More than half the people in the US worry about money every day. Are you one of them?
If so, a great way to shift how you think about money is by thinking of what your relationship with money is like. If money were a person, how do you treat it? Do you respect it? Show it attention? How do you speak of it? Do you tell it it’s never enough? Do you look for all the amazing things money does for you or do you focus on the lack, the things it doesn’t do for you? Sometimes we show up in our relationships this way and that’s not healthy. If you look at all the amazing things your husband does for you you’re going to have a much stronger and happier marriage than when you focus on the lack and all the things he doesn’t do for you. How much attention do you pay to money? Do you ignore it when it shows up for you (pays an electric bill) yet complain and blame it when it can’t (pay for one of your splurges)? Do you neglect money by putting off looking at your bills or not knowing how much you have in your savings or debt accounts? This is like not opening your kids’ report cards or not looking at the results from a lab test. How often do you use money to manage your emotions? If you’re angry or upset or low on self-confidence, do you use money to feel better and over-spend? These are all areas I love to dive into with one-on-one coaching. Like all of life, the results we see in our life (how big our bank accounts are or are not), are directly linked to the thoughts we focus on. The thoughts we focus on create feelings. The way we feel drives our actions. The actions we take lead to the results we see in our life.
Today’s blog will help no matter where you are in your relationship with money to bring calm and peace to your life through simplifying. The more structures we have in place to manage our money, the less worry, angst, or anxiety we feel. The more we know about the funds coming in and the funds going out, the calmer we feel and the more in control of our life we are. We feel out of control or overwhelmed when we don’t know what’s going on. We have two conflicting drives happening: we like to feel in control yet our brain is wired to avoid discomfort. Choose to over-ride your brain to bring financial peace.
We can feel in control of our finances when we know how much money is coming in, how much is going out, how much extra we have each month and what we will do with that extra. This is all a piece of intentional living or living mindfully. The conflict occurs because our brain resists discomfort and doing something new. Yet, we always feel better when we know the truth. The truth isn’t always pretty or uplifting but sitting and worrying about the truth wastes our mental energy and creates a low-level of stress in our system.
So what to do? First, override your brain and look at how much money you have, what you’re bringing in, how much you require to live, and where each of your dollars goes. This will take about 15 minutes so please don’t try to email me fancy excuses of how you don’t have time. Treat money with respect by paying attention to it. Second, let’s look at how we handle money functionally in our day to day lives by investigating two areas: our spending and our bills . Habits make up the majority of our behaviors: Laziness is a habit, feeling overwhelmed is a habit, being late is a habit, making money is a habit, being broke is a habit, spending when stressed is a habit. Let’s take some time to look at your financial habits and make small shifts where necessary:
SPENDING: How do you spend your money? Deliberately, intentionally, and mindfully? Or impulsively, over-indulgently, and recklessly? Here are three tools I use that may help wherever you are with your spending habits:
24 hour rule: When shopping online, I never purchase in the same day that I put the item in my cart. I will look around certain stores and put items in my bin with the agreement to myself that if I want it, I can purchase it 24-hours from then. This helps disrupt any automatic pattern of dopamine and makes sure that I’m not spending or buying things instead of feeling an emotion. When I’m shopping in person (i.e. not online), I get intentional about what I am looking for and what I intend to purchase. For me, this is especially important with places like Target where I could go in to buy socks and walk out with new patio furniture (it’s happened!). Consciously stop and ask yourself before entering any store, whether it’s Ann Taylor or your local supermarket, what are you planning to purchase? If, while in the store you see something else that your brain tells you you need, snap a picture and, if you still want it the next day, go back and get it. Try it. This has helped me cut back on my spending tremendously.
Consult: If I am going to purchase something over a certain amount, I first consult with someone I trust. Right now, that number for me is $100 and it varies depending on my spending goals. When I was single, I would consult with my kids. Currently I consult with my partner. I am not consulting with them to seek their approval. Rather, in talking to them and telling them of my intended purchase, I get clear on why I’m considering the purchase and I make the spending even more conscious and deliberate. Who could you consult with and what would your number be?
Cash: If you have trouble over-spending when out, choose to leave your credit cards at home and bring cash instead. When you know you can only spend what you have, you spend a lot more consciously. I still love doing this on my errands. It makes me more conscious when I throw a box of cereal in the cart. Is that cereal a necessity or should I wait until I’m done with the freezer aisle? It’s also really nice to have more left over than you thought. Try it and let me know if this helps you spend more mindfully.
BILLS: How do you pay your bills? How much stress do you have about paying your bills? How much time does it take to pay your bills? How often do you put off paying your bills? All of the following bill tips are for those who have no debt (other than a mortgage). By far, the most important thing you can do to manage your financial stress is to eliminate debt; stop spending above your means. Our relationship with money can be a complicated one and, if you’re in debt, get a coach. There are many tools I teach to help chisel away at debt with one-on-one clients and I don’t address those here. No matter where you are on your journey, these tools associated with organizing and managing your bills will be helpful:
Automate: Get as many of your bills set up to pay automatically as possible. Eliminate the stress that you will miss a payment or be late by automating it. These days, it’s rare that a company doesn’t offer this service. Get out your calendar and schedule one hour to do this in the next week. Before that time arrives, start keeping a list of the bills that you pay. I suggest having a notepad out on a counter so you can jot down the bills as they come to mind: Gas, Utility, Rent, Amazon, Netflix, Medical, etc….Which subscriptions do you have? Which bills arrive in the mail? Write those companies on your list. When your scheduled time arrives, sit down with that list and get to work. Start with the companies that you already have an online account set up for. Get on to your profile and look for two things: (1) automatic billing and (2) paperless billing. Open a blank doc (or keep a pad of paper at your elbow), and write which bills you have paying when. Automating your bill will save you time and energy by simplifying the bill paying process.
Consolidate: Get very clear about what your different accounts and credit cards are used for. Who do you have checking or savings accounts with? Which credit cards do you have? I recommend having one credit card that pays all of your monthly subscriptions and nothing else. I don’t use this card for other purchases during the month, in fact, I don’t even have it in my wallet. Pay this card’s balance in full each month on automatic payment. Have one card that you use for everything else: supermarket, gas, travel, etc. If you’re a business owner, please have a business card and checking account that you use for all things business.
A message that comes up often in my life and my coaching: less is more. You don’t need a separate card for gas and a separate one for travel. Once you adjust your relationship with money, saving 30 cents a month because of some loyalty points gas program will be unnecessary. Consolidate your life for your life. Paying regular price for something is a fine price to pay for your sanity. The more you have to manage, the more stress there is in your life. You’re in charge. Where can you consolidate?
Eliminate: For those random times that you still get a bill in the mail, resolve to touch that envelope once. Open it and pay it at the same time. Have a place where you keep your check book, pen, envelopes, and stamps. Open the bill, write the check, put it back in the envelope, and stamp that baby. Do not let it take up more time that that. Have a place where you file paid bills (after you take the automate step above there won’t be many of these). If thinking of doing this one-stop bill pay gives you hives, then choose one day of the week when you sit down with a nice glass of ice water and you pay the bills. Commit to the time and follow through. This doesn’t work if you choose a day of the week and when the day gets there you procrastinate. Use one of my habit tools and follow your schedule. Doing what you say you’ll do is a powerful way to improve your relationship with yourself and your money.
Okay warriors, where can your money relationship be improved? What will you start doing now? I absolutely love the app MINT because (1) it’s free and (2) it keeps all my financial info in one place: credit cards, bank accounts, even mortgage or rental. It’s a great way to pay attention to your money and begin a more respectful money relationship. Our life experience is all about what we think about what’s happening, not what’s happening. Money is no different. How you think about money will impact how you feel about money, the actions you take with money, and the results you have in your life with money.