5 Ways to Improve Your Relationship with Money

Do you ever wonder why we use the phrases “filthy rich” and “dirt poor”? Money can help provide for a comfortable life but we should stop attributing emotions to it. Money is a means to an end, not an end in itself. Money can help you accomplish your goals so it’s important to have a healthy relationship with money.

Tired of having a toxic relationship with your money? Here are 5 ways to improve your financial relationship.Do you want the freedom to work from home? Putting more money in your savings account can help you do that. Want to open your own business? Setting aside some funds can help you do that. Want to go on vacation without incurring debt? Guess what, having a travel fund can help you do that.

In order to let money help you accomplish your dreams and goals, you need to start by having a healthy and positive relationship with money.

Your Problems Are Not Caused By the Lack of Money

Imagine this, it’s 90 degrees out and your car breaks down on the side of the highway while you’re on your way to an important interview. You were afraid this would happen.

You’ve been skimping on the regular maintenance in order to scrimp and save and now the decision has come back to bite you in the butt.

Your initial instinct is to say, “This would never have happened if I had more money.” Is that really fair? What you should ask instead is why you don’t have enough money to pay for regular car maintenance.

Are you at a job that doesn’t pay enough? Are you prioritizing other expenditures so that there’s no money left over at the end of the month? If there’s not enough money, can you switch to public transportation or carpool to build up your savings?

There are times when I’ve been stressed at work and I think, “If only I had more money so that I can leave this job.” If I were to be completely honest with myself, I would realize that my unhappiness is not because of money.

Sure, I don’t have enough money to retire but the issues go much deeper. I have to recognize that the combination of my life decisions landed me where I am today.

Don’t Say, “I can’t because I’m poor.”

Have you ever been invited to outings and you don’t want to go so you say, “I can’t because I’m poor.” Don’t turn money into your scapegoat. If you have to use money as an excuse, it shows you have an unhealthy relationship with money. It’s okay to not want to hang out with friends, and it’s okay to have excuses but why use money as an excuse?

Why would you want to create the image that you’re not responsible with your money? Unless you’re an artist struggling for your art, being poor is neither hip nor cool. There are people who are legitimately poor, so don’t trivialize poverty.

Try this instead. If you’re working on certain financial goals and want to skip an expensive gathering with friends, tell them the truth! Say, “Hey guys, I can’t make the dinner next weekend because I’m saving up for a house.” If these are truly your friends, they’ll understand!

If you simply don’t want to hang out, be honest and let your friends know that you need some time to de-stress and unwind. Don’t turn money into an excuse for why you don’t want to hang out. It’s unhealthy and makes money seem like an enemy when it should be your friend.

It’s Okay to Spend Money, Don’t be a Scrooge

Money is a tool. It’s meant to be enjoyed. If you scrimp and save but never spend a penny, what’s the point? The saying that you can’t take it with you is so true. It’s important to let your money work for you but you should also enjoy the fruits of your labor. It makes me so sad to hear of people who die millionaires and they chose to live on rice and beans.

Be they big or small, we all have money goals. Once you reach the goals, it’s okay to spend that money!

I can’t stand it when people are cheap and avoid spending ANY money when they clearly can afford it. There’s a difference between a millionaire who drives a beat up used car versus a millionaire who always avoids paying his or her fair share of a restaurant bill.

I don’t think it’s ever okay to take advantage of your friends’ finances. It’s especially in poor taste when you have the financial means to take care of yourself. It’s one thing if your friends want to treat you to dinner. It’s quite another story when you pretend to forget your wallet and make your friends foot the bill.

One of the many amazing things about being financially abundant is that you can use the money to help others. Sure, by all means, treat yourself. But it’s also very fulfilling to treat and help others.

Don’t Equate Net Worth with Self-Worth

You’ve seen the headlines: You should have x amount of money saved by age 30! Your net worth needs to equal 4 times your annual salary! If you haven’t done these things by age 29, you’re behind! While it’s good to have some form of measurement, everyone’s circumstances are different and it’s not fair to compare yourself to others.

You may have a lower net worth than someone else in your same age group but that’s not indicative of your worth as a person. It’s nice to have money, but money is not everything.

Let’s say Amy is 27. She studied electrical engineering and found a job paying $65,000 right out of college. She has amassed a $100,000 retirement portfolio and recently purchased a house.

Now let’s look at Beth who’s also 27. She is pursuing a Ph.D. in electrical engineering. She has $8000 in her savings account and depends on the stipend from her doctoral program to cover her expenses.

Two very different scenarios, right? They’re both 27 yet on paper, Amy appears to be better off. BUT, they are both still young. And once Beth obtains her Ph.D., her earning potential may far outpace Amy.

Same age, different circumstances. Also, keep in mind that cities vary wildly in terms of the cost of living. Amy may make $65,000 but live in expensive New York City while Beth may be on a limited income but live in a small town in the Midwest.

Moral of the story – your net worth is important but it’s the end all be all.

Stop Trying to Keep Up with the Jones

Have you ever seen a friend carry a super expensive purse and felt the desire to buy one for yourself? After seeing your neighbor’s new car did you decide it’s time to upgrade your car? It’s human nature to covet and want things. You can easily get in trouble, however, if you blindly try to keep up with your friends’ spending habits.

It’s okay to want nice things, most of us do. But, you have to evaluate your finances and decide whether you can afford those nice things. It’s also worthwhile to look into what’s motivating you to spend.

Are you spending so that you can keep up with your friends and neighbors? Perhaps you fear being left out if you don’t dress or look like your friends. Maybe you want to one-up your neighbor and show that you make more money by getting a bigger and newer car.

Is any of this worth it? If your spending is fueled by fear of missing out or by competition, you should step back and examine your motivations. At the end of the day, you’ll likely regret your spending because you didn’t do it for you, you did it for other people.

Do you have any suggestions for improving your relationship with money?

Tired of having a toxic relationship with money? Here are 5 ways to improve your financial relationship to help you make and retain more money.