It's Time to Stop Feeling Guilty About Your Finances
While a variety of emotions, backgrounds and experiences contribute to our uneasiness to discuss money, feeling guilty and insecure about it generally boils down to a lack of clarity about what's going on with it and a lack of education as to how to fix or get it on track once we have identified the issues.
Ultimately, there's no sugar coating it. If you want to start making smart choices with your money, you have to take action. You won't lose weight by doing nothing; you won't earn a college degree by zoning out in the back row of your classes; and your finances won't fix themselves.
If you want to get rid of your money guilt and insecurity once and for all, follow these steps.
Determine Where You Want to Make Progress
The overarching subject of money covers a multitude of complicated and ofttimes stressful areas: budgets, net worth, spending patterns, insurance, retirement, credit and more. It's no wonder it's overwhelming to think about getting it all under control. How does one even know where to start?
Your first instinct may be to dive in and try to tackle it all in one go, but your best bet is to handle this as you would any other large undertaking: Break it down into bite-size pieces. Where is your attention needed most? Do you most need to get better at tracking spending? Has it been a while since you've checked in on your investments? Do you have too much money sitting in cash? Should you be saving more? Have you set up your retirement accounts? Is there a better strategy you could be using to pay down your credit cards?
Pick two or three areas that you want to make progress on first, and commit to working on those over the next few months. Once you've gotten those areas on track -- and on something closer to cruise control -- you can move on to others.
Create a Goal for Each Area
Once you've determined the areas you want to work in, set goals for yourself.
Never mind the general goals of "I want to pay off my debt" or "I want to start building my emergency fund." That's the same as saying "I'm going to lose weight." Great -– but how much weight are you planning on losing? At what rate? And by when?
It's hard to celebrate your intermediate wins when you don't have a place to measure progress. Skip the hassle of creating big-picture goals for yourself and drill down into what you specifically want to accomplish in each area and when you want to do it by. Your goals should be quantified and measurable so you can celebrate your progress. This workbook will walk you through goal setting.
Schedule Your Money Time
A good way to start kicking your guilt to the curb is to start paying more attention to your money. Schedule time each week to sit down and review your progress and evaluate areas where there may be room for improvement.
Set a recurring date on your calendar and include an agenda in the notes section. Your agenda may include the following:
- Review expenses and savings. Which categories are you above and under on?
- Track progress on goals and paying down debt. Did you add to balances, pay down debt or stay even for the month?
- Make adjustments. Where do you need to change to stay on track?
- Celebrate wins.
Money guilt can stem from a variety of factors, but what typically brings on this guilt is the fact that we're not using our money to live a life we value. We know that by not tracking our spending or saving for retirement or even that big vacation, our money isn't going towards those things we value or prioritize in our lives.
There's a famous quote from James W. Frick where he says "Don't tell me where your priorities are. Show me where you spend your money and I'll tell you what they are."
Think about your finances. Is it the tangible or intangible things that motivate you? Do you get excited about possessions or experiences? What are you saving for right now?
- How will reaching your goals make you feel? Secure? Free? Powerful?
- What's the ultimate reason behind your desire to earn more, save more or experience more? How does it translate into your life?
Money is a tough topic to tackle, and it's OK to be uncomfortable with it. What's not OK is stick your head in the sand. Take small steps, schedule focus time, set clear-cut goals and you'll likely find that the more attention you pay to working through and out of the issues, the better and stronger you'll feel about your money.
Mary Beth Storjohann is a certified financial planner for Gen Y. She created Nine Steps to Workable Wealth to help you make smart choices with your money.