Rewiring Your Money Brain

Jan 23, 2024
nervous system, mindset, money brain, fight or flight, impluse spending, addiction, spending addiction, neuroscience, money and the brain, personal finance, impulse spending, getting into debt, money avoidance, how to fix our relationship with money, money hacks

The Fine Line Between Panic and Opportunity

Ever been doing really well, everything's flowing, and then boom - you meet a great person, or a recruiter offers you an insane job, and instead of feeling 'Yes, I got this,' you're hit with total panic. That's your nervous system not knowing the difference between a threat and an opportunity. Whether it's the adrenaline rush from a hot date or sweaty palms before a major job interview, your body reacts in remarkably similar ways. Let's unpack why this happens and how it's a game-changer for chemically and alchemically changing your relationship with money.

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Your Nervous System Doesn’t Play Favorites

When faced with significant life events – good or bad – our bodies release a cocktail of chemicals like adrenaline and cortisol. This natural, physiological 'fight or flight' response doesn't always distinguish between a threat and a golden opportunity. You might think those incredible hormones are telling you you’ve found the love of your life when, in fact, you were blinded to their 17 red flags. Or you could be so freaked out by manifesting your dream job that you assume it’s not real.

I often think about how empowered celebrities like Beyonce and Taylor Swift and athletes like Aaron Judge handle opportunities. I remember a story about a hockey player who received the largest deal in NHL history only to crumble under pressure.

The Science Behind Our Reactions

"AJ, why am I about to get a science class introduction to the nervous system?" It’s because the nervous system and your relationship with money are deeply interconnected. And your relationship with money won't change if you keep ignoring your body's signals 🚨.

When we encounter an uncertain situation or need to make a quick decision, our amygdala – the part of the brain 🧠 responsible for emotional processing – sends a distress signal to the hypothalamus. This happens when you see 'sale ends tonight!' or just an ordinary letter from the IRS. So your amygdala says, 'Hey, something suspect is happening. Can you check it out, Hypothalamus?'

The hypothalamus is like, 'Yo bro, I got this. Let me see if this is a serious threat or just smoke.' 'Let me get my boys to check out the scene.' The 'boys' refers to the sympathetic nervous system, the part of you that releases adrenaline from the adrenal glands. Imagine millions of little army men running through your body saying "ALERT, ALERT." your heart's like, 'wuttt' and all your cells are bombarded with cortisol.. all because of a sale.

As you can imagine, this system isn't perfect. Because the nervous system doesn’t discriminate between good and bad, your body reacts similarly to a lion chasing you, a late credit card payment, or your dream opportunity that feels too good to be true.

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Financial Decisions: Reading Your Body’s Signals

In the realm of finance, there’s no greater example of how a jacked-up nervous system can wreak havoc on your relationship with money. The chemical responses triggered by our nervous system often blur the line between fear and excitement, leading to a range of financial behaviors. Understanding this IS pivotal in navigating financial decisions with clarity and confidence. Here are some real-world examples:

Overzealous Debt Repayment: 9 out of 10 of our clients in debt want to pay it off ASAP at all costs. 'Put all my income towards debt! See if I care.' But we care. And without a savings plan in place, aggressively paying off debt leads to two things. One: More debt. Two: No money. Debt is so intrinsically tied to negative feelings that our nervous system can recoil at the thought of it, spurring us to do absolutely insane things like taking out of our 401k to pay it off. If you've done this, it's okay. You are not alone. But this extreme approach often leads most people right back into debt due to a lack of funds for daily living expenses. Here, the initial rush of 'fight or flight' causes a hasty decision without considering the long-term implications. It also doesn’t solve the root problems, which usually are a combination of shame, guilt, avoidance, and an unwillingness to change habits.

Impulse Spending at Weird Times: Take the scenario where someone gets broken up with and, in response, makes an impulsive purchase – regardless of whether they can afford it. This action is a direct result of the stress response; the individual attempts to counterbalance the negative emotions of job loss with the temporary high of buying something new.

Self-Sabotage at Job Interviews: Consider the case of self-sabotaging during an interview for a fantastic job. Despite being an incredible opportunity, the individual's nervous system interprets the high stakes as a threat, triggering a response that may lead to anxiety-driven mistakes. This is an example of the body mistaking opportunity-induced stress for danger.

Each of these scenarios highlights the critical importance of recognizing and understanding our body's signals in financial decision-making. While our physiological response aims to prepare us for immediate action,

Strategies to rewire your nervous system for good!

To navigate these moments effectively, consider adopting these strategies:

Budgeting: Instead of extreme measures, adopt a balanced debt repayment and savings approach. Our secret sauce to living your life, getting out of debt, and building wealth. This prevents the cycle of getting back into debt due to insufficient living funds.

Adopting a Mindfulness Practice: After experiencing a job loss, breakup, or similar stressor, step back before making any financial decisions. Suze Orman has a great rule: if you’ve experienced a recent death or divorce, do not make any big financial decisions for a year. Allow yourself T.I.M.E to process the emotions without letting them drive impulsive purchases.

Preparation and Practice for Opportunities: When facing positive yet high-stress opportunities, like job interviews, prepare thoroughly. Practice stress-reduction techniques to keep your nervous response in check and ensure you present your best self.

One of my favorite techniques for rewiring my nervous system is the Ho'oponopono prayer. Grab a piece of paper. Write out all your feelings, and then on the other side of the paper write out, “I’m sorry. Please forgive me. Thank you. I love you."

You can also try Tapping. Brad Yates is my favorite.

And my final favorite technique is looking at my budget. It grounds me. It helps me see what I value because where I spend my money is on what I value, AND it shows me how far away I am from achieving my goals.

By understanding and managing these physiological responses, you can make more informed, balanced financial decisions that align with your long-term goals and well-being. As you transform your relationship with money, understanding and managing your body’s chemical responses is key to making empowered financial choices. Recognize that it's normal for your nervous system to react to both similarly. The key is identifying the reaction and not letting it dictate your decisions. 

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