How to Utilize Your Relationship with Money

After months of contemplating a home remodel and mulling over paint samples and carpet swatches, I decided to take the plunge. As anyone who has completed a home remodel knows, starting budgets end up looking more like more rough outlines than reality. One project creates another project, and unforeseen structural issues can bleed money quickly. Throw in little mishaps here and there (like a bad appliance install breaking your pipes) and stress can skyrocket fast. Between that and three months of living in chaos, anyone's nerves can get rattled. But did I mention I also live with extreme money anxiety? Fear has been the cornerstone of my relationship with money ever since I earned my first paycheck. Even though I diligently saved, I would go through an intense internal struggle every time I needed to use it. The more I earned and the more I saved, the more I enabled my account balance to determine my feelings of security. Fast forward ten years. My previous panic of paying for textbooks is compounded over much larger purchases, such as those needed for a home renovation. It became clear to me that I needed to become mindful of my relationship with money. Otherwise, my anxiety could threaten to take over my decisions and my entire life. The good news is, being mindful isn't just about keeping bad habits at bay. It can also help me find ways to use my money anxiety to my advantage. Regardless of your relationship with money, it is possible to shift the tides. There are always ways you can use your money relationship to your advantage. Let's talk about how.

Take a Deep Dive into Better Understanding Your Relationship with Money

Fear might be the first word I use to describe my relationship with money, but the relationship is much more dynamic than that. In fact, some aspects of my money relationship are quite positive and serve me well. Here are areas in which I know I excel:

• Planning for the future
• Living within my means
• Making well-informed money decisions

While living in a constant state of fear is not healthy, a small dose of it can help in making sound money decisions. The fear prevents me from making rash decisions - it forces me to do more research before I buy. In a Psychology Today article, Kelly McGonigal, Ph.D. explains,

“...primitive fear instincts are as important for self-control as the higher power to override instincts. Many of us let fear get in the way of long-term goals, and that’s not good. But it’s a mistake to think the solution is to overcome fear in general...We need our instincts to let us know when something is wrong -- an immediate emotional evaluation that is even more powerful than reasoning and logic.”

So what if you have an abundance money mentality? This mentality presents its own bright spots:

• Taking money risks that can result in greater wealth
• Recovering mentally from money setbacks more quickly
• Spending on necessities early, before they become a bigger issue

Money can be overwhelming - even more so if you allow your mind to run rampant with worry. Someone with an abundance mentality can capitalize on their ability to see money as fluid. What the abundance mentality understands is that there is a viable solution to money setbacks. And that can be used to finding the solution instead of worrying about the problem. How can your relationship with money serve you? Understanding how your money relationship plays out in decisions can help you find solutions to any money challenges you face.

Creating a Customized Plan to Fit Your Money Relationship

Many money experts stress the importance of tracking every penny that leaves your account. This means making note of every cup of coffee, every gas station stop, every meal. For some, this is a great way to stay on top of the small expenses that can add up fast. For me, this is a trigger for anxiety. If I’m watching every single dollar, I would try to stop spending cold turkey. But that's not going to work in the real world. This type of tracking doesn't work well with my fears or needs. Therefore, it doesn't work with my relationship with money. Instead, I take a big picture approach. A few times a month I check on my investments, my savings goals, and my transactions. Since I naturally keep my daily spending low, it's easy enough for me to keep this to a monthly habit. Not getting lost in the cost of every cup of coffee gives me the mental power to tackle long-term planning. Let’s say you have a money personality that makes you avoid money talks and tasks altogether. Tracking your finances on a daily basis is probably a tall order. It would be like asking a new runner to complete a marathon in a week. In fact, the task would be so large that you'd be more likely to avoid it than anything. Instead, you might want to capitalize on services that automate your finances. This could include:

• Placing bills on autopay
• Using a personal finance app to stay on top of your budget

Now let’s take a look at another type of money relationship, that of a money worshiper. The money worshiper is someone who spends a great deal of time in the pursuit of money. If this sounds like you, tracking every single expenditure could destroy your interest in money management. After all, your interest lies in earning more, not spending less. Your money management tools might look something like this:

• Looking into a service like Betterment to focus your energy on growing your wealth in an easy to manage way
• Using an app like Empower to set long-term goals and track your net worth

The Bottom Line

It might seem as if certain money relationships are better suited to making sound financial decisions than others. However, money management is rarely that straightforward. Each type of money relationship has its strong suits and its setbacks. Rather than trying to change your relationship with money, learn how to use it. Once you become better acquainted with your money relationship, you can use it to your advantage. Money can be a highly emotional subject. It’s time to replace one-size-fits-all thinking with a plan that works for you. And utilizing your money relationship is a great place to start.