If you are working towards transforming your relationship with money, this article is your ultimate guide.
Money is the means through which we get the things we want and our basic needs. It is important for our survival.
In the 21st century United States, you have to let go of some bucks.
Our insatiable desire makes money essential.
College tuition, getting your next meal, and utility bills are a few expenses we face. Still, we underestimate the strength of money.
A report in 2015 suggests that money is a significant factor of stress amongst adults.
Also, arguments about money early in a relationship have been found to be the leading cause of divorce.
Your relationship with money is something you must consider if you want to earn more of it.
Our relationship with people determines how we value them. In the same way, our relationship with money will influence how we value it.
Some people treat money like an archenemy, the Voldemort to their Potter. Others get obsessed with having money.
Of course, some people enjoy a healthy relationship with money.
Ultimately, you need to discover your current relationship with money then make it a healthy, thriving one. It comes from within and flows outwards.
What is a Relationship with Money?
When you think of your friends and loved ones, chances are you express positive emotions like happiness. This is because of your relationship with them.
A relationship is linked to your opinion of someone else. If you treat them well and show friendliness, you have a good relationship with them.
When it comes to money, you have to consider how you view it.
It contributes to your financial wellness and the level of satisfaction you get from your income, regardless of its present size.
A healthy view of money will help you approach the business world with optimism, contentment, and discipline.
On the other hand, a negative relationship with money may lead to insecurity, extreme competitiveness, envy, fear, guilt, shame, and corruption.
Think about money as a person you are dating. Will it be healthy or toxic?
What is your Relationship with Money Like?
Imagine a straight line. It represents the range everyone falls in when it comes to money relationships.
On one end is the miser who is concerned with acquiring and micro-managing money due to the fear of not having enough.
On another extreme, we have the spendthrift who purchases everything he sees and pays no attention to savings and investment.
Both extremes stem out of insecurities.
We tend to tilt towards one end or the other when it comes to acquiring, spending, and managing money.
No two individuals can have the same relationship with money, even siblings.
The way we view money comes from the notions about money, which many believe to be true.
Our relationship with money is based on the inherent beliefs we have of it.
Some Common Messages People Hold to be True About Money
- Money is the root of all evil.
- Life is too short so enjoy while you can.
- You can never have enough money.
- Money brings happiness.
These messages are formed and can be changed by our childhood experiences, religious and political views coupled with life challenges.
Someone who grew up in a home where money brought about constant argument may either see money as the root of evil or be pushed to believing that money brings happiness.
A conservative Jew may not be as eager to spend as a liberal atheist.
Someone who survived a car accident may become a spender because the experience has shown him how short life is.
What is Your Financial Style?
When it comes to money relationships, research has shown that there are three dimensions of money.
While you evaluate these dimensions, you should be able to determine where you fall on the financial style spectrum.
1. Acquisition
This focuses on how you get money and how much you believe you need to feel a sense of security.
Some people don’t want to acquire too much money because of their opinion of it being evil. Others feel it is irrelevant.
Still, some make it their life goal.
When taken to the extreme, some may be too scared of making money or be so insatiable they break the law and indulge in corruption.
2. Spending
Another aspect to consider in our use of money is what we do with it.
Some take frugality up a notch and live like paupers while having six figures in their bank account.
Others are compulsive spenders.
A better option here is to be intentional and careful with how we spend money.
3. Management
The management dimension covers keeping track of our income and expenditures, from how we pay bills to our investments.
Some people micromanage their money and ensure that every last penny is accounted for.
Others get confused with how they spent their money due to poor management.
Knowledge of the beliefs we have and the dimensions of money is one step towards having a good relationship with money.
However, you must know whether you have a terrible or healthy relationship with money.
Hence, it would help if you diagnosed an ailment before getting a cure.
Signs of a Bad Relationship with Money
If you have behaved in any of the ways listed below, you may have an unhealthy relationship with money.
1. Getting Worried You Will Not Have Enough Money
If you constantly struggle with anxiety over the thought of not having enough money, you have developed a mentality that you can never have enough money.
This leads to unhealthy competition, fear, the envy of others, and extreme frugality.
2. Hating Rich Folks
People who struggle with a poor relationship with money often harbor resentment towards the upper class.
They question the source of wealth of the rich people around them.
This is an unproductive behavior that would get you nowhere. It is better to focus on your financial situation than that of others.
Hating rich people can also lead you to pretend you do not want to be rich.
You make poverty a virtue, constantly criticize the way rich people spend.
So, you end up seeing riches and the rich as inherently evil, an attitude that prevents you from learning and growing.
3. Feeling Guilty When You Spend
If you’ve ever felt a gnawing sense of guilt when you open your wallet to buy anything, it is a bad sign.
You end up hoarding money and depriving yourself of certain life comforts.
4. Finding Excuses Not to Save
If you need excuses not to save, you will always find it.
However, this prevents you from developing a solid financial habit. No matter how much you earn, you can always find a little to save.
5. Refusing to Take Responsibility for Your Finances
There are a lot of external influences on a person’s finances.
For instance, people living in third-world countries may find it harder to become wealthy.
However, this does not give you the excuse to push the blame of your current financial situation on others.
It would be best if you learned to be responsible for your life; this includes your finances.
6. Believing You Need to Have a Certain Amount of Money to be Happy
When it comes to money, people believe you need a certain amount to buy happiness.
“If I could get a million bucks, I would be happy.”
“I need the raise from my job; that would make me satisfied.”
You mustn’t hinge your happiness on the money you have.
When you believe you need money to be happy, you get obsessed with it. This can lead to unhealthy behaviors.
Money is only but a tool to meet your needs, not a source of happiness.
Overall, the toxicity from a bad relationship with money may lead to you making mistakes when handling money.
Common Mistakes in Money Relationship
The relationship we have with money reduces or increases our chances of making mistakes in the aspect of our finances.
Below are some common mistakes people make in money relationships.
1. Getting Scammed
This boils down to the need for instant gratification and the urge to acquire more money.
Scam investments promise you quick rewards that are attractive.
You should know that every investment business should be subject to the test of time and reality.
Does it seem too good to be true? If so, you should avoid it.
2. Striving to Keep Up with the Joneses
Trying to maintain a lifestyle that drains your income is a mistake you have to avoid.
It can drive you into debts you have to struggle to crawl out from.
The mentality behind this is that money brings happiness.
3. Saving More than you Spend
It may seem wise to save a bigger part of your income than what you spend.
However, this only leads to frustration and points to a toxic sign of being worried about not having enough.
It is okay to save, but do not be miserly about it.
4. Focusing on Other People’s Finances
It may be a hard pill to swallow, but some people will be richer than you. That includes your siblings and friends.
Obsessing over the financial status of others will make you envious, discontent, and resentful.
5. Borrowing Too Much
Some think it is justified to borrow for a good cause such as investment. It, however, is more of a gamble.
The best thing to do is to avoid getting into debt as much as you can. But we are not above these mistakes.
Nevertheless, debt can be avoided to a great extent.
So, keeping in mind the toxic signs and mistakes, you also need to know the benefits of creating a healthy relationship with money.
Why you Should Create a Healthy Relationship with Money
A survey done by financial services firm Edward Jones, with around 2,000 adults of all ages, half men and half women, showed that only 21% of respondents reported feeling happy when thinking about money.
In contrast, 16% feel overwhelmed and anxious.
Another recent survey by Acorns asked young people 18 to 40 years old how they feel about their financial future. The responses were “Anxious” 26%, “Meh” 44%, “Confident” 30%.
These statistics point to an alarming fact that a good number of the American population do not have a healthy relationship with money.
Little wonder we are stuck in a rat race with no way out of the cage.
It becomes increasingly important to understand why you should create a healthy relationship with money as your needs increase.
Your finances directly affect your physical and mental health.
Having the right attitude towards money gives you a positive mindset that reduces stress, depression, and anxiety.
As a result, your lifestyle will improve, which would be an advantage to your physical self.
In a nutshell, a healthy money relationship will help you to:
- Spend carefully and with purpose
- Be debt free
- Invest with wisdom
- Save to achieve goals
- Meet basic needs
- Be contented with what you have
The 7 Ultimate Steps to Transform your Relationship with Money
Now you know what it means to have a relationship with money, symptoms of a bad relationship with money, and the benefits of a healthy relationship with money.
Hopefully, you would be eager to improve on the way you approach and handle money.
Below are the 7 ultimate steps to guide you in transforming your relationship with money.
1. Change your Negative Beliefs about Money.
By now, you must have figured out some conceptions you have had about money that hinders you from financial wellness.
The next thing to do is to uproot these negative beliefs and plant more positive outlooks about your finances. Let us review some of the negative beliefs people have about money:
- Money is evil
- I can never have enough money
- Money is not for people like me
- You have to get some dirt on your hands to be rich
- I want to save, but it is not possible with these bills.
A practical way to change your mindset is by picking a particular belief and replacing it. For instance, if you believe that money is evil, think of all the good that is done in the world courtesy of money.
2. Develop Better Financial Habits
Self-improvement in any area of life is a result of habits you develop over time.
For instance, If you need to lose fat, making exercise a habit will get you to achieve your goals.
Transforming your relationship with money involves practicing profitable habits like paying bills on time, spending with care, and avoiding illegal means of earning.
Related: 13 Tips To Improve Your Financial Health
3. Set Goals
As you work on getting positive beliefs and profitable habits, learn to set realistic goals that would enable you to save, invest and spend money wisely.
Ensure that your goals are not vague. Vague goals are wishes, and you know what they say about wishes.
A goal is realistic, specific, measurable, and can be reached.
4. Be Confident with Money
Confidence in your ability to acquire and maintain money will significantly transform your relationship with money.
By keeping in mind your strengths, values, purpose, and worth, you can break limiting thoughts about yourself and be more intentional about the things you do. That includes your income.
5. Work on Your Financial Intelligence
Financial IQ refers to your ability to understand anything related to finances.
This includes your personal income, company gains, investment plans, and every other knowledge and skill required in the business world.
It is an aspect of you that you can develop.
You can begin by looking into some of the suggested resources below
- 20 Personal Finance Tips For Financial Success
- Save Money Live Better: 20 Creative Money Saving Hacks
- 10 Personal Finance Questions You Should Ask Yourself
Below are some books that can also help develop your financial intelligence.
- The Intelligent Investor by Benjamin Graham
- Rich Dad, Poor Dad by Robert Kiyosaki
- The Only Investment Guide You’ll Ever Need by Andrew Tobias
- Think and Grow Rich by Napoleon Hill
- The Richest Man in Babylon by George S. Clason
6. Learn from Successful People
Rather than compare yourself to wealthy moguls or resent them, learn from them.
Their experiences, insights, and mistakes can set you on the right trail.
Do not limit yourself to self-help books. You will also learn a lot from autobiographies and biographies of successful men and women.
7. Practice gratitude
It is easy to accommodate anxiety, negativity, and discontent regarding money, especially with the pandemic and its economic effects.
One way to guard your mind is by being grateful for what you have at present.
You may not feel you have enough, but you are in the process. Be grateful for that process.
Bottom Line on Transforming Your Relationship with Money
You may feel overwhelmed after reading this article, not knowing where to start. There’s no need to fret.
Transforming your relationship with money takes work, practice, and constant review; and with time, you can make it a healthy, thriving one.
So, it is best to take things slow.
You could start up with the advice given in the very first step and move on from there. In the long run, you would notice results.
What’s important is to ensure you work towards being a better handler of money every day.
I hope that you would become a better person with a more satisfying, fruitful lifestyle that would significantly enhance your whole being.
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