awareness of money overall.

That’s how it starts, one incident creates your interpretations.

I have a friend whose daughter has been dancing since she was five. Her room was filled with pictures of dancers. Ballet, modern, tap, hip hop.

She recently turned thirteen, and one day my friend walked into her daughter's room and noticed she took the dancers down and replaced them with pictures of luxury cars, houses, and possessions.

When her mom asked why, she said, “You told me to put up pictures of who I want to be. I don’t see myself as a dancer. I see myself as rich.”

My question was, “who told her she couldn’t be a rich dancer?”

Based on my experience I know the answer is, her five year old observations, society, and whether they know it or not her parents did too.

She had been watching them. Watching dancers. Watching wealthy people. And she made an interpretation. If you want to be rich, dancing won’t get you there. So she shifted. Not because she didn’t love dance, but because she didn’t know how to connect it to wealth.

What have you abandoned because you weren’t sure how to align it with your financial goals?

If you are starting over, go back and think about what money meant to you when you were five. Did you feel like you had a lack, a lot, or enough? Then think about what changed when you became a teenager. And again when you started making your own money.

As you think about it, ask yourself...

How do I want to be remembered? By my family. By my community. By the people I care about. And how does my behavior with money support that?

Whatever your answer, understand that you can shift your relationship with money. It doesn’t have to remain the way it is today, you can adjust it. Not overnight. But with awareness. 

Like the book, “Thinking, Fast and Slow,” the brain also LEARNS fast and slow. The brain learns fast in crisis and slow when decisions are more logical. So if you are trying to build a new relationship with money, you will need time and repetition. Take your time, but start now.

When you learn something new about your money story, pass it on. There is a five year old, a fifteen year old, or even a fifty year old who needs to hear it.

Tell your story.

Even if it’s not the one you planned. Most people don’t have the perfect money story. But that doesn’t mean it’s not worth telling. 

So this month, let’s share our money stories with those we care about, especially the young ones, in hopes that they learn from our lessons and start earlier like we all wish we did.