How often do you communicate with your money? Is it always over the phone or do you text sometimes? Do you initiate the conversation or does your money? Okay, this may be a bit of a stretch, but in all seriousness we all have a relationship with our money, and it is good to assess this relationship from time to time.
This has nothing to do with how much you have or how you make it. Someone who lives on a few hundred dollars a week can have a lot better relationship with their money as compared to someone who “gets by” on a few thousand a week.
So how do you assess this relationship and why do most people never think about it?
I am sure there are a number of ways you could approach the topic, but I like to take a step back and look at who is in control. This is a lot easier said than done with a self-assessment, so try to be objective. None of us want to feel like we are at the mercy of our paycheck or savings account, so it is easy to idealistically answer this question and say that you are in control, but here are a few questions that may give clues to who is in control.
- When your paycheck or retirement check comes, is the money already spent?
- Do you get anxious around the time of the month when all the bills show up?
- Do you save money only if there is some left after your spending?
- Do you worry about not having enough saved to retire and outliving your money?
- Are you surprised at how much got charged to the credit card when the bill comes?
- When you have money in your pocket, do you get the urge to spend it?
- Do you hold off on purchases or vacation because you aren’t sure if you can afford it?
I could go on with the questions, but even with this short list, most people will say yes to at least one of them. No need to panic. This only means is that your relationship with your money may not be as good as you thought it was. All “yes” answers to the previous questions tell me that the money is in control of that particular situation. Fortunately, none of the above scenarios have to lead to the eternal chase of the dollar.
How do you take back control?
Saving and Planning are the two main topics that, when employed appropriately, can help you establish control and maintain a healthy relationship with your hard-earned money. It doesn’t matter how much you make, you won’t get anywhere if you can’t save some of it! Saving money is the cornerstone to all financial success stories. Then, making realistic plans and goals for what to do with your monetary resources puts the control back in your court leading to a healthy relationship with money.
How much more enjoyable would that Caribbean vacation be if you could put it all on plastic, (to get the miles/ cash back of course) then pay it all off with the money you specifically saved up for that purpose in your vacation savings account? Even though this sounds like common sense to some of you, most people buy something first and then try to figure out how they are going to pay for it later.
These skills are not elusive, but they do require dedication and determination to make hard decisions and taking deliberate actions that will put you in a better place financially.
Why don’t more people have a healthy relationship with money.
The saying, “if it was easy, everyone would do it”, hits it right on the head. I believe it comes down to a few consistent themes. These themes resonate with many universal aspirations; including staying healthy, being mentally and physically fit, and achieving financial independence. It is much easier to maintain the status-quo rather than to change. It is not easy, nor should it be, to reach the financial peace that most strive for.
Also, we live in a consumer society that conditions us to live in the now and spend money to keep up with the latest and greatest. The pull to enjoy money now is so much stronger than the thought of patiently saving to enjoy that money 10, 20, or even 40 years down the road. I get it. Planning this far in advance is not easy, but it is necessary to fund the near-term goals that we want to enjoy and support the long retirement most of us dream about.
I write this with the hope to break the mold of financial stress that most Americans fall into. We want everyone to experience the euphoria of knowing you are in control of your financial situation and your money answers to you and not the other way around. If you are already there, then you should feel good about enjoying the fruits of your labor. If you are not there, or you know someone who isn’t, encourage them to seek a CERTIFIED FINANCIAL PLANNER™ who can help them establish a savings regimen and plan for the future. Investing the time to take control and establish a healthy relationship with money may be the best investment you will ever make.