Why We Can’t Fix Money Problems (and What to do About It)

Why is finance so scary for solopreneurs? And what can those of us who care about entrepreneurs do to make it less of a stumbling block?

I think it starts by understanding what we’re up against.

Debunking the money myth

Like Sasquatch or Florida’s Skunk Ape—Homo economicus— thrives only in legend (and economic models).

According to its Wikipedia entry:

The term homo economicus, or economic man, is the portrayal of humans as agents who are consistently rational, narrowly self-interested, and who pursue their subjectively-defined ends optimally.

But as the Great Recession of 2007 proved, that is NOT how Homo sapiens roll.

More often than not, we are highly emotional, endlessly irrational and quite capable of making money decisions that defy logic and betray tidy notions of humans as virtuous maximizers of gain. In our minds, money isn’t just a handy tool or useful abstraction. In the reptilian recesses of our brains, it triggers ancient fears and memories, which render us incapable of using our executive functions properly.

In other words, when it comes to money, we don’t hear Beethoven’s Ode to Joy, we hear John Williams’ theme music from Jaws!

Problem-solving skills don’t work

And this is why problem-solving methodologies and well-tested financial tools (like budgets and business plans) too often go to waste. We don’t really have a money problem, we have a deeply-entrenched human complication. Like with an iceberg, we only see the tip while a massive part of the story lies beneath the surface. Such deep-rooted human issues aren’t problems so they can’t be solved! They’re not a bug in the code to be found and deleted, they’re an actual feature of the hardware!

Deploying the rational, problem-solving frameworks we were taught in school is no match for the deeply-ingrained, automatic patterns of thoughts that we’re trying to disrupt. We can whip out the calculators and spreadsheets and teach entrepreneurs how to use them to our heart’s content but the money “problem” remains entrenched.

So how do we proceed?

Teach them how to accept and commit

That was the message I recently delivered to a group of business owners in Opa-locka, Florida. I was the opening presenter in the remarkable Aim Your Numbers 4-week training program sponsored by Branches and the Opa-locka Community Development Corporation (OLCDC).

Participants in the program were there to learn the tools and methodologies for taking charge of their finances and I thought that the best way for me to serve them was by putting their challenge in its proper perspective and giving them a way to move forward, towards new possibilities.

That’s all we can do when problem-solving fails—pivot towards possibility.

Instead of fighting our innermost thoughts and feelings; instead of avoiding our fears and the cacophonous banter of our inner saboteur(s), we must learn to tune-in and listen; to observe, acknowledge, seek to understand, and to hold these negative thoughts and feelings only lightly, so as to avoid getting hijacked by them.

This practice of neutral observation creates a gap—a space—where a new possibility can take hold. And that space can be expanded to create an entirely new future by replacing disempowering behaviors with more useful ones.

According to Dr. Steven C. Hayes, founder of Acceptance Commitment Therapy (ACT), there are 6 pivots that result in the psychological flexibility needed to create new creative possibilities in your life, involving money or other important dimensions of living.

It’s all invented

ACT is powerful stuff.

Take it from a guy who has searched far and wide for a panacea to our money problems, only to find that there is no such thing as a magic solution. There isn’t even a money problem! There’s no problem at all in fact and nothing to solve.

We don’t need to be fixed.

We don’t need to work our faces off to thrive.

We don’t need to pretend like we’re not sometimes scared about paying the bills.

We don’t have to go to war with ourselves trying to shut up the inner voices telling us that we’re not up to the task.

As Rosamund and Benjamin Zander wrote in their marvelous book, The Art of Possibility:

It’s all invented.

We can choose to pivot to a money story that better serves us.

And then we can get to work.