If you can’t answer “yes” to those questions – or if you spilled your coffee laughing while reading them – you are certainly not alone! Most people relate to money with some tension, because our culture has some very confused and inconsistent messages about it. Coming at it as a psychotherapist, I’d like to talk about money as a form of relationship to the world. Since our culture tells us some very mixed up things about how to relate to the world, it makes sense that we would get confusing messages about money as well.
So, how exactly is money a kind of “relationship”?
Money identifies the degree of power we have over resources that other people want. If you have more money, you can appropriate – and consume – more resources than someone who has less money. That is how our culture has set things up. It also means that the more of one resource I appropriate (buying that new 60-inch plasma screen TV at Best Buy), the less of other resources I have access to (oops – no money to pay the gas bill!)
So how and why do we manage to make this so confusing? One reason is that our appetite for certain resources are insatiable, while the availability of that resource is definitely limited. Another reason is that we get mixed up between resources we need now, and ones we need later. Finally, I think we engage in a yo-yo between denial and obsession over money, neither of which is helpful in managing the healthy flow of money through our lives.
Appetites are insatiable
Give a child a piece of candy, and watch his face light up. Now, give his friend next to him two pieces of candy, and watch the first child cry out in anger. What at first seemed like a lovely treat, now has transformed into “not enough”, simply because someone else got more. For just a moment, stop and think about something in your life which you tend to think you don’t have enough of – the right cell-phone, books to read, nice clothes, or time to rest.
“I don’t have enough of...”
Where does that thought originate? Try turning it around as a meditative exercise:
“I have enough of...”
Imagine being the kid with the one piece of candy, who doesn’t yet know his friend has two pieces. It’s enough – and enough to satisfy. Give yourself a change of perspective in which the amount you have is actually the right amount. It could be as simple as the turned-around thought, “I have enough”, or perhaps you can change the context in your mind. Compare your circumstance to someone who has far less than you. Practice appreciating the amount you have.
Conflict between present-day and future needs
“All right, let's not panic. I'll make the money by selling one of my livers. I can get by with one.” - Homer Simpson
Say you have a fixed amount of money – a hundred dollars – and plan to spend all of it towards your partner’s birthday party. You will think about all the different items you need to buy: food, a cake, decorations, and so on. Obviously, if you spend $100 on decorations, there will be none left for a cake. And so, you negotiate among these competing spending goals so that all the goals can be met adequately.
We have to do the same kind of balance in managing all of our money. But not everything is being purchased at the same time. You don’t go spend your entire paycheck the day it arrives (hopefully!) You set most of it aside for things that will come up later. In other words, you enter into a negotiation between your present-day self and your future self. Money that is spent today may not be available for my future self to spend later. The two of us have to talk, and balance our competing goals, so that both of us get some of what we want (and, hopefully, all of what we both need).
Money is hard to manage wisely because the present-day and future selves don’t negotiate well. Some people have an overactive present-day self, and the dialog sounds a bit like Homer Simpson. “I’ll do what I have to do right now, and worry about cleaning up the mess tomorrow.” For other people, the future self wins out everytime. This leads to anxiety, depriving oneself of even small pleasures, and sometimes putting off necessary expenses such as doctors’ visits or car repairs.
From denial to obsession: yo-yo money diets don’t work!
When the present-day self is in charge of money, we spend because we want something now; because we feel sad, or empty, or anxious; because we don’t have time to comparison shop; or simply because there’s a little happy feeling in the moment that comes from acquiring a new possession. However, we are – in that moment – living in denial of how this will hit our future self. “I’ll take care of it when the credit card bill comes in.” – “I’m broke anyway even if I don’t buy this, and this new outfit will make my baby niece look so cute.”
Then – maybe just a week or two later, while sitting down with the bills – the future-self has to deal with the bills, and we then experience anxiety, guilt, regret and a little sense of dread. “When are we ever going to get out of debt? It’s hopeless!” Then may come sleepless nights, worrying about losing the job, thinking about skipping a bill or borrowing more money on the home.
The truth is, neither denial nor obsessing is that helpful in cultivating a healthy relationship towards the material world. What is needed is a balanced dialog between future needs and present needs. One way to do that is to practice greater awareness of the choices we make in spending money.
Making peace with money
If you are a “denier”: write down every single purchase for a minimum of 1 week. Even more ideal would be an entire month, since so many purchase cycles occur over a month. In a little notebook, write down:
Monday 3rd / Drug store – candy bar / $ 1.19 cash
Tuesday 4th / Supermarket – groceries / $63.85 debit card
Friday 7th / Amazon.com – flip-flops $13.50 CC – Visa
At the end of the month, tally up all the expenses by broad categories, for example “eating out/snacks”, “groceries”, “clothing & accessories”. Get to see where the money is actually going.
If you are an “obsesser”: work from the other direction. Starting with your monthly income from the previous month, break it down into categories that you choose to spend on in the current month. You are going to be spending last month’s income as if you had all of it to use. Create a budget, allocating some money to go towards building an “emergency fund” (3-6 months), some to go towards paying down debts, some towards necessary bills, and some for entertainment and fun money (so that “present-day self” is accounted for).
If you tend to deprive yourself of things now because – evidence to the contrary – you never feel there's “enough money”, then after budgeting for fun money, make sure you spend it. Do not allow yourself to feel guilty about it.
Whether your issue is not enough money left at the end of the month, or perpetual anxiety in the midst of a good income, I highly recommend using a budgeting software so that you can build a healthy dialog between present-day you and future you. My personal favorite is the apt-named “You Need A Budget”, available for download at www.ynab.com.