How Your Relationship With Money Affects Your Finances (and What You Can Do About It)

Your relationship with money can make the difference between a steady stream of income and a trickle. How so? Because the way you relate to money, the beliefs you hold around it, etc. – these things affect how you pursue money and how you make decisions with it. Today, let’s dive deep into how your relationship with money affects your business and personal finances, and what you can do to improve that relationship.

How Do You Relate to Money?

If you want to get a quick pulse on your relationship with money, think about money or say “Money,” out loud to yourself, and then keep track of what emotions come up. More than likely, there will be several that come up in a quick succession: anxiety, avoidance, excitement, compulsion or repulsion, etc. The goal with this exercise is not to suppress or judge any of the feelings as good or bad. Simply take note of them as they come up. Try this several times to get a full emotional picture.

How You Relate to Money Affects Your Finances

If you’re anything like most of us, anger, shame, and elation may have made an appearance during that exercise. Other common visitors are anxiety, avoidance, and a vague feeling of worry. All of these emotions influence our behavior around money. They dictate whether we’re an over-spender or an over-saver, whether we’re bold with our investments or cautious. In our business and personal finances, if we feel strong repulsive emotions like shame and stress, we may avoid looking at our money all together. This can lead small business owners to live in a state of perpetual vagueness around their finances.

Many of the emotions we’ve examined are negative ones, but your relationship with money can also include positive emotions that can be leveraged. Elation, for example, can motivate you to take action and claim financial agency. Personally, when I think about money, one positive thing that comes up is the way that money gives me choices in life. Associating choice with money has long helped me maintain a positive relationship with my finances.

For many of us, the goal is to simply reduce the stress involved in our finances, so that we can begin to handle them from a more rational place. Acknowledging all the emotions housed in our relationship with money is the first step.

How to Improve Your Relationship With Money

Now that you have a good idea of your “emotional money picture,” and an understanding of how it effects your financial behavior, let’s talk about how you can start improving your relationship with money. This process involves looking at your life over the longterm, and examining what experiences and people shaped the way you feel about money today. There are a couple different ways to do this:

  • Journal prompts are a great way to dig into this and examine your past with money. To get things started, I suggest trying out the prompt “People with money are _____.” You can fill in the blank, and then write about the experiences or people who informed this opinion. Try not to edit yourself. Just observe the feelings and memories that come up. After you’re done, you might take some time to examine what you’ve written and see if you can find examples from your life that contradict those beliefs.
  • If you aren’t the journalling type, talk to a money buddy, confidant, or coach. Make sure this person will hold nonjudgemental space for you. Try doing the exercise above, or shape your conversation in such a way that you can really get in there and see the roots of your money beliefs.
  • Reflect on how your financial situation has changed over the years, and in recent times due to COVID-19. Sudden changes in financial circumstances can trigger new emotions around money, and bring up old ones. This interview I did with photographer Jennifer Graham makes a great example of how the pandemic has effected people financially in the short term, and what coping strategies can be employed around that.

A Note on Money Beliefs vs. Societal Circumstances

Before I wrap this up, I want to acknowledge the current state of our society and economy. While more aid for small businesses has recently been approved, we are living through an economically damaging pandemic. There are likely many systemic factors effecting your experience with and relationship to money, including race, social class, gender, etc. I believe it’s important to take this context into account when working on your relationship with money, while not letting it discourage you from claiming financial agency.

I hope this has been helpful. If you’d like to have these conversations with a nonjudgemental accountability partner, I offer as-needed personal financial coaching sessions, or 3 and 6 month business finance coaching engagements. I have guided many clients through the process of working on their money beliefs, and would love for you to set up a free Financial Self Care Consultation to find out if we could work together well, too!

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Angela

Image: Natalie Breeze

 

Why You Need a Money Buddy

Why You Need a Money Buddy: At Peace with Money

Who do you go to for financial advice? We don’t talk about money that much in our society, but we should! Talking about our finances, our incomes, and exchanging financial advice can bring in helpful new perspectives to our financial lives. That’s why I believe everyone needs a go-to person for financial advice or perspective.

Not unsurprisingly, I am that person for a few people in my life. When my sister and I were young adults, we had a conversation about what roles or specialties we would take on in our lives. I have always been a “numbers person,” and volunteered myself to be the financial sounding board between the two of us. My sister calls me any time she needs financial advices, another perspective, or an extra set of eyes on her finances.A few weeks ago, she asked me for my advice about buying a new car, which I wrote about here.

Why It’s Important

Having a go-to person for financial advice is crucial for a few reasons. First, using someone else as a sounding board can lend clarity or new ideas to any financial situation. You can also share tools, tips, and ideas with each other. I enjoy talking with other financial coaches about their favorite strategies, and also get some good book recommendations!

Most importantly, having someone you trust to talk about money with can make your finances less intimidating. If you hear about someone else’s financial situation, it can put yours in perspective. Having a “money-buddy” is likely to keep you more accountable to your financial goals and also help you feel more comfortable thinking about money as it becomes a more regular topic of conversation in your life.

Solopreneurs may also appreciate having someone to bounce financial ideas off of, because they can benefit from outside perspectives. When you’re running your business all by yourself, it can be easy to develop financial blind-spots. Having someone to talk to about your business finances can help you avoid that.

Find Your Person

Try approaching a trusted friend or family member with the idea of sharing financial advice with each other. Make sure it’s someone you feel comfortable with so that your conversations are solely helpful. Once you’ve found someone, figure out how you want to structure your financial mentorship. You could review Why You Need a Money Buddy: At Peace With Moneyyour finances together every month, share your financial goals and progress, start a mini financial book club, or simply plan to call on each other when you need to make financial decisions. Keep it as simple or involved as you like.

I hope that finding a go-to person for financial advice will help you make better financial decisions and reach your financial goals. Of course, if you ever need professional help, you know where to find me.


Angela

Image Sources: Thought Catalog, Tyler Nix

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