Do I Have a Healthy Relationship With My Finances?
Exploring the very personal psychology behind our money insecurities
Personal finance is just that: personal. The simple mention of it has a tendency to bring out all kinds of mixed emotions in people: anxiety, stress, fear…you get the idea.
But whether we like it or not, money has real-world consequences and is a part of our everyday lives.
Given that we have to deal with money on such a frequent basis, we should aspire to have a positive relationship with our personal finances, instead of one that fills us with dread.
In this article, we’ll take a closer look at how money intertwines with psychology. You can expect to learn about:
- The two major money insecurities and where they stem from
- Where you sit on the money insecurity spectrum
- How we can all enjoy a healthier relationship with our finances
By confronting your financial fears, you can begin to feel more in control of your money instead of the other way around.
Why Are We So Insecure When It Comes to Money?
If there is one thing you should know about me, it’s that I think about money a lot. Like, an unhealthy amount.
If you’re reading this, chances are you probably do too. Or perhaps you have some other type of money insecurity lurking in your psyche.
Most of us do, and acceptance is the first step to taking back control.
Whether you are a money hoarder like me or have a tendency to spend your cash like there is no tomorrow, we all have a very different relationship with our personal finances.
But no matter where you come from or what your relationship to finance is, many of the money habits that we notice in ourselves as adults were actually formed during our childhoods.
Depending on how money was perceived in your household while you were growing up, you may have either a positive or negative view of it.
So as you come into contact with money over the next few days, whether that be receiving or spending it, ask yourself: do you perceive money with abundance or scarcity?
The Golden Standard for a Healthy Relationship With Money
For one reason or another, many of us don’t have the best perception of money. However, this doesn’t mean we shouldn’t strive for a better relationship with our finances.
Firstly, it’s important to note that your relationship with money isn’t the same as how much money you currently have in the bank.
You could have very little money and still have a great relationship with it, or vice versa. You could be one of the wealthiest people in the world and have a terrible relationship with money.
This is because it has little to do with the amount of money and everything to do with your feelings and experiences with the concept of assigning value to the world around you.
We will get into the relationship side of things further in the article, but first, let’s look at what an ideal relationship with money could look like.
Everyone’s goal when it comes to their ideal relationship with money will be different. Below are three examples of my goals — feel free to use them as a guide to get started on your own goals:
- I aspire to let money serve me, not control me.
- I view money as neutral. It is a part of my life, but not something I seek to think about on a daily basis.
- I want to use money as a tool to improve my life and the lives of those around me.
By being aware of your current relationship with money and mapping out where you eventually want to get to, you can start to take the necessary steps in the right direction.
Now we will move on to the two main types of money insecurities, starting with my personal experience as an Obsessive Saver.
Money Insecurity #1: The Obsessive Saver
I first began noticing my Obsessive Saver money insecurity in college.
It was the first time in my life that I had to support myself and pay all of my own bills. At a time when I wasn’t making a lot of money and living in an expensive city, every dollar truly mattered.
Even though I wasn’t earning a lot, I wanted to be responsible with the money I did have, so I started a habit where at the end of each month, I would go through all my statements and bills, adding up my earnings and expenditures into a spreadsheet. I assigned different spending categories so I could compare my expenditures to previous months and years, to make sure I was living within my means.
Unfortunately, over the course of seven years, this seemingly responsible habit turned into a bit of an obsession for me. The spreadsheet I created made me so concerned with my income and expenditure that I started financially restricting myself in ways that I now regret.
For instance, I let myself miss out on trips, concerts, and other fun experiences someone in their early 20s should have, all because I didn’t want to go over my budget.
Even when I did let myself go over on things like the occasional dinner out with friends, the guilt I felt of overspending would ultimately make me enjoy the experience a lot less.
Nowadays, long after my frugal student years have passed, my stinginess still rears its ugly head ever so often because my brain has become so hard-wired to stick to a budget.
In these situations, I am always left feeling conflicted and guilty.
Rationally, I know I am in a financial position where I don’t have to be concerned with spending a few extra dollars here and there on things that add value to my life. But the mind can be a very irrational place.
I know very well that I am not the only one who is an Obsessive Saver to the point of irrationality, which is why I wanted to highlight my personal experience with it.
Even though we Obsessive Savers exist, this type of money insecurity isn’t discussed nearly as much as this next one…
Money Insecurity #2: The Compulsive Spender
At the opposite end of the money, relationship spectrum sit the types of people who part with their money faster than they can say: it’s finally payday!
Most of us know at least one person who is like this — or perhaps you recognize a little bit of this habit in yourself.
More often than not, the Compulsive Spender has some form of debt and lives paycheck to paycheck. Yet despite all this, they always seem to have the latest iPhone and a tendency to charge vacations to their credit cards.
I can’t fault people who live like this because they are likely to have an equally twisted relationship with money as I do, just in a different way.
In fact, a few members of my family exhibit Compulsive Spender habits, and understanding the circumstances they grew up in; I can see why they spend the way they do.
When it comes to how these two money insecurities play out in real life, we can argue that being a Compulsive Spender is more dangerous than being an Obsessive Saver.
I mean, I may be too obsessed with keeping track of my money, but at least I can sleep well, knowing I’ll most likely have a healthy retirement fund to show for it.
Nevertheless, any type of money insecurity, no matter how big or small, can be debilitating. Let’s take a closer look at how we can start to turn around our money insecurities.
Finding a Middle Ground
Although I can’t speak for those on the other side of the money insecurity spectrum, I do think we can all learn from one another.
How so?
By finding a happy middle ground for our respective money insecurities.
For those out there who are Compulsive Spenders, it’s about instilling habits to spend a little less and save a little more. There are hundreds of articles and resources on how to get better at saving in a way that works for your financial situation, so I won’t even try to broach this massive topic.
So what about those of us, however rare it might be, who are too good at saving and awful at spending?
Personally, I am trying to find little ways to be more generous with my money and detach myself from it — to see it less as my money and more as a resource to share with others.
What goes around comes around has become my new mantra, and I hope that looking at it this way helps me reframe my clingy mindset towards money.
In Conclusion
Whether your money insecurities lie mostly in the Obsessive Saver or Compulsive Spender categories, the best we can strive for is balance.
By identifying where we sit on the spectrum and deciding what kind of relationship we want to have with money going forward, we can begin to make a change for the better.
Remember, it’s never about how much money you have, but about the kinds of emotions money elicits for you.
Though we can’t always control how much we earn, we can always decide what type of relationship we want to have with our finances.
Sometimes, the best solution is the easiest one: so long as you have enough set aside for a rainy day and to achieve your desired life goals, you should feel free to spend your money (guilt-free) as you wish. To me, this is the sign of a mastered money relationship.
After all, we could be gone tomorrow, and this would all be for nothing.
This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.
