02 Mar 4 Strategies to Improve Your Relationship with Money
Clearly, nurturing your relationship with money can lead to improved health, less stress, and the peace of mind you need to show up optimally for all the other relationships in your life. “Not to have to spend mental bandwidth every single day stressing about money is huge,” says Erin Lowry, a personal finance expert and the founder of BrokeMillennial.com. “Our brain only has the capacity to handle so much in a given day, and if there are a lot of different factors that are stressing us out, including money, that’s going to keep us from living up to our full potential.” To help you reap the well-being benefits of reducing financial stress, here are 8 strategies that can transform your relationship with money in 2020 and beyond.
Recognize when spending money is a well-being investment
While it’s normal to go through times when tightening your finances is in order — or, as Lowry calls it, living off of a “bare-bones budget” — not knowing where to cut back can be stressful. Lowry cautions against getting rid of everything you need to support your well-being. For instance, “if mental health is something that you struggle with and you see a therapist or take medication, those costs should be considered a part of your bare-bones budget so you don’t have to go without them,” says Lowry. “Maybe you talk to your therapist and say, ‘Normally we meet weekly. Can we go down to bi-monthly sessions, or even once a month, just while I’m in this financially stressful period?” Whatever adjustments people make, it’s important that they still have their support system in place, adds Lowry.
Trade “convenience spending” for “joy spending” or “sanity spending”
Oftentimes, people fall into a trap of convenience spending, says Dorsainvil. This is when they make a habit of spending money on things that make life more convenient — even if those things don’t make them any happier. One example: Taking Ubers regularly, when you could (almost) just as easily take public transportation. Or buying lunch everyday because brown-bagging a meal to work seems like more of a drag. Dorsainvil recommends asking yourself if you could trade some convenience spending for spending that actually brings you joy. “Travel is very important to me and my husband, and not only travel, but international travel, especially where we can’t take our computers,” says Dorsainvil. “If we’re not able to achieve that goal, which keeps us sane, then we need to look at our spending and see if there’s any convenience spending that’s stopping us.” That thinking is in line with the research — including studies from Professor Thomas Gilovich at Cornell University — drawing the conclusion that happiness is derived from spending money on experiences, not things. Ultimately, spending money on an experience — whether it’s travel or something else that aligns with your values — may bring you a greater well-being boost than doling out funds for something inconsequential.
Don’t keep financial secrets
With the exception of a completely unexpected layoff, most people have an inkling that a financial change or hardship may be on the horizon, says Lowry. “Often people hide that information because they’re embarrassed.” They even hide it from their own partner if they’re in a relationship. “But having an open, honest dialogue is going to take so much stress off your plate, because the two of you can be a team about it,” says Lowry. Ultimately, “learning how to communicate well about money is one of the best things that you can do for the longevity of your partnership, because money tends to be one of the number one stressors in a relationship.” And if you’re not coupled up, “find a person you trust who you can talk to about what you’re going through financially, because sitting on money angst alone is so stressful,” adds Lowry. What’s more, opening up to others and hearing their woes will help you realize that other people go through financial tough times too. “It’s not just you.”
Face the numbers
Sometimes the stress people live with comes down to being in a constant state of financial ambiguity, says Lowry. “We don’t really pay attention to what the full scope of the problem is because it’s scary.” But when it comes to money, ignorance is not bliss; it’s important to confront your situation head-on. This isn’t about creating a budget (yet), says Lowry: It’s about taking stock of every balance you’re carrying and loan you owe — credit card balances, car loans, student loans, mortgages, etc. — and writing that information down, along with the minimum amount due each month. “You can’t begin to make a realistic plan or a budget without knowing all of the details of your finances,” says Lowry. While this may feel hard at first, you’ll likely notice a huge emotional burden start to lift once you’re empowered with true clarity on your situation. And that emotional lift can have big payoffs on your overall well-being.