Our Relationship with Money, Tackling Spending, Fears & Understanding Abundance

Our Relationship with Money, Tackling Spending, Fears & Understanding Abundance

December 15, 2022
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The 2022 recession – no matter how long it ultimately lasts – will reshape our lives in unprecedented ways, forcing us to live closer together with some people, liver further away from others, adjust our spending habits and even reevaluate our retirement hopes and dreams.

Let's take a moment and examine how the 2022 recession might change our relationship with money. But before we answer that question, maybe you should ask yourself this one:

Do I have a healthy relationship with money?

It may seem like an odd question, but understanding the link between money, happiness and well-being could prove invaluable. This is especially true since our relationship with money may be healthy or unhealthy.

How we regard money is a function of thoughts, beliefs and emotions formed since childhood. Often, we deal with money in the same way we deal with relationships. If we are careless in our relationships and our personal behavior, our finances reflect the same lack of care.

Money Fights = Divorce. Duh.

A study by Jeffrey Dew, a Utah State University professor, quantified the link between money-related tensions amongst couples and the risk of divorce. Beyond sexual relationships, money fights were the most common harbingers of a breakup. Couples who disagreed about finances once a week were over 30% more likely to get divorced than those who argued over money a few times a month.

But money and wealth are not the same. Money is physical or electronic currency that may be spent immediately for goods and services. Liquid money is a component of wealth, but wealth includes assets that are not liquid and not immediately convertible to spendable cash.

How often do we read of the rising Hollywood or athletic star destroyed by drugs and alcohol? Whether born of insecurity, narcissism or some other need, money may be the fuel that fires destruction. Conversely, there are those who are loving, caring and giving, some with wealth and some with little, who are happy and well-adjusted, leading meaning-filled spiritually rewarding lives.

Why We Pursue Money

People do not pursue money for its own sake. Money represents other things. It may be power, a means of control, satisfaction of competitive urges ("the one who dies with the most toys, wins"). But the most basic role of money is security. You want to know that you can meet your everyday needs and those of the people you love and care for.

A certain level of available money, along with no debt or manageable debt, allows one to sleep at night. Your first task in personal planning is building a healthy financial cushion, managing debt sensibly, with insurance safeguards in place relative to property, liability, health, disability and death.

Money is Freedom

Having insufficient money to meet needs and satisfy obligations is a major source of tension in families, in business relationships and in one's own head. Having ample money and liquidity offers choices and removes constraints.

Financial freedom may bode good or ill. We can make good choices, or bad choices. Chronic overspending, false friends and bad influences, immoral behavior and a life of dissipation are a slide into ruin, greased by money. If our relationship with life is one of balance, our money behavior reflects similar satisfactions.

One of the most important questions your financial advisor should ask is:

What is the money for?

Hopefully, the answer will not consist of things like: "I want to buy a car." Frame money in terms of relationships – what it means relative to those you love and care for, your spiritual orientation, your sense of meaning and satisfaction, your obligations to others, what makes you comfortable and uncomfortable, your legacy.

Try to answer these questions out loud:

  • How do you define money?
  • How much is enough?
  • What challenges do you see in the next 10 years?
  • How does money relate to the alternatives needed to meet each positive or negative challenge?
  • Is money a resource that can power alternatives, or a constraint?
  • How does money relate to what you wish to experience, the outcome desired?

Money should not define you. Your life should run your money – your money should not run your life. Again, what is the money for? Make a healthy relationship with money your watchword.