Is your relationship with money holding you back?
Do you wish to make improvements in your relationship with money to realise your financial goals?
If your answer is yes, then you’re in the right place.
You’ve just realised that money is very important in your daily life.
This means that how you relate to your money is also very important.
There are a lot of emotions and opinions around money.
Some people have an amazing relationship with money, while others just don’t relate well to money.
If money is making you miserable, then this article is for you.
I will go over what influences our relationship with money as well as the ways to improve your relationship with money so that you can be more comfortable around it.
Having a good relationship with money is very important and I’m here to prove it.
What Influences Our Relationship With Money?
Money is an emotional subject for everyone. How we relate to money is influenced by these factors.
Life-altering situations make you develop an attitude, behaviour or mentality towards money
For example when you ran out of money and you had to buy a smaller house from a bigger one.
You will tend to be anxious about money and have the scarcity mindset that money won’t always be there and you’ll have to downgrade each time.
Say you have a frivolous or carefree personality; you’ll always want to splurge or impulse buy compared to someone who is more reserved about money.
Your childhood experiences
This is also a huge factor that influences our relationship with money.
Growing up, if you saw your parents always fighting about money then it shaped your relationship with money from this young age.
Some people are anxious about money, others avoid money, others worship money and others have an abundance mindset towards money.
Where do you lie?
What’s a Healthy Relationship With Money?
Just like in health and fitness, there are some money tendencies that are unhealthy, weak and downright bad.
If you want to know if you have a good relationship with money then you are either spending money based on your values or you have low or reasonable debt.
You are also able to save money to meet your goals and you have a safety net such as an emergency fund.
All these show that you have a healthy relationship with money.
If you want to improve your relationship with money, ok the next sub-topic, we will go over the different ways to improve your relationship with money today.
Top Tips for Improving Your Relationship With Money
Here are the top 18 ways to improve your relationship with money today.
- Get to know your financial values
What do you think about money?
How do you feel about money?
This is the first step toward improving your relationship with money.
Be honest with yourself.
The first three emotions that pop up when you think about money are your current financial values.
You may be thinking, money is hard and it doesn’t come easy to you.
Or you may think that you do not deserve money.
The thing about negative financial values is that they sabotage your chance for a better relationship with money.
It is very important to know what your values are if you want to improve your relationship with money.
- Review your current financial situation
Another way to improve your relationship with money is to know where you stand in your finances.
Has your financial progress gone down or risen up?
If you do not know the answer to this, then chances are, you do not have a good relationship with your money.
You cannot evaluate your current financial position because you do not have much to work with and you probably don’t even care.
You are either too anxious about it or you avoid negative trends with your money.
You need to start tracking your financial progress every time you receive an income raise so that you can improve your relationship with money.
- Have a budget
Budgeting allows you to create a spending plan for your income.
When you budget, you will create a list of all the important bills you need to pay for and you will also avoid working outside the budget on things that you do not need.
A lot of people have said that budgeting has really helped them to improve their relationship with money.
They understood themselves and they eliminated unnecessary expenses and debts.
If you are not budgeting your money, then you will always live to complain about how much of a bad relationship you have with money.
- Set clear financial goals
This is another way to improve your relationship with money.
If you do not have any goals with your money, you will be exhausting all your income before the next month’s salary because you do not have something tangible you can put your money into.
You have to establish your money goals if you want to have a clear financial path and improve your overall relationship with money.
What goals do you want to achieve with your money?
Do you want to save?
Do you want to buy a bigger house or a new car?
Do you want to invest your money or pay off some debt you owe?
When you have money goals, you will have a better relationship with money.
- Avoid keeping up with the Joneses
I’m told that your spending is influenced by 3Fs (FOMO, Friends, Family).
Is your FOMO (Fear of Missing Out) mentality making you have a bad relationship with money?
Are your family and friends always asking you to go out on expensive dates you cannot afford?
If your answer is yes to these questions, you need to reevaluate yourself.
Keeping up with the Joneses is another pandemic that has gripped the hearts of many people in the world.
You cannot save or invest because you have been caught up in the lifestyle creep.
You have to rely on your next paycheck to give you the temporary high of extravagant life, to your own detriment.
If you want to improve your relationship with money, you need to stop keeping up with the Joneses.
- Pay your debts
If you are surviving on borrowed money or you are strapped in debt, you need to come up with a plan to pay off your debts in order to improve your relationship with money.
Having debt is frustrating.
You may find it difficult to pay off your debts because of the high-interest rates.
This will in turn affect your relationship with money.
You will always think that money is not enough.
You may also be anxious about money because you are always thinking about how to juggle all your other expenses.
Your relationship with money will only improve once you start to pay off your debts.
You will be much better and more relaxed with your money.
- Create a plan for your finances
A financial plan is a statement that evaluates your current financial situation and long term monetary goals as well as the methods you are going to use to achieve these goals.
If you want to improve your relationship with money, then you have to have a financial plan.
There is no formula to anything.
I’ll tell you one thing: you cannot afford to be spontaneous with your income.
You need to have a plan on how you are going to use your current income in relation to your long term financial goals.
You also have to look for strategies that will help you live up to your financial goals and have an improved overall relationship with money.
- Start saving and investing
A lot of people love the idea of saving and investing their money, but very few people actually do it.
If you are not saving or investing at least 10% of your income every single month, then chances are you are having a bad relationship with money.
You could either be paying off expensive bills or you have poor financial habits that cannot allow you to put some money aside to secure your financial future.
If you are not saving or investing your money, you are really treading dangerous waters.
If you want to learn how to save, start reading financial books or work with professionals to give you a good head start.
Always remember, if you want to improve your relationship with money, then you have to save and invest in the right areas.
- Surround yourself with people who think positive thoughts about money
If you want your relationship with money to improve drastically, you need to choose your friends carefully.
There’s someone who said that you are the average of the 5 people you spend most of your time with.
Now, look at your friends.
In terms of finances, who has a better relationship with money?
Who is responsible for their money? What is their overall money mindset?
What are their financial habits?
Study your friends’ habits and see how they are affecting your relationship with money.
If none of them is where you want to be, then you can minimise the time you spend with them or change your mindset.
Surround yourself with like-minded people.
Avoid partying and eating out every time. Live within your own means.
Self-restraint is a very important trait if you want to improve your relationship with money.
- Talk about money
Money is still a topic that is shunned by many people in society.
No one likes to talk about money. You cannot just walk up to someone and start a casual conversation about their financial situation.
Many people don’t even want to disclose what they are earning.
The truth is, if you talk about money, you get comfortable around it.
You share different ways to improve your spending habits and manage your finances better.
If you do not talk about money, how will you improve your relationship with it?
- Only cater to what’s important.
When you go out and buy very big-ticket items without planning for them in advance, then watch as your relationship with money gets worse.
You only need to cater to what you want and need.
Avoid overspending and making impulsive purchases on expensive items.
Things like cars and houses are not things that you buy on a whim.
You have to plan and save for it before you go out and buy them.
Buying large expensive items based on emotions will lead to a bad relationship with money.
You will end up being strapped in debt that is going to be difficult to get out of.
Avoid impulse purchases and try to make a list every time you go out shopping if you want your relationship with money to improve.
- Evaluate and track your spending habits
This is another way to improve your relationship with money.
If you cannot give an account of where your money has gone to at the end of the month, like putting your finger on something tangible that you have done with your money, then you will have a bad relationship with money.
You are also not alone. A lot of people are participants in this.
You can break this habit by starting to track your expenses and know how much money you are spending in a week or month.
You will be shocked by the results, but it is going to be worth it because you will know how to avoid your bad spending habits and improve your relationship with money.
- Change the way you think about money
We all have some mindsets that we need to change about money. Whether it is an anxious, avoidant or overabundance mindset.
These things are detrimental to your relationship with money.
They will influence how we think, feel and use our money.
If you want your overall relationship with money to improve, then you need to change the way you think about money.
- Don’t stress the small stuff
Stop worrying about making small purchases here and there.
A lot of us worry too much about money on things we should actually not be worrying about.
People who worry too much about money do this because they are always concerned that they are not going to have enough.
They will spend the rest of their days calculating bills and trying to hold on to as much money as they can.
You have to know that money comes and goes.
The more you hold on to it, the more you will not be able to use it on things that really matter.
If you want your relationship with money to improve, avoid stressing the small stuff.
- Get reacquainted with your debt details
How much money do you owe?
What are your credit balances?
What are the interest rates on the debts you have?
When you become aware of your debt details, it is easy to come up with a plan on how you are going to pay them off. Nothing gives people relief than paying their debts.
If you have a healthy relationship with your debts, you will also improve your relationship with money.
Get reacquainted with your debt details and make the necessary steps that will help you improve your overall relationship with money.
- Make a point to be aware of and experience simple life pleasures
If you want a good relationship with money, make it a point to budget for fun so that you can experience simple life pleasures with your money.
You have to pay because you deserve it. You do.
After putting in so much hard work and effort you need to pay yourself to keep yourself motivated.
If all your money goes to expenses and saving and investing, without leaving out some money for you to relax, you will feel some type of resentment towards money.
When you budget for fun, your relationship with money will improve.
- Acquire financial literacy skills
If you want to improve your relationship with money, then you need to learn more about personal finance.
Financial literacy is a very important life lesson that is sadly not taught in the traditional schooling system.
If you want to understand how money works, then you have to invest your time into gaining some financial literacy skills.
Start with the basics and gain the necessary knowledge and understanding of various topics in personal finance such as saving and investments.
Get into the habit of familiarising yourself with these financial matters if you want to achieve financial freedom and improve your relationship with money.
- Have an emergency fund
An emergency fund is a money that you set aside to act as a cushion in a situation where you lose your current source of income.
This money is going to help you live off a given period of time until you get back on your feet.
Think about this for a moment: if you lost your job today, what would be the first thing you do?
If the first thing you think about is moving to a smaller house from the house you are far from achieving financial success.
You have to have an emergency fund that will last you 3 to 6 months to pull yourself back up.
Life happens. Your business may fail, you may lose your job or go through pay cuts.
You have to know that you are prepared when and if this happens.
Get into the habit of saving part of your money as an emergency fund.
You will improve your relationship with money this way.
What are Some Unhealthy Relationships With Money?
The following are unhealthy relationships with money and they include:
Instead of being a money worrier that chases opportunities away, have and develop an abundant mindset.
One way to develop an abundant mindset is to find opportunities to make money daily. or weekly.
If money keeps flowing to you daily or weekly, you begin to affirm that truly money flows easily to you.
Guilty spenders cannot spend money on themselves or on anything they need.
These guilty spenders complain or nag at you to forego that dress even if you need it and is a reward for your hard work.
The guilty spenders believe money is scarce and using it doesn’t come back until you struggle to get it.
Immersing yourself in debt using credit or debit card debt signifies your unhealthy relationship with money.
Start paying debt first, learn how to budget to pay your debts.
Those spending their money to feel good have an unhealthy relationship with money, an example is retail addicts.
Do you find yourself making an excuse to overspend your money?
You can overspend money if you can afford it but borrowing to spend shows an unhealthy relationship with money.
Refusing to talk about money.
Money talks make people cringe.
I love normalising money talk with my friends and my kids.
Why? Because avoiding money talks means you have hidden secrets or debts you don’t want to uncover.
Every time you talk about money, you can hear the lion roar in the forest from miles away.
Normalise money talk as you talk about love and sex.
Saying things like, ”Money is evil”, Money surely changes people shows your unhealthy relationship with money.
Money isn’t evil, people are.
Money doesn’t change anyone, you either refused to change or your friend embraced new one-stop accusing others of changes you refused to make in your life.
Has your friend ever invited you to dinner or night club and you’re down to your last cent?
I was invited almost 20 years ago to go on a shopping spree. Along the way, my money got stolen, I only had 1000 shillings.
My friend thought I lied to her about the theft, she announced to everyone how much of a beggar I am and others MUST avoid me when it comes to shopping.
This is how you demonstrate your unhealthy relationship with money.
You’re scared of being left out, you know you don’t have the budget for those nice shoes, hair, nails or clothes but you still go-ahead to borrow from your friends.
Turn down these invites let your friends gossip about you, it’s not your problem but theirs.
Types of Relationship With Money
According to CNBC (There are 7 Money Personality Types), they include
- Compulsive saver
2. Compulsive spender
3. Compulsive moneymaker/investor – these are the billionaires and multi-millionaires
4. Indifferent to money – believe money is evil
5. Saver splurger – they save then spend aimlessly
6. Gambler – risk-takers/thrill-seekers
7. Worrier – think they will lose money.
Lack confidence in their ability to achieve financial freedom.
Worriers obsess over what will happen if they lose money.
Ask yourself where do your money worries come from to help you achieve financial freedom.
FAQs on Ways to Improve Your Relationship With Money
- Why is it important to have a good relationship with money?
It’s important to have a good relationship with money so that
You learn how to plan your money
A positive attitude helps you strengthen your relationship with money
Acknowledge the things money buys for you
Admit you have a poor relationship with money
Have people that have a good relationship with money
Have expert advice on debt, investing and saving.
2. How can money affect your relationships?
The following are ways money affects relationships:
Attract fake friends
Cause depression and anxiety
3. Should I marry someone who makes less money?
Yes, you can marry someone who makes less money as long as they’re ambitious.
If you’d had a love-hate relationship with money in the past, or up till now, you are not alone and it is not too late for you to get things back on track.
Having a good relationship with money comes down to the thoughts and feelings we have towards money. Money is always going to be around.
It is a necessary tool so you need to know how to get past the moments when you are not necessarily seeing eye to eye with money.
Financially successful people had to start from somewhere when it came to improving their relationship with money.
No one is born knowing these things.
We all have to learn.
The more work you do to improve your relationship with money, the closer you are to improving your financial progress and realising your financial goals.
Money is a tool – a resource to help you spend or use the money on things that enhance your quality of life.
If you love travelling, spend money on getting travelling experiences.
See, a hammer, for example, you use a hammer for nailing down sticking out nails or pulling out nails.
That’s what money is for.
Don’t use the money to condemn or ”squeeze/kujifinyilia” that you can never afford a dress/suit for yourself.
In fact, this habit of kujifinyilia leaves you more broke every day/month.
What’s your relationship with money? How do you use your money?
Have you ever said phrases like, ”Money is evil?”.
I’d love to hear your thoughts on what your relationship with money looks like.
Remember, you have to work on your money mindset – the more you work on your money mindset, the more you change your relationship with money and the better your life becomes.
Improving your relationship with money means abundance and afford to pay for experiences money buys.
Improving your relationship with money helps you discover things about yourself.
Just know that developing a good relationship with money takes time and effort – you have to keep working on your money mindset daily.
What’s your relationship with money? How do you use your money?