{"id":252,"date":"2024-01-22T14:00:00","date_gmt":"2024-01-22T14:00:00","guid":{"rendered":"https:\/\/moneywithkatie.com\/identity-economics\/"},"modified":"2025-09-03T18:52:39","modified_gmt":"2025-09-03T18:52:39","slug":"identity-economics","status":"publish","type":"essays","link":"https:\/\/moneywithkatie.com\/essays\/identity-economics\/","title":{"rendered":"Identity Economics"},"content":{"rendered":"
\n

The moment a crisp $20 hit my palm growing up, I took it as a cue to coerce a friend\u2019s older sister to chauffeur me to the mall so I could raid the disheveled sale rack at Hollister. I was a spender, not a saver, and my frugal parents were nervous<\/em>. Their \u201cwaste not, want not\u201d mentality seemed to skip a generation, as my<\/em> mantra was, \u201cwaste freely, want everything.\u201d <\/p>\n

Even in my early twenties, I was pretty unrecognizable from the person I am today (and not just because I was still \u201cinvesting\u201d thousands of dollars per year into my appearance). I spent money like it was an endless resource\u2014because as far as I knew, it was. It came every two weeks! Why do I need to preserve <\/em>this week\u2019s paycheck?<\/em>, my actions seemed to suggest, as I wielded my credit card like Wonka\u2019s golden ticket for every bottomless brunch and poly-blend going-out top in a five-mile radius.<\/p>\n

I was basically a college kid performing \u201cworking adult\u201d drag, and I approached my career like I had school\u2014determined to get a good grade, but not all that invested in the work itself.<\/p>\n

So when I had my financial awakening\u2014horrified to realize that in order for that money to keep<\/em> coming every two weeks, I\u2019d have to exchange 40 hours per week for the rest of my life<\/em>\u2014it wasn\u2019t just my spending habits or asset allocation that needed to change. It was my identity. <\/strong><\/p>\n

A few things had been true about me previously:<\/p>\n

    \n
  1. \n

    I was a spender, and very materially motivated (i.e., it was the stuff money could buy, rather than the autonomy it could provide, that excited me\u2014I would\u2019ve taken my paychecks in the currency of Louis Vuitton bags had the payroll department permitted it).<\/p>\n<\/li>\n

  2. \n

    I mostly checked out during the week and lived for the weekends\u2014careening around town with friends was my raison d’etre.<\/em><\/p>\n<\/li>\n

  3. \n

    I lived under the jurisdiction of trends and fads, voluntarily handcuffing myself to the hamster wheel.<\/p>\n<\/li>\n<\/ol>\n

    \u201cBudgeting\u201d is probably a generous label for my previous half-assed attempts at getting it under control. I was going through the motions, but missing a key component: desire. <\/p>\n

    To become good with money, I realized I needed to become <\/em>someone<\/strong> <\/em>good with money. And that person had to live by a radically different set of values:<\/p>\n

      \n
    1. \n

      Be financially motivated (i.e., be excited by the value of the money in the accounts rising, rather than the \u2018stuff\u2019 it can immediately buy).<\/p>\n<\/li>\n

    2. \n

      Find purpose in work. Or, at the very least, adopt less expensive hobbies (and preferably, some that earn\u2014rather than incinerate\u2014money).<\/p>\n<\/li>\n

    3. \n

      Prioritize freedom above all else, especially the opinions and perceptions of others. <\/p>\n<\/li>\n<\/ol>\n

      Financial freedom was a magnet that pulled me forward. So I stopped shopping. I stopped getting my nails done. I stopped going out on Thursdays. I got a second job, and then a third. (As you know if you read a lot of my work, some of this was a bit of an overcorrection that I\u2019m still<\/em> in the process of unwinding.)<\/p>\n

      I started doing things that \u201csavers\u201d did. I started working in a way that people with purpose worked, experimenting in different industries on the side. And eventually, I started to feel it: I really was<\/em> motivated by watching the number in my account go up (not just what that number could buy today).<\/p>\n

      As luck would have it, forming an identity around money savviness generates a fabulous, self-reinforcing side effect: Before long, I was staring at tens of thousands, and then hundreds of thousands, in my net worth spreadsheet. (It helped that this rebirth occurred during a roaring bull market.)<\/p>\n

      I evolved from someone who spent money before the ACH transfer had even cleared to a woman who most looked forward to increasing her savings rate by a few percentage points so she could jack up her automatic transfer to the brokerage account. I Reverse-Uno\u2019d my old self and became someone else. <\/strong><\/p>\n<\/div>\n

      \n
      \n

      Before the year 1968, nobody really knew what Earth looked like. We had hunches; we knew it was round and floated in space, but we didn\u2019t really<\/em> have a mental image for our planet. Then, in 1968, the astronauts on Apollo 8 snapped an iconic picture on their mission to the moon that came to be known as \u201cEarthrise<\/span><\/a>.\u201d It showed our precious glowing marble: blue, green, and misty, suspended in the sky. Shiny and resplendent. <\/p>\n

      And suddenly, we understood. In the 10 years that followed, nearly every piece of climate legislation that exists today was passed. Once we could see<\/em> this gift we had, it suddenly felt real enough to compel action. <\/p>\n

      To make a meaningful identity change, I learned, you must first have a clear vision for the person you want to become. Then, you have to feel so desirous and magnetized toward that vision, that it acts as a counterweight to the gravitational pull of your current self and circumstances. <\/p>\n

      To be clear: You don\u2019t have to change your entire identity to become good with money, but you do<\/em> have to change the part that\u2019s blocking you from making progress (whether that be the part that overspends, or undervalues your work, or can\u2019t envision a future worth saving for).<\/p>\n

      Maybe it feels like education is the only thing you\u2019re missing\u2014and consequently, the belief that you \u201cdon\u2019t know what you\u2019re doing\u201d or that \u201cmoney is too complicated\u201d is the block. But for some of us, it runs deeper than being ignorant to Roth IRA contribution limits or underestimating compound interest. <\/p>\n

      This also explains why the carrot will always be more valuable than the stick. The carrot creates desire, the ingredient you really need; the stick can only scare. Historically, the field of \u201cpersonal finance advice\u201d has carried around a stick, which is why so many people still need financial help despite there being no shortage of free information available. <\/p>\n

      Sometimes, reverse-engineering it is your best bet: Imagine what it feels like to be this person. Then, start to do the things that person would do, so you literally<\/em> see <\/em>yourself <\/em>being them. <\/em><\/p>\n

      Before long, you\u2019ll realize that the person you\u2019ve been envisioning is just who you are now\u2014and being good with money is just what you do. <\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

      The moment a crisp $20 hit my palm growing up, I took it as a cue to coerce a friend\u2019s older sister to chauffeur me to the mall so I could raid the disheveled sale rack at Hollister. I was a spender, not a saver, and my frugal parents were nervous. Their \u201cwaste not, want […]<\/p>\n","protected":false},"featured_media":2498,"template":"","meta":[],"categories":[52],"tags":[],"class_list":["post-252","essays","type-essays","status-publish","has-post-thumbnail","hentry","category-money-psychology"],"yoast_head":"\nIdentity Economics - Money with Katie<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/moneywithkatie.com\/essays\/identity-economics\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Identity Economics - Money with Katie\" \/>\n<meta property=\"og:description\" content=\"The moment a crisp $20 hit my palm growing up, I took it as a cue to coerce a friend\u2019s older sister to chauffeur me to the mall so I could raid the disheveled sale rack at Hollister. I was a spender, not a saver, and my frugal parents were nervous. 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