Scrooge and Financial Change

Submitted by Rick Kahler on Monday, December 22, 2014 - 3:00pm
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Ebenezer Scrooge, the infamous miser of yuletide lore, can teach us a lot about money – specifically how to change our views on how we deal with it.

For me, the Christmas season doesn’t seem complete without Charles Dickens’s A Christmas Carol. This tale is captivating, as it chronicles the transformation of the cold-hearted and calculating Scrooge, the seemingly inherent goodness of Bob Cratchit and the haunting visits of the Ghosts of Christmas.

As a student of Dickens’ fable, I’ve been amazed at the wisdom and universal truths contained in that seemingly simple story. I have discovered that Scrooge isn’t merely the villain he’s often made out to be, nor is Cratchit the straightforward hero.

The average person often has a stressful, even adversarial, relationship with money, especially since half of Americans have less than $25,000 in savings or investments and live month to month. Stress over money is especially exacerbated during the Christmas season each year. Many Americans borrow heavily on credit cards for gifts and end up stressing for months afterward trying to pay the bill.

How ironic that what Dickens unveils in the short A Christmas Carol is a powerful process for financial transformation (or any desired transformation). Dickens gives us a four-step process that anyone can employ to change destructive financial behaviors.

A few years ago I co-authored a book, The Financial Wisdom of Ebenezer Scrooge, that highlights the subtle intelligence of Dickens’s story as it pertains to transforming one’s behavior around finances. The story became the heart of a successful model that financial planners and therapists employ to help transform a person’s relationship with money.

The first big event in the story is the visit of the ghost of Scrooge’s old business partner, Jacob Marley. Scrooge takes to heart Marley’s warning to change his ways: The old miser opens himself to improving. Psychologists call this an intervention.

The first and most important step toward transformation is a personal realization that something is amiss with your behavior and it’s you who wants to change. That’s as opposed to someone else insisting you ought to change. Meaningful and sustainable change comes only from within, not without. Blaming personal financial problems on family, employers, the wealthy or the government just keeps you stuck in delusion.

What is the key to developing an internal desire to change? Addiction recovery programs call this “hitting bottom.” I describe it as reaching a state of openness to accept facts and circumstances as they are, not as you wish they were. It is becoming convinced that change is crucial and that you are passionately ready to take action.

On that Christmas Eve, inexplicably, Scrooge was finally ready to consider the message his old friend Marley had delivered to him on many Christmas Eves previously. In the book Changing for Good, psychologist James O. Prochaska and his co-authors describe this as moving from the stage of pre-contemplation to contemplation. Scrooge was willing to consider that his firmly entrenched worldview might be skewed and to consider seeing things for what they were, not as he assumed they were.

We may not be misers like Scrooge, but when it comes to our beliefs around money, we have as many delusions as he did. A few of the more popular of these beliefs, or money scripts, are: “More money is the answer,” “The stock market is a gamble,” “I work hard so I deserve to spend money” and, “If I work hard I will make money.”

Becoming willing to consider change is half the battle to free ourselves from destructive financial behavior based on these delusions. But it is only half. In the next article, we will look at three additional steps to transformation.

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Rick Kahler, CFP, is president of Kahler Financial Group in Rapid City, S.D.

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