Saving more money, paying off debts, and being able to meet your recurring financial obligations are goals most of us share. However, if your relationship with money is not healthy, it can seem impossible to make any progress towards your financial goals.
If you have been on what seems like a rollercoaster of trying to save money and build wealth with disappointing results, it may be time to examine your relationship with money. You may have endured months or years of trying to make financial progress but setbacks seem to always pop up. To really examine your relationship with money, there are a few things that need to happen before lasting change occurs.
Identifying You Have a Problem with Money
Looking at your current financial situation with honesty and objectivity is critical to turning things around. Although this is possibly the hardest step, looking at your finances objectively is the best way to get on the right path.
So what does an unhealthy relationship with money look like? The answer depends on various factors and is different for every person. It often begins with a lack or scarcity mentality.
The scarcity mindset makes one feel that there is never enough money, despite how much is earned. This lack-based mentality leads some people to hoard money. Alternatively, it compels some to spend money as fast as they get it for fear that there won’t be more.
Money expert Patricia Remele recommends completing an exercise to identify your beliefs surrounding money. Called the “shovel exercise,” you begin by listing any negative beliefs you have about money, using the word “shovel” instead of the word “money.”
For example, you might say, “I feel like no matter how hard I work or how much I earn, there are never enough shovels to go around.” It may seem like a silly exercise but by replacing the word money with something less emotionally significant, you help retrain how you view your finances. Once you have admitted that there are some unhealthy beliefs and behaviors associated with money, you can then begin the important work of changing your money mindset for the better.
Change Your Perspective
After you realize that you may have some negative beliefs about money, it’s time to do the work to change these beliefs. Look at the negative beliefs you have about money and think about their opposite. If you are constantly stressed about money and it consumes your thoughts, start to take note of how much time you spend thinking or obsessing over money. By paying more attention to your thoughts, you can see how these thoughts are not serving you and can actually make things worse.
You may find that you are triggered by bills coming in the mail or calls from creditors. Changing your perspective can alleviate some of the stress. If you don’t know how you will meet your financial obligations, work on finding solutions and not stressing about your inability to pay.
If you know you have enough but are still stressed over money, it can help to develop hobbies that redirect your focus. Take the time to set non-monetary goals and develop a clear picture of what your ideal life looks like. By focusing on what you do want instead of what you don’t want, you can change nearly every area of your life, including your finances.
Be More Hands-On with Your Money
Many people fail to be proactive about their finances. They don’t feel like they have enough money, so they avoid checking their account balances or creating a plan to improve their finances. You might even avoid opening bills because you feel that there’s not enough money to pay them. One of the biggest things you can do is be more proactive when it comes to managing your finances.
Start with creating a budget. Yes, that is the conventional money advice that everyone is given but having a plan for your money really does help. Knowing how much money you have and how much you are spending is essential if you want to change your money mindset. If you feel you would do better with a handwritten budget, take that approach. For those who are more tech-savvy, download a budgeting app and start there. No matter how you choose to budget, the most important thing is to get started. From there, the most important thing is consistency.
After you’ve consistently budgeted for a few weeks, you will have a better understanding of where your money is going and how often. Knowing this information (rather than estimating or guessing) will help you gain perspective and will help you make more informed money decisions.
Don’t Be So Hard on Yourself
Financial self-sabotage is real, and many people are overly harsh on themselves when it comes to managing money. People often punish themselves for their beliefs about money instead of looking for practical solutions.
When you start working on your relationship with money, there will be some resistance to change. This is completely normal. Remain focused on the end-goal of changing how you see money. As you see progress, it will become easier to shed those habits that no longer serve you.