You probably think of your money as numbers: how much you have in the bank, pay cheques you take home, and credit card payments you make. If you think about it, the amount of money you have is only one part of your relationship with it.

Many of us also think that we make rational choices about money. However, it’s likely that we make irrational spending decisions and don’t even know it. Behind our actions are beliefs about what money represents and how we feel about it. It may feel strange at first, but being curious about how you think about money will help you stay on top of your spending behaviour.

Treat money like a relationship

How do you treat money? Do you ignore it or monitor it closely? Do you feel anxious about it or does having money make you feel safe?

Building a good relationship with money is like nurturing any other relationship – it benefits from some attention, a caring approach, and realistic expectations. Having good financial management practices like budgeting, saving, and regulating spending helps keep you out of debt. In contrast, criticizing yourself for your past mistakes or poor decisions is not helpful.

Be kind to yourself as you learn to have a strong relationship with money. No one is born knowing how to manage their money well. As we learn, it is natural to make mistakes. Be honest about where you are and plan for the future you want.

Practice being grateful every time you earn or spend money. You may still be working towards getting wealthier, but it is important to our emotional health that we feel like our financial wealth is enough. Feeling under pressure about money increases emotional stress which can cause anxiety, depression, irritability, as well as physical stress which can manifest as headaches and tiredness. While you work toward improving your financial situation, try to be grateful for what you’ve already accomplished.

What’s your relationship with money?

Ask yourself these questions. If it’s hard to think about your relationship with money, this is a sign you don’t have a healthy relationship with it! In that case, take it slow: answer one question at a time and take a break in between.

1. Where do my money values come from?
2. Does money make me feel confident or insecure?
3. Do I have a history of making good financial decisions, and if not, why?
4. Am I hesitant to take action when there are issues regarding money?
5. Am I impulsive with money, or do I have the discipline to say no?
6. Do I think that there is never enough money or that there will always be more money?
7. Do I feel like I need to have the same clothing, furniture, housing, and car as my friends and family?

Some people never reflect on their money choices. They may say they’ll deal with the consequences tomorrow. Others know they should manage their money better, but say they will start in the future when they have more money. Then there are those who are very focused on managing their money but don’t live their lives now because they are always saving for tomorrow. Do you fall into any of these categories? Understanding your thoughts about money now allows you to decide on your behaviour in the future.

Why is knowing your relationship with money a good thing?

Learning about your relationship with money is crucial because it helps you control your behaviour. Studies say that about 25% of our personal financial management behavior is explained by our attitudes about money – that’s a lot! For example, understanding why you overspend on clothing, allows you to make changes. The alternative is to pretend you’re not overspending until the problem becomes too much of an issue to ignore. Or you may acknowledge you have a problem, but aren’t able to stop the behaviour. If you know the “why” behind your behaviour, you’re free to make choices rather than deal with the consequences.

If thinking about money makes you squirm, you’re not alone! No one is born knowing how to manage money, but we are all taught lessons about it along the way. Taking time to understand your beliefs about money frees you to make choices about your financial future.
 
By Nastashya Wall
 
Sources: Psychology Today: What Your Relationship With Money Reveals About You by Seth J. Gillhan, PhD; CNBC: Harvard Expert: Use This Formula To Improve Your Life Satisfaction And Your Relationship With Money by Cheyanne DeVon; Frontier Psychology: Attitudes Towards Money and Control Strategies of Financial Behaviour: A Comparison Between Overindebted and Non-Overindebted Consumers by de Almeida, et.al.; Forbes: What Is Your Relationship With Money? by Gregg Lunceford, PhD CFP; The Guardian: ‘Money Pervades Everything’: The Psychotherapist Delving Into Our Deep Anxiety About Finances by Mark Wilding; Broke Millennial by Erin Lowry; Happy Money by Ken Honda. Accessed June, 2024.