How to Create a Positive Relationship With Your Money

I have literally had the title for this post drafted since mid-February, and am happy to say I finally felt inspired to sit down and finish writing what I had outlined. Ever since I published the post about the biggest lie I’ve ever told myself, I’ve been thinking a lot about the emotional aspect of personal finance. The “one day” lie was full of denial, but that denial came from stress, pressure, wants, desires and a lack of control – and those feelings can turn into repetitive financial mistakes. Even though I’m debt-free now, I still find myself feeling emotional about certain aspects of my finances, including feeling guilty about spending money on myself. As I try to change my own views on money, I thought I’d share some of the insights that have helped me create a more positive relationship with it. In my experience so far, it can be as simple as switching your thought patterns, so you see the glass half-full rather than half-empty. Here are a few examples:

Instead of ignoring your finances, make time for it. It’s easy to ignore your financial situation – until it’s so bad that you can’t. To prevent that from happening, schedule an hour each week (preferably on the same day and time) to sit down and think about nothing but your finances. If it helps you relax, turn on some music and make a cup of tea or whip up a snack. After your first few sips and bites, log into all of your online bank accounts and pull out any receipts you kept, so you can write down where your money went that week. For the first few weeks, I’d suggest writing down each of your purchases on paper, so you can really look at what you spent your hard-earned dollars on. As you look at the list of expenditures, ask yourself how you feel about each purchase. Were they all necessary? Were any dollars spent on impulse buys? Are you happy with any/all items you bought? Is there anything you would’ve done differently, after looking at an entire week’s worth of purchases? When you’re done with expenditures, write down any amounts you put towards debt repayment or your savings goals. If you’re happy with those amounts, pat yourself on the back. If you’re not, take the time to think about what you could’ve done better, what your financial goals are and how you can move towards them. Before your finance hour is up, make at least one financial goal for the next week. Then log off, put your notepad away and get back to living your life.

Rather than worry about your financial troubles, map out your financial goals. This one is still tough for me, but I’m really trying to change the way I think about my current financial situation. At any given moment, you could start thinking about how bad your finances may seem. You could be holding the weight of a massive debt on your shoulders, the stress of how to pay for school, or the lack of savings or even the thought of how you’ll make it until your next payday. It’s easy to understand why people feel trapped by these financial burdens. However, with a little planning, it’s also easy to switch those concerns into hopeful thoughts. For example, if you have $10,000 of debt to pay off and it stresses you out daily, you can do a simple calculation to turn that stress into a goal. Ask yourself how many months you’d like to pay off that debt within: 18 sound good? Divide $10,000 by 18 and you can see that it’ll require a minimum debt repayment of $555/month* to turn that financial stress into an accomplished goal. Of course, you’ll need to make sure that number fits into your monthly budget. If it does, then the next time you feel stressed about that debt, simply ask yourself if you’ve made your $555 payment that month. Yes? Good – you’re working on your goal and that’s what counts. No matter what your financial goals are, I would also suggest celebrating small milestones along the way. Mini celebrations can be extremely motivating.

*Not including any interest that accumulates during that time.

Instead of worrying about looking/sounding stupid for asking “dumb” questions, get excited about learning something new. This one is probably the easiest for me to relate to, because I’ve shared all kinds of stupid mistakes, thoughts and questions here – but I still worry about sounding dumb. (Seriously, I’ve been holding back on writing that post about my rewards card ordeal I mentioned a few weeks ago, because I’m scared it was my mistake!) Unfortunately, the longer you live in the dark about something because you’re too scared to ask a question, the more mistakes you could be making because you don’t know the answer. For example, a couple months ago I had coffee with Steve and I asked him some seriously basic questions about investing. And guess what? Not only did Steve not treat me like I was dumb, he educated me! His answers, and some tweets back and forth afterward, helped me decide on a new portfolio to move my RRSPs into – and I was so excited to put in the paperwork and make that happen. After that, I felt confident in my decision to open a self-directed TFSA, and now I’m reading up on stocks and ETFs. I’m nowhere near ready to touch those, but I’m inspired to learn – and it started by asking a few questions. If you don’t understand how a financial product works, ask someone who might. The chances of them judging you for not knowing are extremely slim, because they didn’t understand it once either. And I have yet to meet someone who doesn’t want to share what they know about personal finance.

If you look at the words I underlined, you’ll see that to create a positive relationship with your money, you need to: make time for it, map out your goals and be open to learning new things. Once you’re in the routine of that, you just might find that you actually like thinking about money and all the different ways you can make it work for you.

  • This is SO true. Many people wait till it’s too late to think about their finances and end up in the red. Money management should be taught in high school so people are better prepared in life to manage their money.

  • Thanks for the post. I know that everyone always talks about personal finance being personal, but it’s really hard to separate out the emotional side of it. I have always liked your goals posts and I am going to do those from now on to keep me on track.

    I really liked your example about the debt repayment and working towards it. Because it doesn’t feel very rewarding when you throw that money on the debt and it doesn’t drop much. But over time, the progress will be there. Little by little.

    • You mean my monthly goals? Or just any post I’ve written about setting new goals?

      It’s really hard to stay motivated w/ debt repayment when you only see a fraction of it disappear each month… but you’re still working on paying it down and that’s what counts. It’s all about being mindful of your actions. :)

  • Instead of ignoring your finances, make time for it

    I have never been terrible with money but I went through a period where I just didn’t think about it and didn’t save, spent on whatever I wanted, etc. As soon as my then girlfriend(now wife!) and I sat down, made time on a semi regular basis to talk about it (and map some goals) my financial reality improved. Started spending less, saving more, and being happier (and not sacrificing my social life at all) It is mazing what just paying attention to your finances will do long term.

    Obviously the goal mapping thing is preached to us over and over, but yet most people are still lacking on it. And education is key!!!! I am often appalled at the level of financial literacy amongst friends, colleagues, acquaintances and it is often because questions are not asked. What is very simple to one person is not at all to the next!

    • “What is very simple to one person is not at all to the next.” I think that’s where information sharing becomes so powerful. Even here – I write things that sometimes seem like common sense to me, but I know aren’t to others. But then people will comment and whip me into shape by educating me on something new – and I love it! If we were all a little more open to talking about money, bank products, interest rates, savings techniques, etc. I bet we’d all have a little more money in our pockets!

  • Changing attitudes about money is so important! The more it represents something negative or secretive, the harder it is to manage it in a positive, proactive way. Good post!

  • Great tips, Cait. I really like the wording of making time to focus on your finances. I often write that people should set aside time to work on finances each month, quarter, and year, but the way you worded this makes it sound and feel more like taking time for yourself to do something important in your life. Kind of like giving yourself a gift since it’s something that would lead to a better future. A very important shift of thought! From now on when I’m doing my budget I’ll ditch the spreadsheet and embrace candles, Pandora, and paper to help it feel more like I’m doing something for myself and not something because I have to.

    • Yes! Even I could use to put away my spreadsheet sometimes and just sit and think about whether or not I’m happy with my finances overall. Like when I felt guilty about spending money on myself, someone suggested I create a “me” account that’s full of money I can spend freely – that idea is brilliant! No guilt = a more positive shopping experience. Another good lesson for me. :)

  • Loved this post! I think you’re absolutely right – you have to make time for your finances in order to get everything straightened out, and then to keep up with things and make sure you’re doing what you need to do in order to reach your financial goals.

    • And try to have a little fun with it! I know I had some pretty dark days when I was paying down my debt… but milestone celebrations helped, as did positive reinforcement from family, friends and readers. Thanks for your comment, Laura!

  • Money is power. Period. That’s what I tell myself to force myself to deal with it. Do I want power over my future? Yes! Therefore, I must face my fears and my dislike of all things money, and get serious about my future. Money is power.

  • It’s so true about taking time, ignoring a problem only makes it worse. I love going over financial stuff.

    After reading a lot of blogs about people in relationships who clash when it comes to finances and their spending styles, I feel lucky everyday I’ve found a very laid back guy who’s happy for me to take the reigns with our money. I genuinely enjoy organising everything and he’s genuinely happy to not have to think about it lol. He has a basic idea of what’s happening but at the end of the day he just likes to know what can be spent. I’m sure I can be bossy sometimes, but he’s happy knowing we’ve prepaid a week in Paris in Jan and Cancun in March!

  • So I’ve been on vacation on the island for the past 2 weeks and I’ve been dropping in to monitor my blog (but not actually work on it) and I noticed today this spike in visitors which I thought was weird. I eventually figured out that it came from your post today. Haha thanks for the mention Cait!

    I’m humbled I was able to provide any kind of useful knowledge when we’ve chatted. And our chat about mutual funds and Coast Capital vs ING mutual funds got me to learn a bit more on the ING funds and led to us also choosing the ING funds for one of our RRSP accounts!

    • Woo hoo! That’s awesome. I ended up going with the Balanced Growth Portfolio, which I’ll blog about soon… but anyway, was happy to move my money over to it!

  • Save yourself a bunch of time and use an app like Mint for tracking all your accounts. I can’t imagine gathering bits of paper and entering them into a spreadsheet on a regular basis: an hour a week seems like way too much time to me. The less difficult it is the more likely you are to do it!

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