(The following is a longer version of a newsletter insert that was done for Luma Wealth and their September 2020 newsletter)
It goes without saying that everyone’s lives have changed since the COVID-19 pandemic started spreading rapidly. Social isolation has necessitated unprecedented shifts in how we work, how our children do school, how we shop, how we worship, and the list goes on. A massive life change can easily cause stress in our lives.
As a financial coach, I often tell my clients that one of the main things we will work on is de-stressing their financial lives. I’m not talking about the stress of stock market fluctuations – I leave that for your investment advisor – but I’m talking about the parts of our lives where we deal with the stress of bills, budgeting, debt, and saving. Any one of those items out of kilter can begin to cause stress, fear, or anxiety. And if you feel those emotions with your money, there is a word for you…normal!
Start with your personal money message. What was your experience with money growing up? What were some formative events in your life that have affected how you think about money and how you spend/save it? For me, I had a good childhood with messages from my parents about working hard if I wanted money and saving for short and long-term goals (and they lived those out). I also had a small dash of deprivation as well when we couldn’t buy certain things. I wasn’t actually deprived of much, but when I compared myself to others that I felt were successful, I felt that I was deprived and those feelings manifested themselves in some unhealthy ways that led me to spend money to look successful.
Why Control is Good for our Financial Lives
While these stressful feelings about money are very normal, they still don’t feel good. What is a person or family to do when their lives are in upheaval and it feels like there is more uncertainty than certainty with your finances? Psychology tells us that when we panic, we seek out something we can control in order to ease our stress and uncertainty. In other words, the more we feel in control, the less panicked we will feel.
Regardless of your income or net worth, it is all about how you relate to money. Our relationship with money is typically subconscious and has been built over years of going through life reacting to situations. That may have led to some unhealthy financial habits and behaviors. When we don’t plan ahead or when we react by making new monthly commitments that take us away from our financial goals, we are often giving away that control we desire.
One of the best ways to feel control is to have full knowledge of something and awareness of how it influences your life. In this case knowing exactly where all your money is going is a great place to start. This is where you take those things you’ve done subconsciously and bring them back into the conscious. For example, in my life I realized I had a desire for the outward appearance of success that wound up driving my family’s choice in housing, cars, travel, hobbies, clothing, and dining. None of those things were bad in and of themselves, but I realized we had unconsciously given away much of the control of our finances because of that desire and the spending decisions we made because of it.
So Where Do You Start?
First, you have to get complete awareness of your current situation and spending habits. Reflect on your money message and what did you discover about yourself? How do you bring that into your current situation? Does your current spending, saving, and giving reflect the money message you desire?
Do a 3 month look back into your income and spending. Then review the previous year of spending. Are there differences that emerge? Full awareness can provide clarity which can then inform your next, specific actions. The look back you do now will reflect the difference in spending before isolation and during isolation. After you have your historic data, look it over and see what amounts surprised you (or you and your spouse or partner).
Make your plan. Those surprises you found may be a good focus as you set a new course for your spending and saving and work on your money message as well. The plan you get to make now is where you get to dive into your monthly and annual budget. Check out here for the “how to” guide.
Now that you have a plan to gain more control of your money message, and control of your expenditures, you will feel less stress, and I’ll bet you’ll agree that it feels pretty good!
If you enjoyed this information or know someone who would, I encourage you to share this post with them. And if you would like help taking control of the financial aspects of your life, please consider Aspelin Financial Coaching to help you be victorious with your money! Servicing clients around the world via in-person sessions or video calls.