Know Yourself, Know Your Money summary

Another of Cruze’s friends once told her about his childhood.

As a young boy, he went grocery shopping with his mother. She always bought day-old bread. He never gave that any thought until he went to the store with his friend’s mom one day. She took her bread from a different shelf after carefully inspecting each loaf. He wondered what she was doing. She told him that she was selecting the freshest loaf.

As we’ve just seen, some households are silent when it comes to money. Others are loud.

But that’s not always a good thing. Talking honestly about financial matters can be instructive. But constant fighting can damage a child’s relationship with money.

Anxious and unstable classrooms are all about the absence of money, but growing up with enough money – or at least the idea that there’s enough money – can also be an issue.

Which leads us to the unaware classroom. If you grew up in this classroom, there’s a good chance you never worried about money as a kid. In fact, you probably never even gave it a thought. Money just wasn’t on your radar, which isn’t surprising given that your parents never seemed to talk or worry about it either.

Fear is the body’s way of telling us that we’re in danger, and it’s a universal human emotion.

When you’re scared, your brain releases hormones which sharpen your perception and allow you to respond to threats. This biochemical reaction is at the heart of the fight-or-flight response.

One of Cruze’s friends once owed $40,000. Elizabeth was a school teacher earning a modest salary and she made regular payments, but just couldn’t get on top of her debt. And it was actually growing thanks to the interest. Desperate to dig herself out of this hole, Elizabeth turned to Cruze.

Cruze’s advice? In a nutshell, earn more. Elizabeth started looking for odd jobs to supplement what she earned teaching. She walked dogs, babysat, worked weekend shifts in a local bakery, and looked after people’s houses when they went on vacation. It worked: with her extra income, Elizabeth managed to get out of debt.

In 2019, the New York Times interviewed newlyweds about their honeymoons. The paper wanted to know why so many people have bad experiences.

One couple who broke the bank for a trip to the idyllic Caribbean island of Aruba provided an answer.

Mistakes with money are inevitable and we all make them. But not all mistakes are alike. 

Some bad decisions damage your financial health – like using your credit card to book a vacation you can’t afford, or buying a new car that’s out of your budget.

Saving often feels like a sacrifice. After all, putting money aside for the future means that you’re limiting your options in the present.

But that’s the wrong way to think about it. Saving isn’t actually a burden – it’s a source of joy. If it doesn’t feel that way, you might just have forgotten the connection between saving and dreaming.