What is your relationship with money?
Personal finance starts with a self review and reflection of relationship.
Imagine you walk into an office for an appointment to talk about your relationship with money. On the 11th floor, you exit the elevator and walk down the hall to an end office, where you open the door and enter. The room is quiet, full of the aroma of lavender, which embraces you with a warm welcome. Straight ahead, there are glass windows overlooking the city center; you hear muted noises outside to remind you the world of commerce is happening, but thankfully the sounds are soft and distant. The office is very still, with no one else in the waiting room, which gives you enough time to sit down, relax, and breathe. It is hard to miss a beautiful Greg Singley1 floral impressionist painting --a romance of beautiful flowers stretching to the sun. Accompanying the gorgeous Singley art is a striking Vie Dunn-Harr2 painting, Legacy of Camarena in all its glory. You close your eyes and recall flower symbolizes hope, wisdom, communication, and faith. Within minutes, you have a sense of calm, peace, and tranquility.
No, it’s not your financial advisor’s office, but rather a money mentor and coach. Their role is to walk beside you as you discover the right financial path and take care of your future self. You look forward to the sessions, as it is an opportunity to give yourself some “me time.”
You hear the office door open and two quiet voices exchanging good-byes, and then you hear the closing of a backdoor where the previous client has exited. There is such secrecy about money and our relationship with it. We still have “would have,” “should have,” “I wish I had,” “I lost,” and “I didn’t do’s” in our life. We all do. But that is why we are here, to build a good relationship with ourselves and money. It’s a very personal relationship, and our well-being depends on us spending the time to do all the different kinds of work necessary to have a healthy relationship.
You exhale and get excited as you hear the footsteps on the wooden floor slowly approaching your direction. As you look up, you are surprised to see who appears in the hallway, walking your way with a warm smile and ready to embrace you? It’s you, your future self, the vision in your dreams. You are glad to see one another and you have a sense of relief building up inside of you as they look well, at peace, and with a sense of resilience that comforts you as you realize everything will be ok.
I don’t know about you, but this scene helps me get clarity as I walk into this imaginary office. I hope it has the same effect on you. Get to know the current and future you.
Personal finance, at its core, is the knowledge of you, highly individualized based on your well-being (mental and health), skills and capabilities, personal growth, relationships, risk management, and how you respond to your environment. You will notice I did not mention your financial knowledge yet. Sure, you can learn basic to advance personal finance strategies, but the part that only you will know is how you interact with the drivers of wealth. Since there is only one of you on this earth, how can anybody possibly help you the way you can help yourself in this first step?
Let’s start the conversation and reflection :
Future You: I’m glad you are here. Our one question to ponder today: What is your relationship with money?
Your Answer: It’s complicated.
Future You: Isn’t that the truth. The good news is we are spending time today reflecting on our financial past to create our economic future. Let’s get started.
Income:
Take a long look at your income generated over time. Log into your my social security account and pull up your historical income statement. The social security report is a quick way to give you a chronological sense of your income over time. You can use this report stated by years to recall your work memories and the associated income.
Questions to reflect on:
1) Look back at the years and recall how you felt about your work. What was the most satisfying position you held?
2) Does your income fluctuate? If so, what causes the rises and dips?
3) How does your job salary compare with the market for the same role?
4) Do you know where your income falls in your current job pay range?
Note: Pensions, annuities, and the interest or dividends from your investments are not earnings for Social Security purposes. While your income report is not deemed holistic, it will give you an excellent historical review of your primary income.
If you are interested in how you can effectuate change in your salary, read Closing the Wealth Gap.
Expense:
Unless you’ve been tracking expenses for years, let’s pull the last three months of expenses and add high annual costs to your analysis. The review aims to see how you naturally tend to spend money and what past decisions have impacted your finances today.
The review might take an hour to pull together if you have multiple financial institutions in your portfolio. However, it is worth the effort.
Questions to reflect on:
1) How much of your spending is automatic vs. manual purchases vs. prior year decisions?
2) How much of your spending is an asset, maintenance to an appreciable asset, or a disposable expense?
3) Does the asset have a liquid and well-established market for resale if you need cash?
What’s Next?
Journal on the seven questions above. The exercise aims to view your passive activities and how money is generated and spent. Remember that the review is not a cost-cutting or income-growing exercise. It is a relationship reflection exercise.
Once you’ve journaled, take time to reflect on your answers.
When you look over your income and spending, what are the stories it tells about you, your situation, and possibly what you value? You are looking for patterns.
Ready to Dream?
The review and reflection exercise is just the beginning—keep reflecting on what stories your passive actions say about your relationship with money.
Once you start to get some clarity on the state of your relationship, you can begin to dream about what you would like to keep, change and improve.
This is where it gets exciting; this is where we get to dream. Dreams can be the language we hear, feel, and see coming back to us from our future selves or the spirit from within. Not all dreams come true, but many do, and maybe with this exercise, you can add a few more dreams to your list.
Pick the one item you can start today to help you improve your financial situation. Just pick one and see where it takes you.
What are some of your dreams?
Write down what your dreams tell you; it will help you on your financial path to a more healthy relationship with money. Remember, they can be anything. It is your life, and you are the only one who knows what lives inside you.
Until next time, may your relationship with money be healthy, prosperous, and benevolent.
BTW
Are you wondering whose voice was in the hallway when the previous client left? That was you, too, and you just finished a session on personal vs. positional power.
Author:
I’ve been passionate about personal finance and financial freedom topics since 1993 after attending a course at The University of Texas at Austin. I’ve used my life and passions as a Fortune 10 leader as experiments to help close the gap for myself and others. I’m excited to spend more time closing the wealth gap for women and the Hispanic community. Here, you will find me writing on integrative financial well-being, taking the body, heart, mind, and spirit approach into account.
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A print to canvas purchased and framed in 1995.
An original oil painting purchased in 2005.