Financial Comfort Zone
Picture the neighborhood you lived in the longest. You probably got to know it pretty well. You knew where to get groceries. You knew the quickest way to get to the hospital emergency room. You knew the friendly neighbors and the not-so-friendly ones. You knew where the closest hardware store was. Drug store. Coffee shop. Playground. Drycleaners. You knew your neighborhood. You felt comfortable there. You felt safe there. You belonged there.
A financial comfort zone works the same way. It’s the financial neighborhood that makes you feel safest and most at home. We often find ourselves in a particular financial comfort zone as a consequence of our birth and family-of-origin. We didn’t choose it originally, but many of us never realize how much a part of us it becomes. We can leave—but even if we do, the original boundaries we learned are very strong.
Those boundaries may be arbitrary and drawn by others, but we soon learn to live within them anyway. Just as you learned not to throw a ball into the cranky neighbor’s yard, these financial boundaries set the parameters for where it’s acceptable for you to go and what it is acceptable for you to do with your money. They become second nature to us. They define our reality. Because they are automatic and lie outside our awareness, these financial boundaries, when unexamined, become glass ceilings and floors.
Each financial neighborhood has its own set of values and mores. It has its own answers for questions like: What is the financial role of fathers and mothers? When if ever is it acceptable to take on debt? What is the best way to use my money? What are we supposed to put up with to meet our financial obligations to others (for instance, working at a job you don’t really like much)? How acceptable is it to flaunt how much I have, and what I spend it on?
Your financial comfort zone also dictates how “poor” and “rich” are defined (as we’ll see in a minute, these in fact are highly relative terms), and at what point you move from one position to the other. We know of one young lady from an upscale neighborhood who was planning her wedding. Her parents told her that they would give her a certain amount of money for her wedding, setting a limit to what they would be willing to contribute. Shocked, the young woman said, “A budget? Mother, that’s what poor people do!” Point is, the wealthy and the poor think very differently, and without a significant shift in thinking, it is difficult to move from one group to the other.
Our goal is to teach you to stretch your own financial comfort zone. We want to help you think and behave differently, so you can become comfortable at any financial level, and develop the mental and emotional framework you need to reach and maintain the financial level you aspire to.
This flexibility is something that has to be consciously learned. Without awareness, new knowledge, and skills, it’s hard to overcome the pull of our upbringing. As long as your financial status is compatible with your financial comfort zone, you’ll feel as if everything is fine. The problems begin when your income level or standard of living significantly increases or decreases, or when that comfort zone limits your potential success.
When your circumstances bring you beyond the top boundary of your financial comfort zone, you will begin to feel unsettled or anxious. You probably won’t even be aware of that anxiety or the reasons for it. After all, more money should be a good thing, right? It’s having less money that should be stressful, right? Wrong. In our work, we have found that feeling stress about having more money is just as common, if not more so, as feeling stress about having less. For example, all other things being equal, people with 401(k)s have been much more anxious about the stock market decline then those without. In many ways, the more we have the more we have to worry about. True, stress sometimes comes from having less money, but also from the feelings that arise when you find yourself in an unfamiliar financial place, away from your herd. Under unfamiliar circumstances, the alarm in the animal brain sounds a danger alert and your unconscious mind will attempt to pull you back to familiar ground. For your animal brain, it is an issue of life or death.
This is why we experience such stress any time we face a change in our financial status. And if we aren’t conscious of this financial comfort zone and what we are experiencing, we’ll begin to behave in unconscious ways that will move us back into our comfort zone. We’ll, without awareness, do what we have to do to restore our sense of equilibrium and comfort, even when that is to our financial detriment. We’ll make automatic, often totally unconscious money decisions that are designed to reduce our exposure to that uncomfortable top boundary and pull us back into safer, more familiar confines.
After all, moving above that boundary might require a move to a different neighborhood, where we may not know the rules or speak the same language. Where we might feel judged, unsafe, isolated, like we don’t belong, or like we might be misunderstood or “evicted.”
