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What zip code is your financial neighborhood? 90210, the world of glamour and wealth, or 05501*, where the lowest reported taxable income is earned?
You live in a physical neighborhood with houses, driveways, and landscape. It’s the backdrop of your life, where you sleep, keep your belongings, and invite your friends to. But you also have a financial neighborhood. This is also the backdrop of your life and how you design your standard of living. Is your scenery opulent or sparse, or somewhere in the middle?
Figuratively speaking, your financial neighborhood is where you live in monetary terms. There is a range of wealth within your financial neighborhood where some are on the high end and some are on the low end. You are most likely aware of the level or lack of wealth in your financial neighborhood and identify your space within the spectrum. As expected, the essence of your financial familiarity is learned from family. On a subliminal level, the comfort level associated with those surroundings is deeply embedded in your mind. There’s no doubt it’s safe and predictable.
The residents of each neighborhood typically share similar viewpoints on society, education, occupations, financial obligations, and financial dealings with family. They have similar money scripts and live life in a similar fashion. It’s likely that they donate to the same charitable organizations.
What piqued my interest about this topic is that each person’s financial achievements are defined by the limits of their monetary comfort zone. Approaching either end of the spectrum too closely will provoke a stress response. If you step too close to either edge, your behavior will steer you back to within the boundaries.
As explained in Wired For Wealth by Dr. Brad Klontz, on a primal level, you wish to be accepted into the family dynamic. The tribal mentality avoids being labeled a pariah as straying from the family or village could pose a safety danger.
Because the mentality is so deeply ingrained, you will ultimately feel that a certain level of wealth is unattainable and will prove that concept to yourself over and over. Alternatively, your actions will tie you to reach the level of wealth that you identify with.
Difficulties may surface when you approach the fringes of either the top or bottom rim. This works in strange ways. People that live a middle-income lifestyle may come into money – more money than they’re used to. The reactions from their friends and relatives may cause awkwardness, bitterness, or jealousy. Relationships may change, and not for the better.
It can be as subtle as a graduating college student being the only family member to earn an education past high school. Family members sometimes display the “crab-in-the-bucket” mentality. When one crab is about to escape, the others pull it back down.
Although most would like to experience the problem, having lots of money is stressful. Managing large sums of money can be confusing and may attract freeloading family members and friends.
If your financial neighborhood suits you, great. If not, you may be experiencing some frustration with your surroundings. Would you like to be able to raise its top limit? Or, do you need to lower the bottom limit?
Sometimes there’s a need to lower the bottom limit. Think of a graduating college student that wants to be completely independent. If they’re grown up with indulgences and try to repeat that lifestyle, they may max out their credit to do so. Lowering the bottom level of their financial mindset will help them live within the standard of their starting salary.
Remember the part about the family influence? My earliest memories of a nice suburban home on a dead-end street stayed with me. At the age of fourteen, I knew I wanted to own my own home. I bought my home before I was married and I live on a dead-end street, which is a repeat setting. It’s small, but nice. The only things my home is missing are an attached garage and central air conditioning, but those are things I can live with. I have no children so there’s no need for a huge home. Strangely enough, I don’t think I would feel comfortable living in a large home on a huge piece of property where my neighbors are half an acre away. I never thought about it before, but that’s an example of my subconscious financial neighborhood dictating my behavior.
My parents’ financial neighborhood involved financial strain. If they weren’t financially miserable, they wouldn’t know how to be. I know I stepped over that legacy. I mentally rejected my parents’ money habits from the time I was old enough to babysit. And I’ve stayed in the same place for more than 20 years, no moving around due to financial instability. So, some aspects of the early financial neighborhood are accepted, and some are rejected.
This feels normal to me, but may not feel normal to someone that grew up in a gated community or an apartment building. It’s all relative.
Ask yourself if you would feel comfortable raising your limit. Changing financial neighborhoods would be like accepting a new identity. Pace yourself on this one.
What money scripts, affirmations, and actions might facilitate the change?