As we head into 2023, and the January sales draw to a close, you once again may start thinking about how much money you spent. Then the credit card bill arrives with the hard truth about how much you actually spent. Your reaction to the expense will depend on how you view your relationship with money.
A healthy relationship with your money means understanding how money works. It means using your money to help you maintain good health, live a life with less stress, and invest in things that will support you long term. A positive financial relationship leads to financial freedom and wellness.
What is a relationship with money?
Money is not something to be afraid of. It is simply another thing that occupies space in the brain, similar to the way food, exercise, or work does. Looking at your relationship with food, exercise, or work can give you a glimpse of what your money relationship might be like.
Ask yourself how you feel about money? What are the emotions that come up when you talk about money?
No-one is bad with money; rather they have developed unhealthy relationships with it. This relationship varies between different people, but the common factor is that it creates an experience where you feel powerless and feel that your money controls you. When that happens it can negatively impact your mental and emotional wellbeing as well as financial anxiety where you start to hoard your money.
You want to turn that fear around so that you control your money.
Historical limiting beliefs
Your relationship with money was formed early on when you were a child. You observed how your parents, friends and others thought about money. You then unconsciously created a belief system based on those limiting beliefs. You may have been led you to believe money was scarce by hearing `we can’t afford that’ or that money was free flowing by spending more.
Or was money seen as a safety net, leading you thinking that you needed to get a good job or several side hustles to earn money? Or to be better at managing money it is best to stick to a budget.
Alternatively, when you have a conversation with close friends what are the common themes that emerge? Do they think that only people with certain jobs have the ability to make money. Instead of accepting those limited beliefs, challenge your thinking and ask yourself is that really true? Why can’t all jobs provide a lifestyle you want?
Improving your relationship with money
However, the best way to develop a healthy relationship with money is to change your mindset and how you think about money. It starts with knowing thyself and challenging those limiting beliefs you developed from childhood about money.
Financial wellness is having a conscious and purposeful relationship with money that is satisfying and not overly stressful. It includes spending money based on your values; having low or reasonable debt; saving money to meet your goals; and having a safety net, such as an emergency fund or insurance.
Here are a few simple steps to get you started:
- Identify your current relationship with money. Take note of your thoughts and feelings when interacting with money or financial tasks. Knowing where you are now can help with where you want to be.
- Identify your version of a healthy relationship with money, such as confident, calm and values driven.
- List out your unhealthy financial thoughts or practices, such as looking at your bank balance daily and make a conscious effort not to.
- Challenge your upbringing. Acknowledge the perceptions of money from what you learned growing up but then question any limiting beliefs formed about it. What did you learn from how your parents managed their money?
- Decide what healthy financial thoughts or practices you want to adopt.
- Finally, create a plan or engage a financial adviser to help. Using what you have learned above, start with small, achievable goals to set you on a path to financial wellness.
When you view money as a tool, it can either build something or break it. You have to learn how to use money to build the life you want.
Disclaimer: this post is not intended to be financial advice. You should always seek independent financial advice to discuss the options that suit you and the lifestyle you want to achieve.