You manage many relationships in your life with the things and people most important to you. Some of those relationships might be difficult, especially with family members or ex partners. Others may be relationships filled with joy and fulfillment. However, it’s possible you’ve never considered the “relationship” you have with money. Since money is essential to all aspects of your life, creating a healthy relationship with it is critical to your well-being. There is no better time to examine your relationship with money than during a divorce. This challenging life event can also be a great catalyst for change, and facilitate the right environment to understand, improve, and reimage your financial goals.
In this post, we explore how to build a healthy relationship with money. We’ll outline considerations and steps you can take to build awareness around and improve your relationship with money.
Understand your relationship with money
Before you can improve your relationship with money, it’s important to understand why and how you currently relate to money. Your approach to money has likely been influenced by factors such as your family, culture, religion, location, gender, social status, and education. As you reflect on these aspects of your past, notice which ones may be most prevalent in your views of spending, saving, and budgeting.
As you examine the factors that have influenced your perspective around money, notice what emotions come up when you think or talk about money. Do you feel excitement, anxiety, uncertainty, fear, or other feelings? Examine how these reactions might be tied back to your major influences around money. For example, if you grew up in a single-parent household where money was tight and in a social setting where money was important, you might never feel like you have enough money and experience feelings of anxiety and scarcity when you think about money, no matter how well you manage your finances.
Lastly, relationship attachment styles can provide interesting insights into money management philosophies. You might find some similarities between the way you approach any relationship in your life and the way you manage your money. The three major types of attachment in relationships are anxious, avoidant, and secure. If you have an anxious attachment style, you may find yourself more reluctant to engage in your finances and hesitant to do things like create and manage a budget. If you are more anxious about money (and relationships), you may be hypervigilant about your spending and savings and over-engage in budgeting activities. In secure relationships with money, you likely spend an appropriate amount of time focused on money management, are saving appropriately, and have accepted that finances will fluctuate moderately.
Take care of your foundational needs
Maslow’s hierarchy of needs is a great example of how to build your financial foundation. Just like this famous survival pyramid, you have to take care of and budget for your basic needs first before considering more complex spending and savings needs. For example, only after your prioirize your monthly mortgage, electric bill, cell phone payments, gas, insurance, and other necessary payments, can you consider how you might budget for an upcoming vacation. You can’t plan for higher-level needs and budget items that lead to higher-level happiness and fulfilment unless your basic needs are met. When you build your budget from your foundational needs, you have the opportunity to examine what brings you joy and fulfilment, which you can build into tier two of your budget.
Spend time with your finances
Just like good relationships are built on shared, quality time, it’s important to prioritize time with your finances to cultivate a healthier relationship with them. Start small with a few minutes a day in which you review your spending, categorize your spending, and understand key patterns in the way you save and spend money. Apps such as Mint and Google Sheets can help you organize your spending and your credit card company may even have these tools built into your spending summary. As you get more comfortable regularly reviewing your spending and identifying opportunities to improve, dedicate a longer stretch of time each weekend to your finances and spend time reviewing what is working and what needs improvement. These review periods are also a great time to check in with your emotions around money. When your spending is in alignment with your values, you’ll feel less anxious about money and more confident about your spending and saving patterns.
Create healthy boundaries
Like any relationship in life, you have to create boundaries to keep the dynamics of a relationship healthy. In the case of money, you must declare the boundaries you want to have with your money. This might look like setting limits to your spending and even defining consequences if you don’t adhere to these limits (such as cutting back your unnecessary spending in key areas). Similarly, you might reward yourself with a spa day or other memorable experience if you do manage to maintain healthy boundaries with money. Spend time reflecting on your current and desired boundaries regularly and adjust as your relationship with money evolves and progresses.
In order to have a healthy relationship with money, you have to understand your origins and beliefs around money, focus on your financial foundation, spend time reviewing your day-to-day spending, and create boundaries to ensure your success. At A.M. Financial, we can assist you in this process by providing various services to support your financial journey. Learn more in a free consultation.