Financial decisions are based on facts and formulas, so it is common to think of them as rational and logical. The reality is that decisions, even financial ones, are based on emotions. Attitudes and beliefs developed throughout your life affect your financial decisions. The more you understand how your beliefs shape your attitudes, the more realistically you will approach financial matters. The same is true for your employees and customers.

Many decisions are influenced by reactive patterns that are triggered in subconscious ways we don’t even notice. Perceptions and experiences are shaped into beliefs over time, and we rewrite our own memories to fit those belief systems. Since the brain is basically a computer that filters information, it deletes what is not determined to be useful, and though we retain each memory, we lose the ability to locate details and experiences as they disappear into the messy filing system of the subconscious.

Unless you can analyze your beliefs and be conscious of learned attitudes, you may be unaware of the reactive patterns driving your financial decisions. When you understand that beliefs are not ultimate truths, you can exercise your prerogative to reshape your attitudes about money and financial issues.

Start with your childhood. Did your parents share information on family finances at the dinner table or protect you from the reality of budgeting and debt payment? In the sitcom “Roseanne,” the Conner children shared the stress of their parents’ constant budget struggles. Your attitude about saving versus spending and your risk tolerance threshold are most likely related to how much information you received about family finances and how secure you felt about your family environment. If your parents protected you, you may have grown up free of stress about money but have completely unrealistic beliefs about budgeting or retirement planning.

If you received an allowance as a child, it was either an exchange of value or a gift. You either had to perform chores to earn it or had no obligation. Did it affect your perception of how work relates to reward? In the workplace, managers view bonuses as an extension of the paycheck—something earned for work performed. If you have employees who received an allowance without any obligation to work for it, they may see their bonuses as gifts unrelated to their performance.

When you earned money or received it as a gift, were you expected to save at least part of it, or did you spend it immediately? If you had your own savings account as a young child and watched it grow into a nest egg, you learned about contingency planning. If you spent every dime you received, you may still buy on impulse and be comfortable living from paycheck to paycheck. If you never learned to defer gratification, you may be comfortable with larger debt levels in your business, especially if your parents freely used credit.

If you were expected to earn money by mowing lawns or babysitting, you learned a few entrepreneurial skills that have followed you into your business. You were confident that you could support yourself and less likely to panic if you were set free on your 18th birthday with only a blanket and your piggy bank. If your family helped you make a more gradual transition, you may still be dependent on that support and more likely to take risks in your business, expecting a similar safety net.

The responsibility of establishing a household and supporting a family is similar to running your business. Did you continue the patterns of your own childhood or deliberately alter them? Both your employees and your children depend on your financial acumen to ensure their own financial security.

If your parents had conflicting views about money, which did you emulate—a saver or a spender? Did you choose a spouse or partner whose views align with yours, or are you repeating the same conflict patterns? These conflicts can also be repeated if you share management duties with other family members in your company or employ managers with different beliefs about money and finances.

This issue is often generational for electrical contractors. For example, the founder has kept the company debt-free for its first 30 years, when along comes Junior with a fantastic idea for increasing revenue by acquiring debt. The founder has held his conservative view for an entire generation and is reluctant to take on the risk associated with incurring loan obligations. The son thinks Dad is holding the company back. Employees choose sides, and the team suffers.

As you become aware of your beliefs about money, you will begin to make more rational, thoughtful decisions about financial matters. Repeating learned patterns is commendable when you consciously choose to apply them.


NORBERG-JOHNSON is a former subcontractor and past president of two national construction associations. She may be reached at ddjohnson0336@sbcglobal.net.