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Money and Magical Thinking

Magical thinking may be sabotaging your ability to create wealth. One of my favorite reruns is Night Shift (1982). I love this crazy movie because Michael Keaton’s character, Billy Blaze, is the poster-child for magical thinking.

If you recall the energy and enthusiasm of this zany character, you may remember that he is bursting with hair-brained, get-rich-quick schemes that basically never materialize. While Billy’s character is entertaining, the movie also points to the perils of magical thinking.

What is Magical Thinking?

Magical thinking is a childlike perspective on life. It’s not a wrong perspective, but such thinking can represent an inability to face reality. Magical thinking can be particularly destructive if it’s keeping you from responsibly earning or handling your finances.

Here are a few questions that might help you discover if you’re engaging in magical thinking with respect to money:

  • Are you hoping that external resources will somehow materialize to solve your financial situation? (By external, I mean any resources outside your own capacity to earn, e.g., the lottery, gambling of any kind, an unexpected inheritance, a get-rich-quick scheme).
  • Do you spend time fantasizing about how your life will magically change when this windfall occurs?
  • Do you find yourself spending money you don’t have on things you don’t need?
  • When you are frivolous with your money, do you pretend the money for the necessities of life will somehow appear? Things will somehow work out?
  • When you find yourself financially strapped, do you have a tendency to blame others?
  • Do you have difficulty saving or working toward specific goals?
  • Do you find yourself wishing that “when your ship”comes in, you, too, will have the house, car, boat that others have?

If you've answered yes to any of these questions, don’t despair. You’re not a bad person. You just may be someone who has a childlike perspective on money.

Think of it this way. As children, we really didn’t understand the value of money. You flipped on a switch, and the lights magically appeared. It never occurred to us that someone had to actually pay the light bill.

We didn't have the skills or ability to earn money, manage it, or invest it. Many of us are never taught these important lessons, and we find ourselves stuck in childlike magical thinking about money.

If you’re someone who’d love to break the cycle of magical thinking, here’s a few practical ways you can begin to move a bit closer to a life of prosperity:

1. Internalize Your Options: 

Your financial problems are not going to be solved by some magical entity out there.  Learn to live from an “if it’s to be, it’s up to me”perspective.

Obviously, none of us live and work in a vacuum. We are relational beings who rely on others. You have a better chance of breaking a cycle of magical thinking, however, if you begin to recognize that it’s up to you to change your situation. It’s about taking responsibility for your own outcomes.

If you find yourself fantasizing about external resources that might someday magically appear, stop. Change your thought patterns.

Ask yourself what you personally need to do to change your financial situation? What are the realistic options before you? What do you need to learn to be financially stable? No matter how out of control your life may seem, you have options. They may not always feel like options. Sometimes, we’re required to make hard choices.

I find, however, that when we sit down and spend the time to think through what options and choices we do have, we are better prepared to make things happen.

2. Move Past Blind Optimism to Reality:

What are the facts surrounding your financial situation? Magical thinking is a form of denial. People who engage in this type of thinking seem to avoid the facts. Being optimistic is a good thing, but if you’re operating from blind optimism, meaning you’re ignoring the surrounding facts, you’re bound to get hit by unexpected surprises.

Magical thinkers often fail to understand the value of a dollar or how to value their time in relation to money. If you’re an entrepreneur, this is particularly dangerous.

I encourage you to sit down and make a list of the facts surrounding your situation. Put actual dollar values to these facts. You may even do this with a close friend or family member, someone who knows you well, yet cares enough to give you an honest perspective on your life situation. Someone who can help you see the realities you are facing.

Once you begin to see the patterns of magical thinking and how they relate to the realities of your life, you are then better prepared to take action.

3. Develop an Action Plan:  

Magical thinkers are great at imagining what could happen if only something out there would materialize. They are not, however, very good at creating a plan of action. This is, in part, because they also have difficulty with time.

Often, people who operate from earlier stages of development live in the present moment such that they have difficulty with concrete planning or the prioritization of time.

My recommendation is to force yourself to think ahead in concrete ways. Your plan doesn't have to be cast in stone. What’s more important is that you begin to crystalize a concrete set of action steps that will help you move forward.

For example, if you’re waiting for some yet unrealized inheritance from your Aunt Martha, you might begin to look at your own end-of-life financials via a trusted financial advisor. What do you need to do now to prepare for later?

If you’re an entrepreneur, and you've got a lot of great ideas for your business, put some numbers to those ideas. What will it cost to bring them to fruition? How much can you stand to gain from those ideas? When do you expect to realize those financial gains?

You can break the cycle of magic thinking with respect to money if you just shift to concrete ways of bringing those ideas to reality.

Here’s what I know. Everything that I’m talking about here has to do with your own developmental movement. As adults we continue to grow and change much like children grown and change through the years. However, in order for this movement to occur, we have to want to change and grow. We have to desire higher levels of thought and action. Our transformational change doesn't happen automatically. As I’m often heard to say, “Ya gotta do the work.”

I've given you some steps to take. If you’ll pay attention to your own options, examine the facts of your situation, and make a plan, I think you’ll find new and better ways of creating the financial resources you need.

In the end, Billy Blaze aligned himself with a grounded financially-minded man who helped him bring his ideas to fruition. I like to imagine them taking on more legal business ventures in their movie-time future.

I’d also like to imagine each of us living out a more meaningful, productive, and prosperous life. Now, that’s not magical thinking. It’s a real possibility when and if we decide to embrace transformational change.

Published by Sharon Spano, Ph.D. May 9, 2017