With Valentine's Day taking center stage, February is widely considered to be the month of love. Although your first thought when reading that is about the special date you have planned, it's also important to consider your finances. Believe it or not, there are a lot of emotions tied to money for everyone and the most common sentiments are shame, anger, and anxiety. This month, set aside time to break up with financial stress and set yourself up for a more stable relationship.
The source of our attitudes around money
Money may seem like a purely numbers-related fact of life, but in reality, that can't be further from the truth. We learn our money behaviors from our experiences and the environment around us. This can include how your parents or guardians spent and saved and the attitudes around spending in your inner circle and geographical location. When pinpointing your emotions around money, the influence of your life experiences is something to consider.
Anxiety and avoidance can create a vicious cycle
As stated above, shame is one of the most common emotions tied to money. It's human to try and avoid things that make us feel shame or anxiety, but this avoidance can create a vicious cycle and make the situation worse. This is one major reason it is important to understand the psychology of money. Take the leap and set aside time to take a frank look at your financial situation, including your debt, savings, monthly income, and expenses. Use this information to empower yourself to make a solid financial plan and reduce negative feelings.
Steps to harnessing your emotions around money and set yourself up for success
Define your personal financial style
Everyone is different, especially when it comes to managing our finances. There are many different attitudes regarding money management, and we've gathered a few below.
- You may view money as a source of safety and security. This person is most likely very frugal and focused on saving money and makes sacrifices to do so.
- Some people view money as a source of status and power. People with this point of view tend to take more financial risks and make large purchases.
There are pros and cons to all of these mindsets. Being too frugal can result in missing out on smart or lower-risk investments or passing up on insurance that may save you money in the long run. Viewing money exclusively as a way to achieve social status can result in little to no savings in case of an emergency or a feeling of disappointment when large purchases aren't worth it.
Change your mindset around saving money
After establishing and recognizing your emotions around money, it's time to hone and direct these feelings to create a strong and secure personal financial voice. Reframe how you view your daily life. Saying no to brunch or large purchases may not feel great in the moment but can really pay off in the long run.
Frame it not as saying "no" to this and depriving myself but instead saying "yes" to something your working towards such as a vacation of a life time or a down payment on your dream house.
Follow through and do a financial check in periodically
Defining your financial style and changing your money mindset are excellent first steps when taking control of your emotions surrounding your financial situation, but it's important to reassess your situation every now and then. We recommend setting aside time every month to review your progress toward your financial goals and make any tweaks or adjustments needed. Remember that anxiety and avoidance will put your right back on track.
During this month of love, take the opportunity to work on your emotional relationship with your finances. There is no need to feel ashamed of where you're at. Focus on where you're going and the steps you'll take to reach your goals. Financial stress can create a vicious cycle of anxiety but working to establish a strong financial voice is the first step toward redefining your emotions surrounding money and setting yourself up for future success.
