Transforming Your Relationship With Money (2024)
Your relationship with money could be classified on Facebook as “It’s complicated.” Because here’s the thing, money is complicated.
Sure, there are the basics like earning money and spending money. But what about everything else? What about the emotions tied to money?
Do you love money? Hate it? Maybe you have a love/hate relationship with money. Whatever it is for you, I’m a financial therapist, here to help you start transforming your relationship with money.
Transforming Your Relationship With Money
When trying to understand your relationship with money, you’re going to take it way back to the beginning of time. Okay, not that far. But you will start thinking about your Money Story.
Your Money Story
A Money Story is your personal experience with money and is unique to you. It affects your thoughts, emotions, and behavior around personal finances.
Your Money Story might include hardships like watching your parents fight about money. Which, in turn, makes you believe that money inherently causes arguments.
It could be that money was never talked about. Therefore, you believe money is a taboo topic. You might think it’s tacky to talk about money, even with those you are closest with (like your spouse or children).
Maybe your Money Story is generally positive. You had parents that seemed to communicate effectively about money and taught you good spending, saving, and investing habits.
No matter what it is, your Money Story is important because it inevitably impacts your attitude about finances. And your attitude impacts how you’re transforming your relationship with money.
More than Numbers
If you’re hoping to change your relationship with money, you must realize that it’s more than a numbers game.
Money collides with every aspect of your life. Every decision you make has a financial component to it. It’s true.
Think about it, 99% of the decisions you make in your life are impacted by money.
Thinking about where you want to live? Cost of living plays a role in that decision.
Are you taking a weekend getaway to wine country with the gals? Vacations take time, energy, and money.
Want to grab coffee with a friend? Buying an Iced Venti White Mocha with Oat Milk and an Extra Shot of Espresso costs money.
See, money is far more than numbers. It’s about how you want to live your life.
4 Signs You Have a Toxic Relationship With Money
Your relationship with money might go beyond “It’s complicated.” It might be toxic. (Insert Britney Spears in flight attendant outfit here.) These are 5 signs you have a toxic relationship with money:
1. You avoid mail with bills inside
Do you see a bill and it goes straight to the “I’ll get to it later” pile on your counter? Or worse yet, the trash?
If that’s you, then you have a toxic relationship with money. And you fall in to the “If I can’t see it, it doesn’t exist” category.
Let me be the bearer of bad news: Even if you don’t look at your bills, they still exist. And it’s time for you to start transforming your relationship with money.
2. You’re afraid to check your account balances
If you’re afraid to check your account balances, I’m afraid you have a toxic relationship with money.
Checking your account balances is often overwhelming and stress-inducing. It can lead to an anxious spiral, so we just don’t do it.
However, avoidance won’t help you transform your relationship with money. It just perpetuates the fear cycle.
3. Talking about money makes you feel negative
The toxicity between you and money might go even further than being unwilling to open your mail or look at account balances. You might not be able to even talk about money at all.
When you talk about finances, you instantly get that pit in your stomach, you feel hot, and might even get a tad shaky. This is because money is associated with all sorts of emotions, oftentimes negative emotions.
When you feel fear, shame, or guilt about your financial position, you, my friend, have a negative money disposition.
4. You believe money is the root of all evil
We’ve all heard the age old saying, “Love of money is the root of all evil.” I’m here to shake things up a bit and tell you, that’s just not true. Before you get all defensive, let me explain.
Money can absolutely be associated with greed. No doubt. It can also be the source of abundance, generosity, and impact. It’s all dependent on your relationship with money.
How Generational Cycles Impact Your Relationship With Money
I’ll let you in on a little secret: Your toxic relationship with money isn’t (totally) your fault.
There are many things that influence your relationship with money. Like we talked about before, the relationship your parents had with money and how you were raised to think about money is important context.
People aren’t fully aware of how much their upbringing impacts their current relationship with money. But behaviors are caught, not taught. And how your parents related to money is inherently ingrained in how you relate to money.
You can’t break generational cycles without being aware of them.
How Society Impacts Your Relationship With Money
I’ve said this before, and I’ll say it again: We aren’t just keeping up with the Joneses and the Kardashians anymore, we are keeping up with everyone.
Thanks to social media we get the fast track to the highlight reels, and it makes us feel like we need all the things. Here’s how it goes:
- We scroll social media.
- We see a post about Jessica’s new kitchen renovations.
- We look at our older, drab kitchen.
- We decide we need also need a kitchen renovation.
- We put ourselves in debt to feel like we measure up to Jessica and her fabulous kitchen.
| A few months later |
- We see another post from Jessica, and she’s on a luxury vacation in Bora Bora.
- We think about how badly we need a vacation.
- We book a vacation on a credit card because YOLO.
This is your reality check: JESSICA DOESN’T CARE
Okay, but seriously, we see these beautiful things by these beautiful influencers and have literally no idea what’s going on behind the scenes.
Maybe Jessica is in overwhelming debt, too. Or maybe she’s living off of a trust fund. Either way, it doesn’t matter.
What matters is how you are setting yourself up for financial success, not Jessica.
Mere Exposure Effect & Instant Gratification
Another explanation of how society impacts our relationship with financial decisions is called Mere Exposure Effect. In this psychological phenomenon, the more often a person is exposed to something, the more they prefer it.
I humbly believe this is what happened with bucket hats. No one can actually like the look of bucket hats. But since you’ve seen them so often, you have no tricked yourself into liking bucket hats. They’re ugly, but I digress.
When we repeatedly see others wearing certain attire or an appealing aesthetic and we think, “Wow, I really like that. I should get it.”
As simple as a tap of the thumb on your Amazon Prime app, you have that item at your doorstep within two days.
The mere exposure effect often leads to instant gratification. In our click-to-buy culture, you can decide you want something and within minutes, it can be on its way to you.
It’s truly astounding how society influences our financial decisions.
5 Ways to Transform Your Relationship With Money
The question remains: How can you change your relationship with money? Here are 5 of the best ways to do so:
1. Ask Hard Questions
If you’re interested in transforming your relationship with money, you have to start understanding three things:
- The thoughts and feelings you have about money
- Your behavior and actions you demonstrate with money
- The endless possibilities money can provide you
Understanding your relationship with money is like peeling the layers of an onion. On the surface you might spend recklessly. So you need to start peeling back the layers to uncover why you spend so haphazardly.
For example, on the surface you frequently spend far more than you have on clothes, adding consumer debt to your credit cards. The question is, why?
For many people spending is more about feeling good than it is about the actual purchases they make.
Buying things gives us a hit of dopamine, the neurotransmitter held in the “reward center” of the brain. Dopamine also goes by another name: The “feel good” chemical.
Now you understand that you’re shopping to feel good. Okay, why? (Next layer.)
It’s possible that you’re overstressed at work and in your personal life, causing you to look for other outlets to make you feel good.
Now, ask why? And, so on.
Are you starting to see how money isn’t just about balancing a budget? There are emotions, habits, and psychology behind your financial choices.
A great way to start looking deeper into your financial habits is to ask yourself the hard questions. Ramit Sethi, a financial expert and author of I Will Teach You to Be Rich, created a journal, which is a great place to start.
2. Improve Your Money Mindset
After you uncover some of the layers of your financial habits, you’ll begin to recognize money lies you’ve been telling yourself for years. Some common money lies are:
- I’m not good with money.
- I don’t care about money.
- Money is stressful.
- Money causes arguments.
Do any of these sounds familiar to you? If so, it’s time to change your money mindset.
Similar to having negative feelings about your body image, you can’t go from telling yourself down-putting money lies to instantly having a positive money mindset.
It takes patience, practice, and time. Go for neutrality before positivity.
Just as you shift from Reverse, into Neutral, then finally into Drive, the same goes for money mindset.
Take the lie, “I’m not good with money,” for example. Try shifting that narrative to “I’m learning about money.”
Then, after some time has passed and you start to believe that truth, shift into positivity saying, “I’m good with money.”
Improving your money mindset will forever transform your relationship with money.
3. Make Goals for Your Life
You have a negative relationship with money because you’ve always heard (and now believe) that money is the root of all evil.
For as long as you can remember, you’ve thought money is the villain. But the truth is, it’s not. Money can bring some of the greatest joys into your life.
Think about it this way: When you start taking control of your money, you take control of your life.
Set three types of goals for yourself: Short-term, medium-term, and long-term.
Examples of these goals might look something like this:
Short-term goals:
- Increase my salary by negotiating a raise at my mid-year review.
- Cut costs that don’t serve me (like on random subscriptions or impulsive Amazon purchases).
Medium-term goals:
- Go on a family vacation to New York City in the fall of 2030. Stay in Times Square and see a broadway show while we’re there.
- Buy a new family-friendly vehicle in about 4 or 5 years when our current mini-van can’t be driven another mile.
Long-term goals:
- Retire by age 65.
- Help our children with college tuition and expenses.
Any goal you set for yourself and your family has financial implications. Which means, every goal you have requires intention, purpose, and drive.
When you realize that, you realize how important money is. Then, you can start transforming your relationship with it.
4. Practice Financial Self-Care
Have a bad day? You should treat yourself.
Have a good day? You should treat yourself.
Does this sound familiar?
That’s because as a culture, self-care has become a buzzword. And believe me, as a therapist, I’m all for self-care, so long as it’s actually moving the needle.
In particular, I’m a big advocate for financial self-care. That’s what’s really going to deconstruct worries and build success, long-term.
Here are some great ideas for practicing financial self-care:
- Schedule time to review finances regularly.
- Keep a financial journal, where you document dreams, goals, and worries.
- Don’t confuse self-worth with net-worth.
- Practice self-acceptance.
- Embrace change.
When you embrace financial self-care, you embrace transforming your relationship with money.
5. Show Self-Compassion
We live in a world that has trained us to believe everything should happen quickly. And when something doesn’t change in an instant, we give up hope that it can ever change.
But your money habits have been built for decades.
Show yourself compassion and grace as you start transforming your relationship with money. It will take more than a day, a week, and even a month to start changing your money habits. And that’s okay.
Transforming Your Relationship With Money: Resources
There are many great resources out there to help you start transforming your relationship with money. Here are a few of those resources:
1. Know Yourself, Know Your Money by Rachel Cruze
Rachel Cruze wrote the book Know Yourself, Know Your Money in 2021, and this book does a really great job of delving deeper into the emotions behind money choices.
She breaks down the different “types” of people with money. AKA are you a natural spender or natural saver? And what things are you motivated by?
2. I Will Teach You to Be Rich by Ramit Sethi
Ramit Sethi wrote the book on how to live your rich life. In his book, podcast, and Netflix show, I Will Teach You to Be Rich, Ramit uses a 6-week program and highly encourages automation for you to start living your version of a rich life.
Ramit also has an I Will Teach You to Be Rich Journal, which is worth exploring, too.
3. The Psychology of Money by Morgan Housel
This is a great book for understanding the behavior behind your money decisions. The Psychology of Money uses short stories to explain different ways people think about money, and is a great resource for you.
The Wrap Up: Transforming Your Relationship With Money
Your relationship with money may have been complicated, but it doesn’t have to stay that way.
You can do things like uncover your money story, understand how your upbringing and environment impact your current money choices, and change your money mindset in order to change your relationship with money.
Money is so much more than numbers. Your financial position and relationship with money depends on your emotions, mindset, and, in some cases, past traumas. But you can take back the control of your money today!
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