Once-Bitten, Twice Shy: How Past-Negative People Should Handle Their Money

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Updated on Tuesday, August 5, 2014


Once upon a time, a generation of people grew up to be past-negative individuals. They had a great distrust of the banks, were wary of investing in the stock market and embraced frugal mentalities – their mainstream music even glorified thrift shopping.

We’re not talking about Depression era babies; we’re addressing the millennials who experienced the Great Recession.

The many millennials graduated college and entered a job market, which either fell out from underneath them or made it incredibly difficult to find a job. A substantial percent of the generation struggled with student loan debt; others saw their parents or grandparents lose their retirement funds in the stock market. It’s understandable why the generation tends to be once-bitten, twice shy about money. They are hung up on negative memories and are overly cautious towards the future.

Typically, past-negative people are those who live a life of regret and focus on their unhappy memories instead of enjoying the present. While not all Millennials are past-negative individuals, a frightening portion of the generation are past negative about their finances and prefer to “invest” in cash.

Frugality and thrift shopping may be great financial habits, but an overly cautious approach to money can cause issues in the future.

The Financial Implications of Being Past Negative

Historically, being a past-negative person has been viewed as strictly an unfortunate scenario for a person’s mental wellbeing, but it can actually play a positive role in their financial health.

People who are past negative (or once bitten, twice shy) are less likely to fall into financial trouble because of their overly cautious nature. They evaluate consequences and financially plan for the future, which means they likely always pay their bills on time, may have a retirement account and likely have savings, an emergency fund and budget their spending.

The downside of being once bitten, twice shy is the tendency towards being overly cautious with money.

Past-negative people who have debt are likely managing it well by making on-time payments, but they should still shop it around and look for their best rate possible.

Past-negative people are less likely to succumb to financial issues like bankruptcy, foreclosures or massive debt – but they’re more likely to miss out on returns from investing. The desire to stick with the status-quo and stay within their comfort zone, often makes past-negative people hesitant to invest in the stock market or take any risks with their money. They’d prefer to just tuck money away in a savings account instead of taking a chance on losing money in the stock market.

Sure, this mentality will likely help avoid financial ruin, but it also means missing out on return on investments and making money in the stock market. Money just stored away in a savings account, especially earning only 0.01% interest, won’t be beating inflation. Their money would actually be losing purchasing power.

Year-to-year there may be some dips in the market, but a diversified portfolio will be much better in the long-run than money just stored in a low-interest savings account.

Practical Tips to Harness your Past-Negative Feelings:

1. Switch to save: If you’re stuck in debt, then don’t expect an existing lender to help. You can reach out and shop around elsewhere to find a better deal.

2. Make new memories: It’s important for your mental health (and financial) to enjoy new positive experiences, like a new restaurant, quick trip or a new class. Experiences should trump material possessions.

3. Smooth(er) sailing ahead: Set aside some time to think about investing, and not just throwing money in a savings account. Your employer’s retirement plan probably has someone you can speak to for advice.

4. If you’re going to tuck away money into savings, at least find an account that pays more than 0.01% in interest.

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