If you google the definition of relationship, this pops up.
“the way in which two or more concepts, objects, or people are connected”
I CAN’T AFFORD THIS BUT……..
We usually associate the word “relationship” with people, but what about the relationships we have with “concepts” or “objects”? In my work, I often help clients to strengthen these kinds of relationships, and one that can have a big impact is the relationship with money. For example, I had a friend that was over $20,000 in debt. She would come over with bags of items saying, “OMG! I know I can’t afford this, but look at what I just got!! It was such a great deal!!” She would pull her new items out piece by piece and look to me to get excited with her and justify her out-of-control spending. She clearly had an unhealthy relationship with money, which led her down a path of instability.
A LIST OF COMMON UNHEALTHY RELATIONSHIPS WITH MONEY
Take a look at the following common relationships people have with money. Do any of these resonate with you? Is there a relationship here that you didn’t even realize you had? What stories and justifications do you have to support this relationship?
I’m not good with money
I can’t spend that much….what if
I need money to make money
Money doesn’t buy happiness
Money doesn’t grow on trees
I don’t know where to start
I have no self control
I have to hold on and save money
He who has the most money wins
I can either make money or do what I love to do
More money equals more problems
You have to work hard to have money
It’s a lot of responsibility to have money
I don’t deserve to have money
Maybe you connected with one of these attitudes, or maybe you didn’t. Either way, your relationship with money drives your financial decisions every day, even if you don’t know what that relationship is. How we think and feel about money is not something we are taught to explore in school. Today you have more options to shift your relationship …you can sign up for classes, workshops or seminars. But if your basic relationship with money is unhealthy, you will usually be unsuccessful in managing your finances, no matter how many goals you set.
FIRST STEP…..AWARENESS
The first step in changing your relationship with money is practicing awareness. Find out what your relationship is—what habits do you have? What emotions arise? What is your inner dialogue?
For example:
Like my friend above, maybe you “Have no self control with money.” You may have a habit of shopping to wind down after a long day, or hunting for sales. You may feel a sense of excitement when you find a bargain, or a sense of urgency. You may tell yourself “This is too great of a deal to pass up!” or “I deserve this!” In the meantime, you are racking up credit card debt and have no idea how to pay for everything. When you think about your debt, you feel panic or hopelessness, and so you avoid dealing with it.
Or maybe your relationship with money is “I need to have lots of money”. You may have a habit of stashing money away for a rainy day or an emergency. You may feel unsafe or unsecure if you don’t have enough money in the bank, and you may tell yourself, “I will buy that jacket/nice dinner/vacation when I have saved enough.” In the meantime, you deprive yourself (and maybe your family) of having nice things, going on vacations, or having a nice home. Maybe you have lots of money, but you continue to negotiate great deals for yourself at the expense of others.
HOW WE DO ANYTHING IS HOW WE DO EVERYTHING
In life, how we do anything is how we do everything. That means, when you mend your relationship with money you will also transform many other areas of your life.
FOUR STEPS to develop a positive money mindset
Here are 4 steps to develop a positive money mindset.
WAKE UP (Grow your awareness)
Ask yourself, “What is my relationship with money?” “What are my stories and rationalizations around finances?” Learn to identify your feelings around money. When do you feel excited? Scared? Guilty? Satisfied? Observe what you do when confronted with financial situations and emotions. What feelings arise? What do you tell yourself? What actions do you take?
FORGIVE
Have you made financial mistakes in the past? Maybe you missed credit card payments, or even went into bankruptcy. It is important to forgive yourself in order to move forward. Listening to your inner dialogue can help you find out where you are. Maybe you tell yourself “I’m so stupid for buying that.” or “I should have done this.” Instead of focusing on the negative, start to tell yourself that you did the best you could at the time, and acknowledge that you want to do things differently moving forward. After all, “to err is human; to forgive, divine.”
SET FINANCIAL GOALS
Take some time to create a S.M.A.R.T. goals that are specific, measurable, achievable, realistic and time defined. For example,
SPECIFIC: I want to pay off credit card debt. (Think of a specific goal)
MEASURABLE: The credit card debt is $5,000 ($5,000 is the amount I want to pay off. I will be able to measure my progress each month until it is paid off.)
ACHIEVABLE: I can afford to pay $500 plus tax every month. I will also stop using this card so I won’t accumulate additional debt. (Put action items in place that you know you can accomplish.)
REALISTIC: I can save money by limiting dinners out to twice a month and making coffee at home. (Be realistic about how you plan to tackle your goal. In this case, maybe you have a way to bring in some extra cash or a way to cut expenses.)
TIME DEFINED: If I pay $500 plus tax every month, I will pay off my credit card in 10 months. (There is a specific timeline to make the goal.)
In this case, your S.M.A.R.T. financial goal would be:
I will pay off my $5,000 credit card in 10 months by paying $500 (plus tax) towards it each month. I will achieve this by cutting my entertainment expenses, not using my credit card and using the money I make on my side-hustle.
If you feel overwhelmed, first acknowledge this feeling. Know that this is new territory for you but you are committed to moving forward. Even if your goals feel small, do something! Taking a small step forward each day will quickly lead to big changes. And if you aren’t sure how to get started, get some help! Do you have a friend that is great with money? Can you ask around and see if there is a highly-recommended financial professional? Maybe the internet or social media can help you learn more. One of my favorites is on instagram: @female.in.finance. Check it out for daily personal finance tips.
EDUCATE YOURSELF
If you want to have a positive relationship with money, like any relationship, get to know it. Surround yourself with people who have great values around money. Take advantage of all the great information out there. Books, social media, podcasts, blogs are all great educational resources. You know those people you are going to surround yourself with who are great with money? What are they reading, listening to, or watching? Even if the concepts seem complicated, have faith in yourself—you can do this!
Your relationship with money is like any relationship in your life. It can be healthy or toxic, nurturing or debilitating, supportive or defeating. Take control of this relationship! Start with awareness, then make the positive changes that you can follow through with, even if they are small. Get support if you need it, get educated, follow through even if it is uncomfortable or scary, and you will see big results.
