Know Yourself, Know Your Money: Discover WHY you handle money the way you do, and WHAT to do about it! by Rachel Cruze is a personal finance book published in 2021.
In the game of life, you can’t opt out of financial matters, whether you try to ignore them or not. Therefore, it’s imperative that you opt in as soon as possible. To succeed, you have to be committed, like with running. Will you be passive or proactive?
Rachel Cruze describes how understanding your financial tendencies (often shaped in childhood) can guide you to better financial decisions and healthier communication with significant others, families, and friends. I have found that Cruze’s ideas apply not only to money matters but also to tendencies & mistakes in general.
Purchase the book by clicking this link!
Enjoy!
Table of Contents
Your Childhood Money Classroom
“Childhood either enables you or stunts you; it doesn’t create you.”
Rachel Cruze
- We all have different childhood experiences (not inherently better or worse)
- Siblings can even grow up with completely different beliefs
- Childhood experiences subconsciously influence our mindsets in adulthood
- Ways Children Learn:
- Emotionally (Stressful vs. Calm)
- Verbally (Open vs. Closed)
- 4 Types of Environments:
- Unstable: Open & Stressed
- Anxious: Closed & Stressed
- Secure: Open & Calm
- Unaware: Closed & Calm
Stressed Money Classrooms
- Unstable — Open & Stressed
- Constant fighting & yelling, open communication but negative
- Biggest Challenges Later in Life:
- Expectation of conflict and correlating fear
- Tendency to ignore money matters
- Anxious — Closed & Stressed
- Observed parents’ habits, but rarely heard discussions about money
- Felt tension instead of direct arguments
- Might have felt discouraged from asking questions
- Biggest Challenges Later in Life:
- Difficulty opening up about money
- Fear regarding lack of money
Calm Money Classrooms
- Secure — Open & Calm
- Open discussions about money, everyone on the same page
- Not necessarily financially strong, but making intentional decisions
- Biggest Challenges Later in Life:
- Underestimating the effort and responsibility it takes
- Feeling entitled, leading to unrealistic expectations
- Unaware — Closed & Calm
- Never knew specifics about family finances but felt taken care of
- Short-term emotionally great, long-term lack of understanding
- Biggest Challenges Later in Life:
- Struggling with responsibility
- Behaving irresponsibly, due to lack of understanding
- Avoiding finances altogether due to discomfort
Your Unique Money Tendencies
- 7 Most Common:
- Saver vs Spender
- Nerd vs Free Spirit
- Experiences vs Things
- Quality vs Quantity
- Safety vs Status
- Abundance vs Scarcity
- Planned Giving vs Spontaneous Giving
- Find a balance
- Ex → If you save everything, you’ll miss experiences
- Ex → If you spend everything, you’ll be broke
- Current needs can distort what you would naturally do, think about what’s instinctive
- Knowing you & your partner’s money tendencies helps you both understand and communicate
The Best Way To Respond When Mistakes Happen
- Too Much Grace → Enabling
- Enables self-destructive habits by avoiding consequences
- No boundaries, rarely taking a stand
- Solution: Recognize the issue, set boundaries, and stick to them
- Nothing Outside the Rules → Legalism
- Efficiency prioritized over relationships
- Sacrificing relationships to be right
- Solution: Remind yourself that mistakes are normal and okay
Check out more Business / Finance posts!
- The Opposite of Spoiled by Ron Lieber
- The Elements of Investing by Burton Malkiel & Charles Ellis
- Know Yourself Know Your Money by Rachel Cruze
- Small Giants by Bo Burlingham
- A Random Walk Down Wall Street by Burton Malkiel
- Your Money Or Your Life by Vicki Robin
- Cashflow Quadrant by Robert Kiyosaki
- Financial Freedom by Grant Sabatier
- Retire Before Mom And Dad by Rob Berger
- The E-Myth Revisited by Michael E. Gerber
- The Richest Man in Babylon by George Clason
- The Dumb Things Smart People Do With Their Money by Jill Schlesinger