Money can be an overwhelming subject, especially in a world with rising inflation, sky-high housing prices, and an unpredictable stock market. It doesn’t help when the media is full of doomsday predictions and unsolicited advice from financial personalities.
In addition to all of those challenges, many people also feel frightened about their financial future or exhausted from receiving a constant stream of advice from well-intentioned family members.
Here are Guiding Wealth, we know how hard it can be to think about your finances without feeling guilty, ashamed, or terrified about what’s coming next. Those feelings are normal, and while they’re usually attributed to younger people, we hear them from clients of all ages.
Feeling that way all the time can take a toll on your mental health — and it makes it so much harder to manage your money effectively. So how can you overcome those feelings and build a healthy relationship with money? Is it possible to get to a place where you aren’t filled with dread every time you log into your bank account?
Yes! Here are three steps you can take to develop a healthy, positive view of your finances.
Step #1: Separate Your Self-Worth From Your Finances
Start by taking some time for self-reflection. Do your feelings about your finances affect how you view yourself? When you think about your income, your housing situation, or your debt, how do you feel about yourself?
Do you feel guilt or shame? If so, you’re definitely not alone. Many people feel this way. But your income and net worth have nothing to do with your value as a person — you are not just your salary or retirement savings.
So the next time you have those feelings, remind yourself that your finances don’t define your worth, value, or ability to have a positive impact on those around you.
Step #2: Try to Avoid Making Emotional Decisions
Are you an emotional spender? Or an anxious saver?
Letting sadness, fear, or guilt drive your finances is a common experience. But it’s not the best way to manage your finances, especially when you’re trying to relate to your money in a healthy way. Emotions can cloud your judgment and make it difficult to figure out which decision is objectively best.
So, how do you put your feelings aside when you’re making financial decisions?
Try to avoid dealing with your money when you’re tired, hungry, or emotional. Whether you’re sad, elated, or somewhere in between, strong feelings make it extremely difficult to view information objectively. If you manage your money together with a spouse or partner, it’s especially important to remove strong emotions from financial conversations and decisions.
So, the next time you make a big purchase or update your budget, take the time to put your emotions aside and focus on the logical aspects of the decision. You may want to consider bringing in a third party, like a financial planner, to help you get a different perspective.
Working with a financial planner can also be useful if you and your partner are having financial disagreements. A financial planner’s perspective as an objective third party can make it easier for couples to have productive, positive conversations about their money.
Step #3: Don’t Give In to Spending Shame
Finally, let’s talk about spending shame. It’s that feeling of guilt every time you buy something for yourself, especially if that thing isn’t “necessary.”
Some common examples of this include ordering takeout for dinner or spending a little extra to have your groceries delivered. You might also feel guilty for spending a night out with friends or using your tax refund for a vacation instead of putting it in your emergency fund. If you’re like most people, spending money on yourself often comes with a hefty dose of guilt.
There are many underlying causes for feeling this way, but it’s often tied to how you were raised. You might also think you “should” feel guilty or ashamed about spending money on something that isn’t necessarily a “responsible” choice. So, how do you overcome that guilt?
It starts by shifting your thinking. Instead of focusing on the dollar amount of your spending, think about its real value. When you get groceries delivered, you’re saving yourself the time and stress of a store run. A night out with friends helps you maintain important relationships. Ordering a pizza can give you more time to relax with your partner and kids instead of cooking dinner. And a vacation can give you lifelong memories with your family.
Money isn’t just money — its value depends on how you use it! And when you use money in ways that match your priorities, you don’t have to feel guilty about what you choose to spend it on. You can be confident in your choices and know that you’re getting the most value out of your resources.
Money Is a Tool That’s Meant to Be Used
Of course, we’re not saying you shouldn’t save for retirement or build an emergency fund. Those things are definitely important. But we are saying that money is simply a tool — and you should use it in ways that are right for your family.
If you feel guilty every time you buy something or question your self-worth when you look at your bank statements (or loan balances), that adds a lot of unnecessary stress to your life and impacts your ability to make logical choices with your money.
Your true worth isn’t tied to your retirement accounts or loan balances. Financial success doesn’t have to mean retiring early or being debt-free by 30. A far better measure of success is how you use your resources to live your values and have a positive impact on your corner of the world.
You’re in control of your relationship with money — your finances don’t need to run your life or emotions. We know that’s easier said than done, especially in this unpredictable economy. But no matter how high your grocery bill gets or what happens in the stock market, you can still control your perception of money.
If you’re ready to take this approach with your money, start with your budget. Create a budget that reflects your priorities — not those of a popular finance book, a famous financial personality, or a well-meaning friend. Figure out what matters to you, and allocate your money accordingly.
If you don’t have a budgeting system you love, try BudgetingBlocks™. This hands-on approach allows you to visualize your funds and divide them up according to your unique goals. It’s a fun, gamified way to think about your money, which almost always leads to more success than just using paper and a pen. Learn more about BudgetingBlocks™ here!