Do you know your money demons?

Three that spook you.

Photo by Alessio Zaccaria on Unsplash

Money demons, as defined by Dr. Boyce Watkins, are any fears, anxieties or negative beliefs about money that can undermine and sabotage your financial thinking.

We all have them, whether we know it or not.

Your shopping habit? Chances are good that you’ve carried it for a while. Or maybe you’re the opposite. Maybe you cling tightly to your money out of a scarcity mindset? Both stem from something or perhaps someone.

Acknowledging your money demons is the first step. That can be difficult enough. Appropriately addressing them is another thing completely.

If you’re struggling with money but don’t know why, the following will give you valuable perspective to get you back on sound financial footing.

Watkins introduced me to the phrase money demons during his “Money in the Morning” class on June 2. It was my version of Sunday school.

To make his message more impactful, Watkins invited his wife, Dr. Alicia Watkins, who is a social worker, professor and licensed therapist. She works with families, couples and individuals to overcome trauma and lead healthy lives.

“When it starts to become overwhelming, it’s the consequences that comes with attaching yourself to these financial demons,” Dr. Alicia Watkins said. “It’s an attachment that you have to them. And it’s interesting with financial demons, the more you feed it the bigger it gets.”

Their entire 70-minute conversation is worth your time.

Here are the three psychological barriers Watkins mentioned that become money demons and how they often reveal themselves.

1. Past experiences. If someone ever took advantage of you financially, it probably left you scarred. You may have loaned money to a family member and never been paid back. The loss of money —  and perhaps a loved one — might have produced a traumatic response. Maybe you’ve transformed from a trusting helper into a staunch hoarder who refuses to give handouts. “The demon possesses you now,” Boyce Watkins said.

2. Social pressures. Keeping up with Jones, or trying to be like others, is a well-known concept. Yet many people do it even if they know it’s not smart. “We want to have social approval and respect of others,” Alicia Watkins said. “And unfortunately, we live in a culture where you are respected if you have — not only if you have money. But if you spend it in this elaborate sort of way, you get this social approval and respect.”

3. Ingrained beliefs. Social norms, cultural baggage and generational curses are included in this category. There’s a long list of traits that fit. My addiction to Nike is largely cultural. Millions of parents push children on a daily basis toward college rather than entrepreneurship while leaving their children’s possible mountain of student loan debt as an afterthought. Another popular one: “The stock market is a gamble.”

How money demons reveal themselves:

1. Avoidance of financial responsibility. Boyce Watkins described a man who would love to get married and have children but is afraid he can’t provide for anyone other than himself. Alicia Watkins described the person who refuses to open a bill or check a bank account. “Short term, you feel a relief. But long term, it ends up getting worse,” Alicia Watkins said.

2. Stress. Money demons can result in stress in more ways than you think. There’s stress because you don’t have it, which is most common. But Alicia Watkins also noted how acquiring money can lead to survivor’s guilt. “‘Why am I successful and other people aren’t?’” she said. Fixating on money and comparing yourself to others are also possibilities no matter how much or little money you have.

3. Poor financial decisions. This shows up in numerous ways. Boyce Watkins painted the picture of the consistent poor financial decision-maker. He described that family member or friend who’s always down on their luck. The person who’s always behind on the rent, always in need of a favor, always blaming someone else and always promising the fix for their problem, your money, is just a one-time thing. It’s all trauma that has sabotaged that person’s financial thinking. “You’ve got to understand,” Boyce Watkins said, “that it was their bad financial habits and choices that got them to where they are right now.”