Are Your Roots Showing? . . . (in your finances)

Ed Kerns |

It’s no secret that women’s beauty care is big business. A large area of this market seems almost solely focused on treating hair roots. Some women are trying to show their roots off while others want to cover them. Some want to grow, strengthen and open their roots. Still others want to fix, match or dye the roots of their hair. There are even names like, “hot roots”, to describe when the color of the root is “noticeably - and unintentionally warmer than the rest of your (hair) color.”

Why so much attention to the roots? Your roots are your starting point. They form the base of your look, your style, the health of your hair and how you feel about that look. I think it’s fair to say, that at some point, regardless of whether you’re trying to hide, accentuate or blend your roots, there seems to be no getting around having to deal with them. Interestingly, our “financial roots” are quite similar.

What are your financial roots?  Financial roots are those early experiences you had with money and the underlying beliefs they create in our minds. I’ve had dozens of women share wonderful stories of how a parent, grandparent, or even a sibling positively influenced how they handle money.  Memories like being taught how to save by their dad or grandmother each time they got their allowance or received money as a gift. 

Unfortunately for some, their early money memories are negative.  Overhearing parents argue about money and maybe even seeing the family break up as a result can have a huge impact on one’s financial roots. Watching a parent struggle to make ends meet can lead to an expectation of lack, yet another example how financial roots can fester.  

Apart from our family influence, there are other, more subtle factors affecting our financial roots. Culture, for instance, can have a big influence. Someone who grew up during the Depression will surely have a unique view of money compared to the respective influences of their children and grandchildren.  Factors such as which part of the country you’re from - a small town, a big city, a good neighborhood or a bad one – all play a part.

Much like the roots of your hair, financial roots show up in the financial decisions you make throughout adulthood and can continue through retirement. And just the same, sometimes you want to accentuate and strengthen those roots while other times you want to cover them up or get rid of them.

Here are a few questions to help you begin to sort through the roots of your money beliefs:

  • What was money like for you growing up?
  • Who most influenced how you think about money?
  • What’s important about money to you?

As you reflect on these questions, consider your financial habits. In what areas of your financial life do you feel satisfied or dissatisfied? You might, for example, like to make changes with how you save and spend. You may, on the other hand, be satisfied in your personal finance habits but struggle with feelings of guilt because of your level of success. This discomfort causes you to want to put off important financial discussions with your family and/or your advisor.

The point of exploring your money roots is ultimately to see how and where they’ve been impacting you financially. Are they providing you with the financial life that you want? Keep in mind that it’s not enough just to be a good saver and to stay out of debt, although those are certainly foundational components of good personal finance habits. Money roots grow deep and wide. Apart from influencing day to day cash flow decisions, they also impact how you think and feel about investing for the future.

With longer life expectancies combined with the cost of living tending to rise over time, it’s vital for you to protect and grow your money in such a way that takes this into account. Using conventional investment approaches that may have worked for your parents, like putting more of your money into bonds as you age or chasing after high dividend paying stocks to produce retirement income, are examples of investment beliefs that will likely have to be reconsidered in light of current evidence we now have on how to sustain income over time.

I know there are some home hair colorists out there who think the do-it-yourself approach works just fine for you. But, I’ll bet some of you were the inspiration behind the name “hot roots”.  You tried the at-home method, only to realize you should’ve visited the professional in the first place.

It’s no different when dealing with your financial roots, although it might take just a bit longer to deal with them. I can help. And with a little time and effort, I'm confident you can develop some money roots you’ll be proud to not only show off but to share. Check your roots. Maybe it’s time for a touch up.