Money is one of the most emotionally loaded topics out there - we love money, hate money, obsess
over money, ignore money, resent money, hoard money, crave money, bad-mouth money; money is rife
with so much desire and shame and weirdness. The way you handle or don’t handle your money affects
every area of your life. You may overspend it, hoard it, give it away to others, buy items you can’t
afford, or worse…. Just avoid it, burying your head in the sand. Whether you’re rich or poor, you have a
lot of money or a lot of debt; you feel great or terrible about your money, these are all determined by
your beliefs and behaviors.
Your beliefs about money influence your behaviors – what you do, how you do it, and even how you feel
every single day. You’ve had a relationship with money your entire life. Based on that relationship,
you’ve determined the significance of money, the importance of what money can give you, and the
driving force behind why you do what you do concerning money. Understanding your relationship with
money is critical to managing your money successfully.
Your values play a leading role in how you spend, save, and make financial choices. Values are the
feelings and personal meaning or significance you assign to having a thing: the house, the clothes, the
trip, the lifestyle you choose. In just a single day, we make many choices about what we value by how
we spend our money.
Goals are different. Goals are the tangible things you want from having money. Reaching financial goals
is as dependent on the choices we make with the money we have as it is on our level of income. But
when you think about what having or reaching the goal would give you, it could be security, freedom,
confidence, or any number of things. Those are your values. If your goals support your values, you’ll be
more likely to prioritize them, which gives you a greater chance of accomplishing them.
Most people’s most significant problem with money is they don’t know where it all goes. That’s because
you’re unconscious of where it’s going. How will you know when you have “enough” if you don’t know
what your lifestyle costs? The only way to become conscious is to begin tracking your spending habits.
How much of your spending is deliberate, purposeful, and goal-oriented? Evaluate your spending
habits. Marie Kondo style things and decide what lights you up and brings you joy. Many discover that
they’re spending money in small ways that add up and sometimes don’t match their priorities. Often, it
is the low financial decisions we make on a day-to-day basis that have the most influence on our
financial well-being and future economic security.
Develop a spending plan instead of a budget. Budgets are like diets – they rarely work because they
feel restrictive, and we don’t stick to the plan. More important than building a pile of money is
developing a plan for that money. While hopes and dreams can motivate us, they’re often open-ended
or vague. That makes it hard to build a plan to reach them. Instead, a spending plan prioritizes how you
spend your money so that it goes toward things that really matter to you.
Building wealth is relatively simple: spend less than you earn, avoid debt, and invest for long term
growth. Simple, but not easy. When you have clarity and focus on what is important to you, financial
decision-making becomes much easier. But if you don’t tell your money where to go, you’ll always
wonder where it went.
by Deanna Orf