Everyone has their own relationship with money, but oftentimes money is a source of stress and anxiety. Debt, financial instability, lack of financial literacy and other money-related obstacles can feel overwhelming. The bright side is that with the right mindset, you can improve your relationship with money. A good relationship with money can influence you to create good money habits and make healthy financial decisions.
Below are 6 tips to help you improve your relationship with money and your financial well-being.
1. Know Your Money Story (or “Money Script”)
Your money story is your personal narrative about money. Your money story consists of your beliefs, thoughts, feelings and habits around money. Often, these stem from childhood and other past experiences and encounters that involved money. Once you identify these aspects of your money story, it’s important to dig into the why. For example:
- Are you very frugal? If so, is it because your parents were? Or have resources always been scarce?
- Are you a good saver? If so, where did you learn to save?
- Do you avoid budgeting? Why do you think this is?
Uncovering and understanding your money story is a process. However, the more awareness you bring to your relationship with money, the more you’ll be able to challenge any areas that aren’t serving your financial journey.
2. Create a Budget / Track Your Spending
One key to improving your relationship with money is to track how it moves in & out of your life. If you aren’t already budgeting, assessing your cash flow is a good start. You can do this by looking at last month’s bank statements and credit card statements, or by tracking your expenses for 1 month. Once you know approximately what comes in and out on a monthly basis, you can create a budget that allocates your money in a way that supports your lifestyle. Being in control of your money in & money out will improve your relationship with money over time.
3. Set Financial Goals
Setting financial goals is a great way to improve your relationship with money. While most of us can agree that money isn’t the only important thing in life, shifting your view to see money as a tool can help you establish a pragmatic approach to it. Setting financial goals can help reduce your emotions surrounding money and help you focus on what you can control. When you understand what your goals are, you’ll have greater motivation to approach those goals from a strategic standpoint.
Start by creating a list of your goals that require money. Your financial goals can be immediate or long-term. Some might feel more realistic and others might feel very far off. For each goal, write down or reflect why this goal is important to you. Then, create a timeline and specific actions you can take towards each goal. By setting financial goals and creating an action plan, you’ll reinforce the idea that money is a tool that you can use to your advantage.
4. Learn Personal Finance
Improving your relationship with money requires personal finance education. Make the effort to learn the basics of personal finance because it’s a skill that will benefit you for the rest of your life. There are many books, videos, courses, and other resources available to help you learn about personal finance as well as more advanced topics such as investing. With better knowledge about personal finance, you’ll be able to make more informed decisions about your money. Check us out on Wealth for Women of Color’s TikTok!
5. Focus On What You Have
To improve your relationship with money, remember to appreciate what you do have. When you only focus on what you don’t have, you stay in a scarcity mindset. Shift from a place of scarcity to a place of abundance by focusing on what you currently have and expressing gratitude for it. As simple as this is, it can contribute to your overall financial well-being.
6. Get Professional Support
There are all sorts of financial professionals who can help you with your finances. In addition to financial planners, financial advisors, and financial coaches, there are also licensed financial therapists who can help you improve your mental, financial, and relational well-being. While it may cost money to get financial support, sometimes it’s necessary to help you advance in life.
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As you can see, there are many different approaches to improving your relationship with money. By making adjustments to your mindset and your money habits, you can improve your financial well-being.
