One of our clients just bought a Prius and her husband said, “Oh no, you’re not going to be like one of those drivers.”

I asked her what makes Prius drivers so frustrating to follow. She described how they often are looking at the car’s dashboard screen trying to maximize mileage by minimizing engine use in favor of battery use.

Ah, maybe bad drivers don’t choose Priuses? Maybe reasonable drivers simply become distracted? Or does that Prius computer cause good drivers to drive poorly?

We often get confused between correlation, how things relate to each other; causation, how one thing triggers another, and coincidence, unrelated events that are incorrectly linked. For example, when a stock drops because of surprisingly bad earnings, we can say that those earnings caused the stock to fall. When worldwide stock markets move in tandem, they are correlated. And when markets go up when an NFC team wins the Super Bowl, that is coincidence.

We are always creating explanations for why things are happening, and they are seldom correct. Parents who come from little means and become financially successful are frustrated that they haven’t taught their children the value of a dollar. But they may have only partly caused their offspring’s avariciousness. A generally richer society — more televisions, bigger homes, computers — influences people’s spending. Your neighbor’s new car makes you unhappy with your own. More affluence in general correlates to more spending, but it doesn’t necessarily cause it.

So how can you create a linkage between values and behavior?

Write things down. If you have run into someone with those wearable activity trackers, you know that they can tell you to the step how much they walked yesterday and how many hours of deep sleep they got. While eye rolling at a breakfast partners’ walking count, I realized that these things work! Counting steps causes creation of steps. It’s the same with money. Writing down how you are spending your money will cause you to spend less (or more if you are too restrictive). Carrying a notebook or using a program like will help you track how you spend and therefore create an awareness that causes either activity or restraint, depending on where you place your attention.

Review what you have written. Looking over your spending notebook results in judgments about your spending that unobserved would go unabated. As you review how you spent your money, you can modify behavior to assure that dollars are directed toward the things that are meaningful. Show me your checkbook and I’ll show you your values is only true when you are tracking and paying attention to how you are spending.

Talk about it. Most family money problems are about the secrets we keep. These secrets are generational. Our parents didn’t talk about money so we created our own money stories. These narratives are generally not flattering. My daughter recently called me “generous stingy.” She said that I happily spend money on things that matter to me and pass judgment on the things that I don’t care about. I realized how little our daughters actually want and how my response to reasonable requests for things that I didn’t feel to be important was somewhat shaming. My money issues were going to turn into theirs if they did not bring this up. And sadly, I didn’t think of myself as having money issues. After all, I am a professional! If you are not talking with your family about money, you are still communicating to them. The problem is that their interpretation of what you are “saying” may not match your own.

Don’t think about it. As you can tell, I tend to be a fan of observing one’s own behavior, but there are several places where acting automatically is your best option. For example, investing in your 401(k) and establishing automatic rebalancing in the plan ensures that you are preparing for your future. If the company has an option to automatically increase your contribution as you get raises, you can end up saving more relatively painlessly. We paid for our daughters’ college with tax-free growth on investments through systematically saving into a 529 plan. We invested in all stocks until they were a couple of years away from college and then started getting more conservative as college approached. The monthly withdrawals were part of our regular budget.

Think about it. Taking the time to connect with how you are feeling about your spending will help you allocate your resources more intentionally and more enjoyably. We may feel so busy that we don’t have time to cook, yet eating out every night is expensive and diminishes the experience. Setting aside an afternoon to make meals for the week will not only save you money, but it will help you enjoy the special nights out. And pay attention. We recently found a litter of bunnies in a hedge by our house. Every day before dinner our adult daughters would check on the rabbits. This simple discovery created several days of free enjoyment.

Having more money can correlate to more happiness. Not having to worry as much about day-to-day living certainly makes one more comfortable. But having more money doesn’t cause us to be happy. I know many very unhappy people with more money than most of us could imagine. It is not a coincidence that those who spend the most time focused on money tend to derive the least satisfaction from having it.


Ross Levin is the founding principal of Accredited Investors Inc. in Edina. His Gains & Losses column appears twice monthly. His e-mail is