"Who Spends $1,000 on a Necklace?"

“Not me.” 

That was the answer given by a New York woman when she contemplated buying such a necklace while on a trip to Italy. Did she love the necklace? Absolutely. Did she have the money? She did – that wasn’t the problem. The obstacle was that she didn’t see herself as the kind of person who spent $1,000 on a piece of jewelry.

How we see ourselves has a profound effect on how we operate. Some social psychologists define the Self as a process having two parts, the “I” which represents our spontaneous, authentic desires and impulses, and the “Me,” which is how we inhabit and execute the social roles that give our lives meaning. We experience tension between the “Me” and the “I” all the time. For instance, I may feel like kicking up my feet with a glass of wine when I get home from work, but it’s important to me to be a good mother and thus off I go to supervise bath and bedtime routines. (The wine will have to wait until 9:00pm.)

“Me” and “I” tension is common in financial behavior. In the necklace example above the “I” wanted the necklace, and this caused great distress to the “Me.” The woman in the piece even described the event as “an existential crisis” – which it absolutely was. Who are we, if not our feelings, experiences, and actions? When these elements conflict we lose the feeling of having a cohesive self.

In my work with clients I always try to figure out which part seems to be dominant in creating the issue at hand. A tendency to spend too much may be due to an overwhelming impulse to buy coming from the “I,” or it may be because the person believes “someone like me” wears this kind of clothing or eats in this type of restaurant. Once the dominant process is identified I can engage with the client and help them work toward more balanced financial behavior that is also consistent with their sense of self. This makes the change sustainable and more likely to lead to long-term success.

The next time you find yourself having an existential crisis around money, try to tune into the language of your thoughts to see if it’s an “I-Me” conflict. 

The perspective of the “I” is easy to identify, because the thoughts all start with the same subject: I want, I feel, I like, I hate, I dread, I fear… etc. The “Me” thoughts may vary a bit more, but they will sound somewhat like conventional wisdom: It’s important that, It’s reasonable to, One should, Someone like me does, Other people always… etc. (Watch out for “I believe” – it’s a tricky one. Starts with “I” but is really the “Me” in disguise.)

Balancing the “I” process and the “Me” process is a lifelong art and there is no easy formula. People who always go with the “I” live a life of chaos and people who live in the “Me” never get to be themselves. The best way to live a conscious, purposeful life is to take a moment to consider both sides and then remind yourself that this just one choice about a necklace, it’s not the sum total of who you are. You'll get the chance to make another choice tomorrow.