"Money never made a man happy and never will. There is nothing in his nature that can produce happiness.
The more a man has, the more he wants. Instead of filling a vacuum, it creates one.
If it satisfies one desire, it doubles or triples that desire in another way".
Benjamin Franklin
MacLean's triune model of the brain allows us to consider separately three areas of people's psychological life that make it very easy to learn and internalise: a rational, an emotional and an impulsive instance. How can we apply these three areas to our personal economy? I suggest an exercise.
Before we begin, it is important to understand that there is no right answer: what comes out is neither good nor bad. Consciousness is the ability to recognise and perceive reality; being conscious is the path that opens the door to knowing who you are and from there to access true transformation. Only when we know how we are, what conditions us and what moves us, will we be able to take actions that will lead us to change what we are not comfortable with.
Awareness versus IgnoranceThe first is to recognise reality and reflect on it versus having false and limiting beliefs and not questioning them. It's not that we don't know, it's that we know wrong. Observe your results and question your thoughts. Only from there will you be able to reinvent and manage yourself.
I recommend taking pen and paper or better an Excel sheet on the computer. It is not enough just to think about it: seeing something in writing and getting it out of one's head is therapeutic because ideas are ordered and "intrusive" thoughts are reduced. When writing, the mind does not work alone: by staying in the thought, the mind can go aimlessly tangling ideas, but by putting it "black on white", those thoughts are better structured.
According to MacLean, the first brain to develop was the reptilian brain, the primitive brain that has ensured our survival over millions of years. That is why it is good to first reflect on this brain. To start being LIBR€$ we have to be aware of what we really need to survive, those expenses that we have to incur if we have to: differentiate between what I need and what I want, necessity and luxury.
- WHAT YOU NEED: to activate the reptilian brainTake all your expenses and sort them by items. Mark the ones that are strictly necessary and compare what you pay for them. basic needs with what you could afford if you were just surviving: be very critical and objective with those expenses that you cannot eliminate today for anything in the world. For example: how much you pay for the house you rent or mortgage versus a smaller house, in another neighbourhood or without common areas; or the car you have versus one that only gives you a lift, even public transport plus rent when you go travelling; also analyse the brands and quantity of food you buy.
Of course you don't need more clothes, cinemas, restaurants or private health insurance: we are talking about pure survival. Be very honest and objective: it is important to be demanding in this exercise. It is not about living like this: I suggest doing the analysis to look at the financial situation objectively and then go to the next step. How much do you really need to live on?
- HOW YOU LIVE: Once you have a list of basic expenses on which you could survive (just survive), compare these expenses with what you actually have. Write next to each item how much you are actually paying. And when you have it, also add the expenses you incur outside of survival and their amount: clothes, restaurants, cinema, leisure, travel, books... This second phase awakens the emotional brainthose items that help us to feel more, that give us pleasure, that provide us with non-basic needs, that allow us to live better.
- WHY YOU SPEND: As explained above, the sequence that leads to success is to think, feel and act. Putting the rational brain with expenses, it helps to control them, to understand them, to accept them and to take action if you want or need to do so. So finally I suggest that you analyse why the differences between basic expenses and what you are actually spending and the items of pleasure. Analyse what drives you to these amounts: ask yourself why you are spending these amounts and write them down. "Because I like to live close to my children's school, because I need an expensive car that runs fast to enjoy the weekend, because going to a restaurant relaxes me by not having to clean the kitchen, because I need clothes to look better, etc. etc.".
I repeat: it is not about criticising or judging yourself. The important thing is to be aware and understand what is happening in order to act. You may be surprised: you may be under-spending or over-saving in some areas.
Most of us have a not inconsiderable income and lifestyle.We have a roof over our heads, money for leisure, mobiles and computers... But even so, we feel we are not living the life we want. It's not bad luck, nor have the planets aligned against you: money is probably escaping you through a black hole that you need to know about. Only when you see it, you will solve it. And it's all about understanding the way you handle and manage your money. Analyse what you think and why, think about what makes you treat and relate to money the way you do.
By simply doing this exercise that follows MacLean's triune brain sequence, we can start to become aware of which brain is preferential in our relationship with money, what happens to our finances and how to improve them. Just like when you go on a diet or study for a degree, having a healthy finances does not happen overnight: it is a constant and patient work. If you start today to understand why what is happening is happening, you will be able to take action to resolve the situation: don't delay any longer.
Next Week: It all makes sense with the fourth brain.
Rocío Ledesma del Fresno
Summa Cum Laude graduate in Business Administration and Management with a Minor in Economics from The American University of Paris, as well as a Master in Finance from ICADE. She recently completed a Master in Emotional Intelligence at the Hune Institute.
For 25 years she was Director of the Innovation and Product Departments at Banif and Andbank. She is currently Manager at Dextra Corporate Advisorsindependent boutique of M&A and corporate, and director of Navis Capital Desarrollo, SGEIC, an alternative investment fund manager registered with the CNMV. She is also a member of the association WA4STEAMan international community of women business angels seeking to expand the female presence in STEAM fields by providing not only capital, but also by becoming a strategic partner for future leaders.