You have to address the past to make it through the present.
In this weekly column, I’ll help you sort out financial gray areas—from prenups to inheritances and more. Submit your money matter here.
Growing up low-income, I’ve developed the propensity to save and not spend. Although this is a wonderful problem to have, I’d like to have a better relationship with my money, in the sense that I’d like to feel more comfortable spending it. There are things I’d like to buy myself, but I struggle to actually make the purchase, even if they’re only $20–$30 and I’ve budgeted for it. Do you have any advice for this?—Death by 1000 Paper Cuts
Every now and again, I find myself massaging the contents of an online shopping cart, trying in vain to get that dollar amount down into something that feels “reasonable.” Like you, I came from a low-income background and my money habits are indicative of that: a $20–$30 purchase that I know I can buy without consequence will cripple me temporarily, sometimes to the point where I just don’t buy the $22 eyebrow gel from Sephora that I want but don’t need.
I want to help you figure out why this feels so bad. Unfortunately, I’m not a therapist, but Dr. Alex Melkumian, founder of the Financial Psychology Center, is. “I think [with] a lot of decisions that are made based on emotions, we have a hard time dealing with [them], because emotions are unpredictable,” he said. “At the root of somebody who’s holding onto their money and not spending it is a fear that they’re not going to be able to get this money back. They have a fear of being in survival mode.”
Getting to the heart of this particular matter isn’t easy, but just like getting a grip on your finances or any other problem, having a plan helps.
- Understand the story you’re telling yourself. We are who we are because of our past, but untangling what stories we learned about money in the past is useful for moving forward. “The understanding that those beliefs and those memories impact [your] financial decisions to this day is a really important piece,” Melkumian said.
- Feel your feelings. “The most prudent financial decisions are made out of a place of emotional neutrality,” Melkumian said. Once you understand why you are the way you are, it’s time to do a little more work: First, acknowledge the feeling you have and how it relates to your past, but understand that that’s just a feeling and not reality. “We want to be aware of our emotions, but not have them be at the forefront of our financial decision-making.”
- Give yourself permission. Now it’s time for a little reverse psychology—trick yourself into dismantling that narrative a little. “In your spending plan, you would do a line item that’s called “mandatory splurging,” Melkumian suggests. Allowing yourself to spend just a little bit of money by literally baking it into your overall budget means there’s a safeguard against getting totally out of control. Be flexible with yourself, too—and remember, this is a rule you made, so you can break it (within reason) and adjust it to fit your needs.
Doing this work isn’t easy, but be patient with yourself and know that it will get easier over time.—Megan
Original article by Megan Reynolds is published here: https://www.morningbrew.com/money-scoop/stories/2022/03/03/untangling-your-past-relationship-with-money