by Stephanie Chambers
Our beliefs about money is our “psychology of money.” It affect how we live our lives, our mental health and our relationships.
How do we develop our beliefs about money?
If your parents were stingy and coupon-cutting, you might be the same or you might rebel and be the opposite. We tend to learn very little about money and how to manage it during our traditional education at schools or even university.
We hear our friends talk about “retail therapy” and other nonsense. Ignorance breeds ignorance. We try and fit in with our friends and we often get caught up in even more nonsense like shopping for designer clothes or having to buy a certain brand of handbag even though it costs us all our wages for that month.
Credit cards are often offered to us when we are only just leaving school. We sink into debt even before we really even know the power of money. When we are little older we fall for the “mortgage” trap and sink into a well of debt. Often, because our parents have done the same and continue to do the same, we mistakenly think that debt is just part of life.
And if our partner doesn’t have the same beliefs about money as we do, the stress on our relationship can be intense.
How can we change our beliefs about money?
Start by adhering to the rule “live within your means.” That means don’t buy something unless you have the cash to buy it and the knowledge that spending that cash won’t mean you can’t pay all your bills that month.
Start realizing that “stuff” won’t bring you happiness. Look into how lots of free things can bring you happiness. Inviting a friend over for a coffee or for a walk won’t cost you as much as meeting that at a coffee shop. You don’t have to join that expensive gym or go to fancy yoga classes. You can watch good exercise or yoga or dance videos for free online. It’s not that you will never get to go to a gym or class again. But it might be doing it less often or only when you can afford to do so.
Having some money saved up for emergencies will help you sleep better at night. After you have paid off your credit card debts, make that your first priority.
Don’t be a slave for money sake
Even young people are starting to realize that working long hours can be taxing on our psychology and on our relationships. When you are about to buy something you can’t afford – think about how many hours of work you will have to do in order to pay for it. Do you really want all your future choices to be governed by a search for money?
You might decide to work in a well paying field for a while just to accrue some money and invest it. Then after 10 years if you invest it carefully, you may then it may give you the freedom to do work you really want to do.
Or you might continue doing the work you have chosen, but figure out how to save a greater percentage of it. And then invest it. You might look into buying legumes and grains in bulk and cook at home to save money.
Have open transparent discussions about money
You need to talk about money with your partner. Secrets damage relationships. That’s not to say you shouldn’t allow a percentage of your income to be “your money.” This is the money you get to decide how to spend.
Talk about how you grew up and what might have influenced your attitudes towards money. Be compassionate as it may take some time for you to change what you tell yourself about money. You may need little reminders, but they shouldn’t feel like punishment.
You might have decide to each have buckets:
- general expenses (rent, insurance, groceries) – this might be as much as 60% of your income until you work out how to reduce the cost of groceries, rent a smaller place etc
- small splurges like eating out
- splurges you save for like trips overseas (you should only put money into this bucket after you have paid off credit cards and saved a sum for emergencies)
- savings (some say you should allocate this first) – initially this might be for paying off debts and later saving a few thousand for emergencies and later still for money to invest.
Talk to your counselor about it
If you find money too sensitive or triggering a topic to discuss, talk to a counselor about it. They will help you work through your issues with money and help you to change your psychology of money.