Are you in a terrible relationship with your money? Do you and your money disagree with your goals and where you should be headed?
Do the two of you seem to be going in opposite directions? Are you constantly tugging at your money and you’re not getting the attention you think you should be getting?
Well, you are not alone. Millions of others have a bad relationship with their money too!
However, 2017 is going to be the year that you and your money are going to head in a positive, happy, healthy direction.
Have you ever really stopped to listen to your money? What is your money trying to say to you? Is your money saying, “Look, I can’t cover the expense of this.” Perhaps your money is saying, “I can’t give you what you want, only what you need.” When you stop communicating with your money, your relationship gets worse. Often times much worse as you think you need to go elsewhere to get what you want. This damages your relationship with your money.
When you to turn credit cards and debt, you are cheating on your money, just to get your way, to get what you want, to not be tied down, to have a more exciting life, but these are ruining your relationship with money. By going the debt route, you will be headed down a very unhealthy, financially damaging path that you will pay dearly from to recover. In fact, your money is going to be the one you can rely on to get you out of the mess, to pay for the mistakes you made. Trust us, we had a terrible relationship with money too.
The first step was that we needed to communicate. We needed to understand what our money was saying to us, what our money was telling us what we needed instead of what we wanted. Our money is smart. Why? Because it somehow knows how much it can handle, how much it can be stretched and extended until it is gone. We needed to listen to what that extent of our money was and realize we needed to live within those means and be content in doing so.
2. Create Boundaries
After lines of communication have been opened with your money, you now need to set boundaries. In other words, a budget! The boundaries need to be set so you have a clear understanding and direction regarding your money’s limit, to respect your money and to know what is and is now allowed. Within these boundaries, each month, you can work in reducing your expenses and increasing your income in very small, manageable ways to open up the boundaries even more as time goes on.
We encourage setting money boundaries (a budget) with the use of the tips in this post, and then learn the best way to adjust those boundaries and work within the limits, sustainably and successfully with our 2×2 rules.
3. Give It Attention
The next aspect of creating a better relationship with money is to give good attention to it. You are now communicating and understand what your money’s limitations are and understand that you need to live and work within these means. Then you set the boundaries, a.k.a. the budget.
The next step to better your relationship with money is to give it attention. We would recommend this come in the form of two parts.
- If you have any debt, any financial goals and have ignored many aspects of money and life, you probably need to join a challenge that provides an easy, actionable step each week to help you better your relationship with money and to get to the next level in your relationship. A relationship where you can tell your money exactly where to go and what to do and come out at the end in a much better place financially, bringing a bit more peace into your money relationship. That is why we have the 52-week financial challenge called Take Back Your Finances.
- Along with your weekly challenge tasks, you also need to give your budget and spending attention each day. We highly recommend having a quick 5-minute check-in with your money about the day’s spending. Did you stay within the boundaries? Is there anything coming up that you need to prepare for? How did you do today? What can you improve upon, etc? Balance the checkbook, keep the spending in check and review the goals!
4. Think before you spend
Finally, the last step in bettering your relationship with money is to THINK before your spend. We made an extra level of spending protection in our relationship with our money and with each other by setting a spending threshold.
What is a spending threshold?
It is a set amount of money that you can spend freely. However, if a purchase is above this threshold, you must talk with your spouse or someone else keeping you financially accountable to talk it out and decide if this is really a great purchase idea.
When we were in the deep heart of working towards paying off our $108K of consumer debt, we set our spending threshold to $5. If there was a purchase over $5, we would call and talk to each other about it. If I found the next pair of shoes I wanted, if it was over $5, I knew that I was going to have to call Alex and say, “Hey, I found a super deal on these shoes at only $10!” He might come back and say something like, “Do you really need another pair of shoes?” and ask questions to help both of us decide if this is a purchase worth making. Don’t worry, he had the same limitation, usually shoes of the running kind with the same response from me. 🙂
This extra level of protection causes us to think before we spend, thus ending much mindless and reckless spending and even more saving!
What are some ways that you would recommend to others to better their relationship with their money?