Beyond the Bank Balance: How Emotions Rule Your Finances

By Helen Harris

?"From the first dollar you earn, it is your responsibility to figure out how to best spend or save that dollar."?

This is the best financial advice I've ever received (with Fergie's famous line, "If you ain't got no money, take your broke [***] home," being a close second).?

I don't remember who said this to me or in what context, but it's advice that has stuck with me.?

This line struck me because regardless of all the outside noise telling you where to spend or how to save — it's a personal decision that ties into your emotional relationship with money. And that emotional relationship may be thriving or hanging on by a thread.?

To learn more about emotional ties to money, I talked with Jette Stubbs , a career and business coach specializing in helping her clients build generational wealth by designing work to fit their lives — all while healing from trauma and prioritizing balance.?

Understanding Money Trauma?

You might be wondering what money trauma is.?I did, too. The phrase is interesting and is everything I was looking for to explain my and others' tumultuous relationship with money.?

Stubbs explains that money trauma is the survival patterns we learned in our past that are maladaptive to our current situation.

"For example, when it comes to how much you should ask for when you're applying for a job if you've never seen anybody in your family earn more than $20 or $30 an hour, which is still quite high, you might not even think that a six-figure salary is possible for you," says Stubbs.?

Stubbs tells me a story of working with past clients who were so scared to get the salary they wanted because of the fear of losing it. Hands would shake, and tears would fall over the thought of having that dream so close … only to potentially lose it.?

And this fear and intense emotion is 100% justified.?

"It's everything you want and afraid you can't get," says Stubbs. "You might ask yourself, 'Am I worthy of this?'"?

Understanding Your Relationship with Money?

How can you see yourself in a light capable of and deserving of "X" salary? And if you believe you're capable and are still not finding the financial success you want — what's holding you back??

Stubbs tells her story of being an international student who had 90 days to find a job or leave the country after graduating from university. She had no family, no connections, and less than $500 in her bank account.?

She was in the Catch-22 of needing to pay down her tuition, but needing a letter from the university to get a work permit, and also needing to pay the tuition to get the letter from the university to get that work permit.?

"I thought I had done what I was supposed to do, like many of us do," says Stubbs. "We think the formula for success is hard work plus education plus experience will equal success. We think that somebody will come and see us and see our hard work and give us an opportunity — and this is what we're taught to do."??

She realized, however, that when she sent out her hundreds of job applications (like so many applicants are experiencing now), she would only get a few responses.

"That's when I realized I had to learn how to sell myself," says Stubbs. "And by doing this, I went from a 0% response rate to a 70% response rate. "

There was a clear undercurrent in our conversation that Stubbs, from the young age of 21, had to figure out how to be financially successful on her own. There was no security net to catch her. This is one of her formative relationships with money over her lifetime — and everyone has them.?

Several emotional scenarios are associated with money management, all of which would be impossible to describe. But maybe you fall into one of these categories:?

• Maybe you're an international student, like Stubbs, with a fire burning under you to find employment and financial security.?
• Maybe you don't know if you're worthy of earning more money and don't know how because of your upbringing.
• Maybe you've always had what you needed but still don't feel financially at peace and want to save more for the future.?
• And maybe, regardless of your role, salary, location, or lifestyle, your debt and lack of financial direction may continue to follow you.?

Upbringing and early association with money significantly impact who you are today. To "fix" or improve any of the above situations, it's critical to understand where the harmful emotional ties lie.??

Identifying Money Trauma at All Income Levels

CNN Business reports , "Few people get through life without experiencing a financially traumatic situation of some kind — whether as a child watching your parents go through it or experiencing it yourself as an adult. … Such events can lead to undermining money habits that can hurt your finances, your relationships, or both."?

The source also suggests that how you manage finances in adulthood might stem from emotional reactions to stressors. For example, one possible reaction is adopting a highly restrictive approach to spending money and being critical of your partner's expenditures. Conversely, an alternative outcome could involve a carefree attitude toward money, where one might decide to live in the moment, fearing that tomorrow it could all disappear.

Stubbs echoed this sentiment, adding that early experiences — even those who have always had plenty — can lend to an individual's current money trauma.?

"I've had clients who have received some form of inheritance, and based on where that money came from, they have a toxic viewpoint of money. … Those beliefs about money help inform whether you decide to bring more money in or push it away."?

Begin Your Money-Trauma Recovery?

The No. 1 question to ask yourself as you strive to lead a better financial life is, "What kind of life do I want to live?"?

From there, the other questions and details you need to work out should be evident. If there's a massive gap between how you're allocating money now versus the life you want to achieve, it's worth sitting down with a spreadsheet (I know, this is boring and what nightmares consist of) and determining the face-value problem. One such face-value problem could be that you have 17 subscriptions, three of which may be for the same company. This, while a pain, is an "easy" fix.?

But here's the tougher pill to swallow.?Whatever your face-value problem is, ask all the "whys."?

Why?did you subscribe to 17 subscription services, and?why?weren't you aware that three were the same??

In this case, the hard truth to tell yourself is that you've possibly been too generous to yourself because you want to buy all the things you never had/wanted and that society tells us we should have. You have been careless with money and have a laissez-faire attitude regarding spending.?

Be brutally honest with yourself, and put the pieces together: "Because of my relationship with money in the form of [insert relationship with money], I tend to spend money [how do you spend your money] and can be [careless, uptight, something else?]

Much like a medical diagnosis, once you know where the bad money behavior comes from, you can take steps to fix it based on the type of life you want to lead.?

If you still struggle after identifying your problem, you're not at the end of the road. There are people and resources to help.?

"The moment you know when you need to seek professional help is when you are becoming avoidant or feeling afraid or guilty," says Stubbs, who mentions that the first thing she recommends doing toward your path to money-trauma recovery is writing a letter to money.?

Christine Luken , Financial Dignity? Coach and Money & Emotions Expert states that writing your letter to money uncovers your fears and regrets about your finances, and she also?shares an example ?of how to get started.

Suppose you still feel avoidant, guilty, or afraid about your spending habits. In that case, it's likely a good idea to seek the help of a financial therapist, who can integrate financial guidance and emotional support to assist in coping with financial stress.?

The journey to financial well-being goes beyond the mere numbers on your bank balance. Our emotional ties to money, often shaped by early experiences and traumas, play a significant role in our financial habits and decision-making, and understanding and addressing these emotional connections can be a crucial step toward achieving financial peace and success. Whether you seek professional help or go it alone, you can navigate through your financial challenges and foster a healthier relationship with money.

What’s the best financial advice you’ve ever been given? Comment below and let me know!

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