Improving Your Relationship With Money

The past few years have been pretty rough on many Americans. The Covid pandemic stretched longer than anyone expected. Jobs were lost. Schools and daycares closed for months and parents are still feeling the impact of some 58,000 fewer childcare workers. A war rages on in Europe and was a factor in inflation spiraling to 40-year highs last summer. Recession fears remain, even as unemployment reached a 53-year-low in January.

Financial Worry Continues

It’s no wonder a majority of U.S. working adults reflected that worry in a survey conducted late last year. New research from The Hartford in November of 2022 found

63% of U.S. workers say their financial stress increased during the past year.

56% – reported that financial stress negatively impacts their mental health. 

If there was ever a time to improve your relationship with money, it’s now.

Your Finances Don’t Define You

I’ll let you in on a secret. You are more than your credit score or the current balance in your checking account. Your net worth extends far beyond the salary you earn. And if you are living with high-interest credit card debt – that may be keeping you up at night – there are steps you can take to begin digging your way out right now. The important thing is to know that you can set aside any shame you may be feeling and move forward.

How can you shift your mindset? Think of money as a tool.

Change Your Money Mindset 

Psychologists who study people and their finances will tell you that you have to find a way to stop thinking about your money emotionally and start thinking about it like the tool it is. It’s like looking at food as the fuel necessary to meet our body’s energy needs instead of something that you can consume for pleasure. It’s a way to make your money decisions less emotional and more logical.

So many of us were brought up to classify our actions with money as either good or bad. Saving, of course, is good. Spending is … you guessed it, often bad. Move too far in either direction, and you can drive yourself into an unhealthy relationship with money. Here’s an example: If you are a die-hard saver, you could begin to feel scared to spend money (or become guilty when you do), and that doesn’t bode well for your happiness or peace of mind. Extreme savers may find it hard to take a vacation or allow themselves to enjoy the fruits of their labor.

On the other hand, those who overspend need to examine why they are making those choices and find alternatives. This is often easier said than done, especially when we are hard-wired to enjoy buying things. A funny thing happens in our brains when we shop, or even look for items to buy for ourselves. Researchers from the Cleveland Clinic found that dopamine – the hormone neurotransmitter in our brains that make us feel good – increases even before a purchase is made. That’s why we get a boost when we place items in our digital shopping carts or even the red buggies at Super Target. There’s a reason they call it retail therapy.

So instead of assigning those good and bad labels to our financial habits, why not think of it this way: That money is something meant to be used (as a tool) to pursue your plans and goals. That means you save for something, maybe a trip, maybe a new car, and then use your money to fund the thing you were saving for. Then rinse and repeat.

-Jean Chatzky

With reporting by Casandra Andrews