Sepia tone of woman reading a book on the beach.

Intro:

The stories we tell to ourselves and each other matter a lot.  I don’t know where I read it, but I remember coming across research that said humans’ thought processes evolved first and foremost to win arguments rather than to understand the world for exactly how it is.  In that sense, our minds are more political than they are scientific.

For this reason, ancient philosophers such as Plato had a healthy sense of scorn for sophists and other rhetorical magicians. They accused sophists of using language tricks and storytelling to deceive people and/or support faulty reasoning.  In their eyes, sophists ultimately distracted people from The Truth.

But I think the sophists were on to something, and a smattering of anecdotal research supports this claim.  Humans have a natural proclivity for stories, which can be exploited to both the benefit and detriment of individuals and large groups of people.

The importance of stories / narrative:

Every culture has defining stories, stories about who we are, what we believe, where we came from, how we got here, etc. These stories are extremely important to group identity and cultural transmission (values, goals, customs, beliefs, mores, etc.).  But narrative doesn’t just matter for large groups of people; it is extremely important for smaller groups of people too, like families, as well as at the individual level.

At the individual therapeutic level:

Some of the more fascinating findings about the power of narrative at the individual level come from this Eric Barker article.  He opens his article with a quote:

People think that stories are shaped by people.  In fact, it’s the other way around… ~Terry Pratchett

Barker shows how narratives can help us uncover long-term goals and values (imagine your funeral and write your obit / life story).  And in psychotherapy, narrative is equally, if not more, effective than medication for treating depression.  The idea in psychotherapy is to interpret past life events through a new narrative lens, to get in someone’s head and literally change how they see the world, which helps build meaning via narrative cogency.

Furthermore, seeing our lives in the context of stories can help bring clarity to big decisions.  However, it is important that one construct / understand themselves through a true narrative, not necessarily inventing a completely new facade, but, instead, seeing their story perhaps from simply a different angle.  If the existing story is unsatisfactory, then part of the task of constructing a new narrative can be accomplished by simply moving closer to life one imagines (ex: volunteering more can help people see themselves anew, providing a narrative pivot, allowing them to define new meaning and identity).

At the family level:

Author Bruce Feiler writes, “the single most important thing you can do for your family may be the simplest of all: develop a strong family narrative.”  He goes on to argue that individuals that know more about their families tend to do better when faced with challenges.

The more children knew about their family’s history, the stronger their sense of control over their lives, the higher their self-esteem, and the more successfully they believed their families functioned. The “Do You Know?” scale turned out to be the best single predictor of children’s emotional health and happiness.

But not all family narratives are created equal.  The healthiest, most beneficial narratives highlighted both the family’s struggles and their successes, but placed the most emphasis on familial resiliency, on their willingness to stick together through thick and thin.

At the group and organizational level:

In the same article, Feiler cites management expert Jim Collins, who argues that “successful human enterprises of any kind, from companies to countries, go out of their way to capture their core identity.” (think of mission statements, core values).  Apparently even the military uses history-teaching and communal activities to build camaraderie and increase unit cohesion.

As a means to an end:

Emory Psychology professor Drew Westen, writes a great introduction to the importance of stories in his New York Times Op-Ed.

The stories our leaders tell us matter, probably almost as much as the stories our parents tell us as children, because they orient us to what is, what could be, and what should be; to the worldviews they hold and to the values they hold sacred. Our brains evolved to “expect” stories with a particular structure, with protagonists and villains, a hill to be climbed or a battle to be fought. Our species existed for more than 100,000 years before the earliest signs of literacy, and another 5,000 years would pass before the majority of humans would know how to read and write.

Stories were the primary way our ancestors transmitted knowledge and values. Today we seek movies, novels and “news stories” that put the events of the day in a form that our brains evolved to find compelling and memorable. Children crave bedtime stories; the holy books of the three great monotheistic religions are written in parables; and as research in cognitive science has shown, lawyers whose closing arguments tell a story win jury trials against their legal adversaries who just lay out “the facts of the case.”

He emphatically argues that Barack Obama should have used traditional storytelling techniques to build a stronger coalition of support for his post-recession agenda. Westen contrasts Obama with Franklin Roosevelt, who did use traditional storytelling techniques (fireside chats anyone?) to help unify (and successfully lift) the country out of the Great Depression.

This is an important lesson for any leader.  To build consensus and buy-in, tell your constituents / team members a particular kind of story, a compelling one with protagonists, villains, causes, effects, and clear way forward.

At a much more granular level, common advice says that one should always start a presentation with a story.  Grab the audience’s attention right off the bat.  Similarly, recent research suggests that stories encourage the production of oxytocin, the love hormone, which, coincidentally, is responsible for building empathy and trust.

With empathy and trust-building in mind, storytelling can be a powerful tool in pitches of any kind, including start-up funding requests and job applications / interviews.  Storytelling even makes for more compelling emails.

Conclusion:

I’m sure I could find even more research about the benefits of storytelling and narrative, perhaps for couples or relationships of any stripe, but I’ve hopefully already made the point.  Stories are wildly important (but we’re also wildly susceptible to their charms, so be wary of deceitful sophists).

In the context of personal finance and frugality, there is always a story to be told around money.  For example, Mr. Money Mustache has done a great job articulating his story, to the benefit of both his audience and his own happiness and financial health.  His post, If You Think This is About Extreme Frugality, You’re Missing The Point, lays it all out.

He flips the script, framing their $25,000 lifestyle as one of extravagant happiness and first-world luxury, a contented, complete life without all the consumerist trappings that society insists upon us.  This gracious and optimistic attitude undoubtedly makes it easier for the MMM family to maintain their impressive and seemingly blissful lifestyle.

All-in-all, it really does pay to think about the kind of stories we’re telling ourselves and the of implications they have on our lives.  

What’ll your story be?

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About The Author

James Flannel Guy ROI's picture

Portland, Oregon-based Flannel Guy ROI is a working dude and family man that likes flannel shirts and wants to achieve financial independence a little sooner than most, particularly by making smart spending decisions and living intentionally. 

His overall idea is to look at spending decisions as investments: what decisions will return the most value to you over time? 

Each scenario is evaluated over a 10-year horizon with the following summary statistics:

Present value – what is the total value of your investment and expected returns in today’s dollars?
Return on investment (ROI) – how much of your original investment will you make back?
Payback period – how long will it take you to recoup your original investment?

Learn more at www.flannelguyroi.com

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