Financial HealthWe can all spot the different types of spenders around us—the big spender, the penny pincher, the king or queen of retail therapy, the dream chaser always looking for a big take – we may even be able to attach such a label to ourselves. But what makes us the way we are? Why do we spend how we spend? Save (or not save) as we do? The answer is as simple – or complex – as the reasoning behind everything else we do: we’re fueled by emotions, and we act accordingly, at least the best way we know how.

Envy, Fear, guilt, shame, these aren’t the only emotions you’re likely to feel when you think of the relationship you have with money. But it turns out they are some of the biggest emotional motivators on how your relationship will play out. And a relationship it is – you and your finances are constantly evolving, growing, regressing, and dancing with each other. It’s a bit like moving with your shadow; you are separate, yet tied together and dependent on each other.

Envy, and a desire to “be part of the gang,” can both lead to impulsive or poorly-considered financial choices that may trigger the fear, guilt, and shame. Fear can take flight from worry that we don’t (or won’t) have as much money as we need or want. Guilt often emerges from making spending/saving choices we later regret (like spending more than we make). Finally shame may raise its ugly head as a result of repeating the same behaviors expecting new results.

So where does this get us? Is our financial relationship doomed because it’s at the mercy of our emotions? No, thank goodness, it is not! Awareness is the first step to deciphering our emotions and choosing a corrective action. Who, or what triggers our financial emotions? Then monthly, before you spend, try creating a visual budget roadmap to bring the reality of your existing personal obligations and available resources into the equation. The money remaining is your “non-essential goods and services” bucket.

Emotional Misclues: Pitfalls to Avoid

  • If you find yourself feeling fear, guilt, or shame, watch out for avoidance. We’re hard-wired to avoid things that make us feel anxious. (This is the root of procrastination!) But the key to a healthy relationship (even with your finances) is knowing where you stand. Avoiding your finances may bring short term relief, but it’s a recipe for long-term disaster.
  • If you find yourself feeling envious or recognize you’re throwing caution to the wind, give yourself a time out. You need breathing room and thinking time. If you know the true health of your finances, and you stop yourself from rushing into a decision, you’re more likely to be happy with your decision – whatever it is – in the long run.

If you want to take your financial relationship to the next level, give us a call.  We specialize in getting you two on the same page.