What’s your relationship with money?

What’s the first thing you think of when you hear the word “relationship”?

Is it the emotional bond you have with your significant other? Or maybe the ties you have with your family and friends?

When we think of relationships, we think of the connections we have with our loved ones. But the thing about relationships is that they’re not just limited to our bonds with people. We have relationships with things, too, like our hobbies, food, sleep, workout routines, art, books - you name it.

Sounds weird, right? But believe me when I say that it’s not. These emotional attachments are normal - essential, even - and they make life more unique and interesting for each of us.

One of the most important relationships that we need to nurture is our relationship with money. Robert Kiyosaki, financial guru and author of the popular investment book Rich Dad Poor Dad, tells us this:

"Financial Freedom is a mental, emotional and educational process."

In a world where capitalism dominates and all of us struggle to climb to the top, it’s indisputable that we all have a mental and emotional relationship with money. And as all relationships go, it’s something that we learn from as we develop it.

Whether it’s healthy, toxic, indifferent, obsessive, etc, it’s this very relationship that dictates whether we can be both financially successful and satisfied with our lives. Because let’s face it: all  good things in life come with a price. And most of the time, that price is not cheap.

What develops this relationship is nothing is mindset, and as a business coach, I can tell you that it’s this mindset that will result in acquiring it.

Easier said than done, I know. But here’s how to improve your relationship with money:

How a relationship with money is formed 

Everyone has their own relationship with money.

There are those who are very careful with spending - they don’t spend on luxury items or even want them, they just spend when it’s absolutely necessary.  There are others who love to spend money, upgrading their iPhones nearly every year whenever a new model comes out. Then, there are those who are a mix of both - trying their best to save but treating themselves once in a while.

Different strokes for different folks. But how does this relationship with money develop in the first place?

Believe it or not, it doesn’t start when you get your first paycheck, it's well before that - in your childhood.

It starts when you see how your parents handle money: Were they extravagant when they went out to shop? Did your family always eat at fancy restaurants instead of cooking at home? Or were your parents extremely thrifty and only rarely bought you what you wanted?

Normally, people adopt their parent’s mentality with money, consciously or otherwise. So if you grew up with a high standard of living, chances are, you’ll keep that standard when you start living on your own. 

But, this only rings true to a certain point. As you work towards financial independence, other factors start to affect your mentality with money.

One is the fact that your socioeconomic status will not necessarily be the same as your family’s status back when you were dependent on them. Your lifestyle can change depending on your means.

Education also plays a part in this. While how to save money isn’t taught in school, there are tons of books people read up on to form or restructure their relationship with money.

Lastly, what you value (or don’t value) in life affects the relationship you build with money. How important is comfort for you versus saving money? Are you saving up to grow a real estate portfolio, or would you prefer to spend a lot on new tech or hobbies?

There really is no wrong priority. We all have different goals and dreams; don’t let anyone take that away from you. But without a proper balance, you might end up being too thrifty that you can’t even enjoy the good things in life anymore, too extravagant that you save nothing (or worse, drown in debt), or too greedy that not even the most expensive car or the biggest mansion will satisfy you.

In small business, a good mindset with money is one that understands your goals versus your means. Having this mindset will push you to have a healthy relationship with money where you are able to spend your money wisely without sacrificing your comfort and enjoyment in life, while still being able to grow your business and therefore, your wealth.

The difference between money and greed 

I’m sure you’ve heard of the saying, “Money is the root of all evil.” 

Many people actually believe this, and it’s hard to blame them when there are way too many corrupt public figures, stepping on others and even stealing from others just for money.

But the thing is, it’s not money itself that’s evil; it’s the greed for money that is.

Having a negative relationship with money, where you push it away and don’t have the confidence to say that you want more of it is the biggest obstacle in building wealth. Why? If you can’t even admit to yourself that you want it (for whatever reason it is), what will drive you to work towards earning more then?

Money is something we simply can’t do without. Food, shelter, water, clothing - all of our basic needs require money. Electricity. Gadgets. Furniture. Everything that we need today in order to live comfortably needs us to spend money.

Let’s be honest: we all want a good life. We want comfort at the bare minimum, and as entrepreneurs, we started our businesses out of ambition and a dream for success. We can achieve this by building wealth. And nothing about that is evil; we’re all doing our best to thrive.

Wanting money doesn’t automatically make you greedy. Greed, especially when nurtured, leads to theft, dishonesty, manipulation - all to get what a person wants. Now that’s evil.

I talked more about how greed leads to an unhappy life in one of my previous blogs. In that blog, I also explained that there are so many ways to use your money for good.

For instance, you can fund a brilliant yet less-fortunate student’s education. You can create many jobs through scaling your business. You can donate to causes that are close to your heart. You can buy equipment for hospitals. The opportunities to do good are endless when you’re wealthy.

Again, it’s all about having a positive mindset.

How to change your relationship with money 

As small business owners, it is vital that you have a healthy relationship with money if you want your business to grow and flourish.

Here’s what you can do to improve your relationship with money:

Have the right mindset.

Previously, I talked about how mindset trumps talent in the race for success. It’s a great mindset that builds determination within you and pushes you to grow. 

When it comes to building wealth, never give up on finding ways to earn more money. If you believe that you’re in a hopeless situation, then you’ll stop trying. If you only think of working for instant gratification, you’ll end up with little savings and no wealth. If you tell yourself that money isn’t that important and that it’s the root of all evil, you won’t achieve your ideal lifestyle.

Don’t limit yourself. Remember, while rags to riches stories are rare, they still happen. So what’s stopping you from achieving your goals? Keep aiming high and working hard.

Set money goals and track your progress.

You can’t be wealthy if you don’t have a goal. Setting goals directs your judgment. Whenever you need to make decisions, always consider which option will lead you to achieving your goals.

Track your progress, too. Set milestones for each goal. Monitor how close or far you are from reaching it. Check if your progress matches the timeline you gave yourself for it. This ensures that you’re actually going somewhere, sets your expectations on what’s realistic and what isn’t, and drives you to work harder and smarter in reaching your goals.

Read, read, and read some more.

There are hundreds of thousands of finance books out there. Pick one up and read it. But don’t stop there. Learning the basics isn’t enough if you want to build your wealth effectively and efficiently.

Keep reading. Even if these books are on the same topic of financial success, each of them will offer a plethora of perspectives that you can learn from, and it will be up to you to decide on which pieces of advice you want to incorporate in your financial planning.

Don’t stop reading. Let yourself learn something new every day.

Don’t let greed win.

It’s human nature to feel greedy once in a while. But nurturing it and allowing it to consume you will be your downfall. 

Be self-aware. When you catch yourself entertaining greed, remember your goals and your principles. Stop yourself from acting on selfish desires.

Plan for the long term, don’t live (or spend) in the moment.

Treating yourself once in a while isn’t wrong. After all your hard work, of course you deserve to use your hard-earned money for something nice. Life’s too short to hold yourself back from the things that make you happy.

But remember what they say, “Too much of everything is bad”. If you keep spending like there’s no tomorrow, you’ll use up your money and fail to save and invest to build your wealth. 

Exercise control. Whenever you’re tempted to buy something you don’t particularly need, ask yourself, “Is this really worth it?” and try to think of other things you could spend that money on (or better yet, save it for). 

Having a healthy relationship with money is crucial in building wealth. Just like in your relationships with your loved ones, you’re supposed to take care of your money and not abuse it. Don’t let greed guide your actions. Prioritise your long term goals over instant gratification.

Having this kind of mindset will drive you to reaching your goals and achieving financial success.

“I have a fantastic relationship with money. I use it to buy my freedom.” - Gianni Versace

Want to understand your relationship with money on a deeper level? Looking for more ways to improve it? Book a call: https://www.evolvetogrow.com.au/book