We love it, we hate it, we hoard it, we waste it. Truth is, most of us have a complicated relationship with money. And another truth? Many of us think we should intuitively know how to manage our money when, in fact, it is a skill to be learned, no different to driving a car or cooking a meal. Unfortunately, we don’t always take the time to seek advice or guidance and often beat ourselves up over the financial mistakes we make. It’s time to change the narrative.
As with most things, we look at our finances through the lens of childhood lessons; it may be time to change those beliefs and assumptions. I was taught not to spend money on myself and to learn lots of handy skills so I could things for myself. I also learned that travel is an essential part of life, even if I had to save for a year to take a trip. Can you point at some of your own money habits and smile knowingly? (Thanks Mum and Dad!)
How to know if you need to change your thoughts around money? To begin, money adviser, Richard Fremont, suggests asking yourself the following questions. Do you agree or disagree with the following eight statements?
- You live beyond your means every month.
- You think money will fix all your troubles.
- You dislike talking about money.
- You avoid thinking or seeking advice about money.
- Your future financial situation leaves you feeling insecure and anxious.
- You have unexamined beliefs and assumptions about money.
- You are jealous or resentful of those you know who have money.
- You hoard the money you have. (For example, you refuse to buy new clothes or take a vacation.)
Agree with two or three? It is time to check-in, assess your current situation and make sure you’re heading in the direction you want. Answer four or more? It is probably time to consult an advisor and create a plan.
Money can be a touchy subject; Emily Post (etiquette queen) believed it worse than sex or religion when ranking inappropriate topics of conversation. Is it any surprise then that so many of us struggle to navigate the maze of money, investing, saving and spending? What’s a gal to do if she wants to learn more about such a taboo topic?
Maslow’s hierarchy of needs highlights basic requirements (food, water, safety) psychological needs (relationships, confidence, self-esteem) and self-actualization (creative self-expression, spontaneity, morality). Money is not mentioned in this list but I would suggest that in today’s America, money plays a significant role in our lives and would fall firmly in basic requirements.
We all know ‘money cannot buy happiness’ but with fewer than a third of Americans claiming they are very happy with their life,** could there be ways to improve how we think about and use money that would enhance our lives and boost happiness levels?
Wayne Dyer reminds us, “if you change the way you look at things, the things you look at change.” The decision to improve our relationship with money automatically sets us on a different path.
First, money is simply an energy we use in our society. Just as the body needs a combination of proteins, carbs, fats and other nutrients to function optimally, so a person needs the right combination of relationships, health and money to have a full and contented life. To say that money is an energy simply means that it is a tool we can use to better our own lives and the lives of those around us.
Perhaps we take note of what we are eating, ensuring we stay healthy as we age, maybe we watch the miles on our car to make sure we change the oil and do maintenance as needed to keep the car healthy. It makes sense to approach our money with the same awareness. The US Bureau of Labor Statistics reports that the average American spends $140 per day; do you know where your money goes every day or month?
There are plenty of budget tools and software options available online that allow you to track your spending habits and a general rule of thumb is to track for 3-6 months to get a clear picture of how you spend. See below for website and app suggestions.
Can we learn to see it money a tool to increase our satisfaction and joy? How do we want the energy of money to function in our lives?
Next, begin to notice how you interact with money, what are your thoughts and feelings? What are your triggers? What phrases run through your head with regard to money? According to A. Keith, a money coach in Seattle, WA, “doing deeper work can lead to insights around money attitudes, financial triggers […] resulting in lasting, positive change.” As we shine the light on our thoughts and feelings around money, we become more comfortable questioning old beliefs, educating ourselves (possible sidebar) and discussing money and finances with others, releasing us from past negative behaviors and thought patterns. Keeping a journal dedicated to your thoughts and feelings around money spotlights areas for support and growth.
In addition to doing our own personal work, it can be beneficial to have those difficult financial conversations with family and friends. Doing so can clear any misunderstandings, deepen channels of communication and build stronger relationships.
Finally, ask for help and advice but only from someone who is qualified to offer it. For some of us, especially those in debt, more extreme measures may be called for. Mr H., a retired US Marine, was 30 when he realized he was deeply in debt. He went to CCCS, a non-profit and free-to-those-qualified organization that arranged payments with debtors and allowed for a single payment which suited his unpredictable schedule. Three years of frugal living later he was out of debt and saving towards his first home.
For those of us looking to improve our current finances or plan for the future, look for advice and guidance from qualified sources. Your neighbor who always has more month than money or your best friend who has nothing in his rainy day account are not the best place to go when you are ready to make big positive changes in your financial health. Rather, ask your financially successful friends and family to introduce you to their financial planner or coach and check credentials and testimonials.
Like any dramatic change, the journey to a stronger healthier relationship with money takes time and energy and demands a commitment to self and future. The effort will be well worth it when you untangle the jumble of emotions and misinformation and find yourself feeling confident about your current and future finances.
And me? If you need me, I’m probably in the garage making a table or wandering the streets of Paris. (Thanks Mum!)
For publications:
OPTIONAL SIDEBARS:
- Maslow’s Pyramid (Hierarchy of Needs)
- Types of financial advisors (what different titles mean)
- Recommended resources for education. websites, apps etc…
Written Dec ’14
REFERENCES:
US Bureau of Labor Statistics – https://www.bls.gov/cex/csxann13.pdf
** The Harris Poll – http://www.theharrispoll.com/health-and-life/American-Happiness-at-All-Time-Low.html
World Happiness Report – http://worldhappiness.report/ed/2017/
Wayne Dyer – internationally renowned author and speaker in the field of self-development
Adrienne Keith – http://adriennekeith.com/services-coach/
Consumer Credit Counselling Services https://www.credit.org/cccs/