No matter how you slice it, money is emotional. We inherit our position toward money through our past experience. At an early age, we begin interpreting signals from our parents and caregivers about finances. In some homes, money is celebrated — the ultimate goal in life. In others, money is despised.
Some of us grow up during difficult economic times. We learn to put back money out of panic, fearing we will run out. Others face the challenge of parents who used spending as a coping mechanism. When there was an occasion, they spent money to celebrate. When things weren’t going so well, spending became a way to feel better.
For better or worse, most of us come into adulthood with money baggage. Our finances can be a major source of stress in our lives. So when you begin to wig out about money, pause and make sure you work through these steps.
Get a Clear Picture
Many money worries are rooted in an unclear picture of reality. Poor habits further complicate the issue. Begin by gathering all of your accounts into one place. Don’t just focus on what seems like a too small balance in your checking account. Make sure you fully understand how much money is in your retirement accounts and other savings accounts. If necessary, go around your home and collect change. Resist the temptation to bury your head in the sand.
Rework Your Budget
Simply put, to make your personal finances work you need more money coming into your home than flows out of it. If you feel unsure about your financial future, you may need to retool your budget. If you’ve never established a budget before, now is the time to start. In order to obtain breathing space, or margin, in your finances you’ll likely need to reduce spending. Cancel magazine subscriptions. Cut the cable. Scale back on dining out. Do whatever it takes to release the pressure.
Get Outside Help
You may need a third party to help you sort through your current situation. Be sure you ask someone who is successful with their household budget. You don’t need advice from a broke person. If you’re not sure who to talk to, head to your library and check out books on personal finance. Or scan websites online for ideas. Odds are good your current plan isn’t working. Find someone smarter than you to help you sort it out.
Build Emergency FundS
Most Americans don’t have an emergency fund. So if you don’t yet, you’re not alone. However, we all know that it’s never a question of if unexpected expenses will pop up but when. Saving can feel daunting though when you’re already stretched to your limits. Rather than getting overwhelmed by the seeming impossibility of building an emergency fund, start small.
Gather the change from your car and around your house. Look for items to sell online. Fight the urge to spend unexpected funds like birthday cash or bonuses until you fill that fund. Usually $1,000 to $2,000 will cover typical emergencies like car repairs, replacing appliances, or paying for dental work. Do everything you can to put back that money as quickly as possible.
Tell A Close Friend
Money problems bring with them guilt, shame and embarrassment. Social situations often amplify these emotions along with financial stress. We feel we can’t say no to going out to dinner or even on a weekend getaway with friends or family.
You need to share with close friends exactly where you’re at right now. Not only will this reduce some of the invitations you receive to spend money you don’t have, but you might alleviate some of the negative emotions, too. Having someone in your inner circle you can trust will bolster your journey. You can ask that person to help you stay on track when it comes to spending and saving. When you’re down, you can ask for a word of encouragement. Together, you can find ways to spend time together that don’t involve spending money.
Track Your Progress and Celebrate
No one loses two dress sizes overnight. Committing to our physical health takes time and intentional effort. In the same way, no one corrects money mistakes instantaneously. Instead of being overwhelmed by the what-ifs and the not-enoughs, begin setting small goals that you can achieve in a limited time frame. Whether you keep a running tally of your positive choices on a note in your phone or post a statement on your refrigerator, create a visual to track your progress.
When you complete your financial feat, celebrate. Don’t go overboard financially, though. In fact, see if you can find a way to mark the success without money at all.
Count the Good
Most of us default to the negative. We notice what we don’t have. We make wish lists of what we one day hope to buy. Rarely do we look around our homes and see the great bounty that surrounds us. Clean running water, electricity, heat, blankets, and the ability to wash our clothes without taking them to a river — these are good gifts. Food in the refrigerator might not be a gourmet meal on the town, but still provide the sustenance we need. Then there are the blessings in our lives that can’t be purchased with money — friends, family, laughter, kindness.
Rather than the anxiety of insecurity about all you don’t have, root your thoughts in what you already have. Sure, a gratitude list won’t fix any problems you have with money in the here and now. However, it may provide the proper focus for you to begin working through the problems you do have.
In the end, if we truly believe money will fix our problems, we’ll never have enough. Money is a tool, a neutral substance. A tool can be used to construct a home or a tool can be used to demolish a home. Begin making small choices to build rather than tear down your life with money. Focus on what you can do instead of what’s out of grasp. Daily decisions can alleviate or add to financial stress. Choose healthier habits today.
