We can all agree that strong money management is an integral part of maintaining healthy finances. Yet, our relationship with money is an often-understated tenet of our money habits. Think about this relationship as how you feel about money. What is your mindset when it comes to money? Do you feel confident and in control of your finances or do you feel overwhelmed and bogged down by the responsibility?
If you think you are “bad” with money, it is important to recognize that you may just have an unhealthy relationship with money instead. This could manifest as:
- Feeling out of control, where you feel buried in debt and think that you can’t get ahead
- Financial shame and guilt, where you are beating yourself up for overspending
- Anxiety and avoidance, where you procrastinate on paying your bills or filing your taxes
- Overspending and indulging when you “should know better”
- Avoidance on looking at your bills and numbers all-together
In reality, our money behaviors are just a side effect of something deeper: our underlying thoughts and how we relate to money. These thoughts will not only influence how we feel but also our financial decisions. Our emotions are important indicators to the type of thoughts we have about money. Sometimes this happens without our awareness. Even a very skilled money manager will have a momentary slip-up, where they feel disconnected, and lose sight of their goals.
No matter where you are in your financial journey, here are 3 mindset tips that can help you get back on track.
- Be Empathetic – Recognize where you are in the process and know that it is a journey. Treat this moment as an opportunity to learn more about your spending habits, then decide if anything needs to change. Forgive yourself for past mistakes and realize that your money situation can change for the better. If your goals seem daunting, just remember “a journey of a thousand miles, begins with a single step”
- Be Flexible – Life happens. When the unexpected occurs, don’t get stuck on setbacks. Being resourceful and knowing when to pivot is necessary to achieving your goals. Your plan is a roadmap, not a rule book.
- Be Grateful – Practicing gratitude repels a scarcity mindset and shifts your focus to appreciate the things you already have. As you become more satisfied with what you have, the less likely you will succumb to emotional (over)spending.
Self-awareness is key to improving your relationship with money. Before trying to make any changes in your habits, take inventory of your belief system and see if you have any “blocks” in your mindset. It will be hard to stick to a budget if it makes you feel restricted or if you think you don’t have enough. The reality is that more money is not necessarily going to solve all your money concerns. It has less to do with how much you have than what you do with it.
Reach out to us at DharnaCPA about how we can support you on your journey to financial well-being. We use a holistic approach, including financial planning services, to empower our clients and assist them in achieving their financial dreams.