Many of us have a strained relationship with money. It started when we were little kids and watched our parents handle their cash flow. We picked up their perceptions, good or bad, their habits and even their stress around money.
We get into adulthood with little education using a tool that is a factor in every decision we make. The balance between instant and delayed gratification is so difficult. Our perception of money twists when we mix in emotional baggage, cultural ideologies, taboo, desires, expectations and self-control. Then our own habits really go off the rails when we have kids, student loans, old credit cards, income changes, and anything else life throws our way.
The idea that money is easy and common sense is a problem. It adds strain to our relationship with it because we blame and beat ourselves up. Shame can cause paralysis. If you and money have a love-hate relationship reminiscent of a bad ex-boyfriend, here are some tips to get that loving feeling back.
Assess the situation and where you are now.
This is the first step to falling head over heels with your finances. Write down all your income. Next, subtract out all your bills to find out if you have negative cash flow or a “bleed”. Write down all your debts and assets to find out your net worth. Write down all the things you think about money to find out if your mindset is part of the holdback.
Bring back the excitement.
Write out your biggest, baddest, juiciest goals. This requires some imagination and telling your practical mind (the nay-sayer of hopes and dreams) to STFU. These goals might scare you. Maybe you want things that are not practical, like a jet ski and a handsome gardener. Maybe you want more luxury, like new underpants and the softest sheets ever.
At this point, you should know where you are and where you are going! Even if your goals are outlandish (and they should be) work toward them. You will not have as much desire to work towards something that is not exactly what your little heart truly desires.
Strategy is the next step.
Oh, my nerdy financial advisor heart beats fast for strategy! What is the plan for the credit cards and student loans? How many dollars need to be set aside for emergencies, retirement, and the lake house? Put your big plans in place. No shame in hiring a professional advisor to help with strategy.
Habits need to be put in place to support strategy.
Set up systematic cash flow management so the money goes where you want. I hate to be the bearer of bad news, but most people don’t have success with budgets and setting up a system to follow is the better way. Examples of this include putting a bill calendar in place and limiting the number of times you go shopping per week.
Change your perceptions around money.
This seems simple, but is the deepest darkest root cause of money problems. If you believe that money is scarce, you will do crazy things with your money resulting in it being gone all the time. If you believe that money is dirty or evil or that having too much of it will mean you are a greedy capitalist pig, then you will self sabotage your attempts to get it.