The USA is one of the most prosperous nations in the world, but Americans are having a harder time dealing with their finances every year. The average household credit debt is over $15,000 (for those who are in debt.) We work hard every day just to buy more and more clothes and soon to be obsolete gadgets. Money is one of the top reasons for a divorce because many of us don’t know how to talk about finance with our partners. Even rich folks don’t feel secure about their finances and keep hoarding more and more money. Clearly we have a dysfunctional relationship with money.
Deciphering The Money Code
Joe John Duran’s new book, The Money Code: Improve Your Entire Financial Life Right Now, sets out to change our relationship with money by teaching readers how to:
- Prevent bad decisions about money
- Identify your Money Mind–Fear, Happiness, or Commitment–and how it affects every financial decision you make
- Use a custom checklist to improve your entire financial life
- Clearly discuss decisions about money with the ones you love
- Finally take complete control of your financial life
The Money Code will show you how emotion and bias can influence every one of your financial decisions. Our personal history and experiences stick with us and subtly steer us toward certain default choices. Joe Duran distilled our bias into 3 types – Fear, Happiness, and Commitment. He then helps us figure out which one is our dominant Money Mind.
- Fear – security and protection
- Happiness – personal satisfaction
- Commitment – taking care of others
This exercise is very useful because you’ll recognize your default behavior and will be able to moderate it when it’s time to make big financial decisions. For example, I am dominantly of the Fear Money Mind and I loathe parting with money. It can take me a long time to make a financial decision and sometime the delay can be annoying to those around me. Our furnace and AC broke down last year and I still haven’t fixed it. A big part of it is because it will cost over $4,000 for a whole new system. This broken system is really old and there are no replacement parts anymore. We are doing all right with space heaters because our climate is temperate and we have a kotatsu table, but we should get a new system at some point. My default action on investments is also similar. If I don’t have to, I rarely make a big move in my investment portfolio and I have missed out on some opportunities.
Working together with your partner
Duran also shows us how to deal with other types of Money Mind. This is really important because many couples don’t know how to talk finance with their partners. It can be difficult to see your wife’s point of view when you already have certain ideas in mind, and vice versa. Fortunately, I think Mrs. RB40 also defaults to the Fear Money Mind. We both would rather have cash than spend it. Many other couples are not so lucky (?) and argue much more often.
I do have one criticism. I don’t really like the “Fear” label. It has a negative connotation and I wish the author could have used something else like security or defensive minded instead.
All in all, I enjoyed The Money Code. It is a fast read, but it will keep you thinking long after you finished the book. If you have a dysfunctional relationship with money or you can’t discuss your finances with your partner, then this book can be very helpful. Even if you are doing well, it is helpful to know what your dominant Money Mind is so you can recognize your default behavior and pitfalls. There are also some suggestions on how to improve each Money Mind type’s decision making and that should be useful for everyone.
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About the author:
Joe John Duran is CEO and founding partner of United Capital, which consistently ranks as one of the nation’s fastest growing wealth counseling firms. He’s fueled by his passion to change the industry and improve lives by empowering people to make better, more informed financial decisions. From CNBC to CNN, Joe frequently provides commentary on TV. He has been profiled in numerous publications, including the New York Times and Smart Money.