
In the same way people are able to establish deep connections to places and objects, it is possible to connect with and relate to money. In fact, our relationship with money can be one that runs particularly deep, as it impacts other aspects of our lives. From consistently being listed as one of the top reasons for divorce, to determining anything from educational and health outcomes to safety and security and emotional wellness, we cannot deny the relevance money holds in our lives.
Risk pursuant vs risk averse
While on the surface it might seem like those who are ‘natural savers’ have a better relationship with money than those who have little control over their spending habits, this is not always the case. Some savers find themselves to be almost wholly risk averse, which can actually lead them towards poor financial and other decisions like avoiding making investments, staying in unfulfilling but ‘stable’ careers, or hanging on so tightly to their wealth that they operate in a constant state of fear and rarely actually enjoy the fruits of their labour.
On the flip side, some relate to money like it’s a game, and may actively pursue risky investments, spend recklessly, or erroneously believe that they will always land on their feet. While in some cases this could lead to a high-risk, high-reward outcome, an irresponsible approach to handling money more often results in high levels of debt, low retirement savings, and greater potential for the proverbial bottom to fall out.
Both these ways of relating to money are problematic.
Middle ground
If you find yourself to be overly cautious or excessively free-spirited with your money, it may be time to reassess your psychological association therewith. Are you hording your money because it’s where you find your security? Are you getting into debt because you have an assumption that someone will inevitably bail you out? It can take some time to wade through these considerations, and may even require the help of a trained therapist, but once you’ve worked this out, it can be possible to find a healthier middle ground.
Understanding your subconscious responses to and interactions with money is, however, only the first step. From there, you will need to practically and consistently adapt your day-to-day actions by formulating a budget that either responsibly loosens (for the compulsive saver) or tightens (for the compulsive spender) the reigns, setting achievable goals, and seeking out viable investment opportunities. Personal finance software can be a great tool in this regard, as it can help you keep better track of your income and expenses and confirm whether or not you can actually afford to spend on a given item. Building a habit of paying attention to your money, without being fearful of its loss or indifferent to the need for long-term saving can help you establish not only a healthier relationship with money itself, but can ensure greater financial freedom that can improve how you generally interact with the world around you.
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