The Secret To A Healthy Relationship With Money

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Do you believe that money is the ultimate panacea? Have you ever thought to yourself, “If I just had more money, my life would be so much easier and less worrisome?” Most people tend to think this way until they amass some wealth and the opposite happens. Their life gets harder and more stressful.

During the dotcom boom of the 90’s, my stock portfolio did extremely well. I amassed a small fortune, got greedy and starting investing more and more into the markets. Sometimes I even used margin and other forms of leverage to increase my gains. Because I was risking so much money, I found myself obsessing over ever little up and every little down.

Peace Of Mind

Photo By Kudumomo

I would wake up at 6:00am PST every morning and agonize over my real time stock quotes until 9:00am when I had to go to work.

Then at work, I would monitor my stocks again at lunchtime. My mood really fluctuated depending on the market. If the Nasdaq had an up day, I was cheerful. When it tanked so did my mood. I had made a good amount of money, but money was also making my life miserable.

Looking back, my unhappiness and increased stress had to do with my unhealthy relationship with money. Relating to money is every bit as important as relating to the people you care about. You need to spend time and effort to understand its implications and to find the proper place for it in your life.

If you are not careful, money can have a negative effect on your psyche and consume your mind and soul. It’s best to think of money as your eternal companion, a companion that you must get along with for the rest of your life.

I learned a lot about my relationship to money through gaining it and losing it (in a very short period I might add). Like any good relationship, you need to nurture it and establish the proper mindset and attitude. And there are certain things you can’t take for granted.

Recognizing What Type Of Money Person You Are

Establishing a good relationship with money starts with understanding what type of person you are and whether you fall into any of the following categories.

Spenders
Do you frequently make purchases that are beyond your means? Do you purchase things to make yourself happy? Is there a connection between shopping and your mood? If so, then you can consider yourself a spender. Spenders have a tendency to accumulate credit card debt because shopping to them is an addiction. Spenders spend money in hopes that material items will bring happiness or provide pain relief.

Misers
On the other end of the spectrum are the misers. Misers absolutely fear poverty and constantly worry about not having enough money to live. Misers need to feel in control and are generally uncomfortable with any sort of uncertainty. Ironically, misers fear poverty yet they practically live in it because they spend so little.

Haters
Money haters absolutely detest money and what it does to people. They eschew wealth and will often live in deprived and desolate conditions. They will purposely avoid material possessions whenever possible.

Seekers
Money seekers are the ones who obsess over becoming wealthy These people put a premium on making a fortune with the belief that it will solve all of their problems. In reality, there are usually other inadequacies in their lives that they are trying to make up for with material wealth.

Looking Beyond The Money

No matter what money category you fall into, it’s important to look beyond the money and to examine yourself from a scientific perspective. What are you really concerned about? If you are a spender, why do you need so many possessions? If you’re a miser, why are you so worried? And for money seekers like myself, why are you constantly chasing money?

Pay close attention to yourself when you are answering these questions and you’ll slowly but surely realize some of your hidden insecurities and motivations. Why am I a money chaser? I seek money because I want enough money to buy whatever I want and to be able to provide for my family.

I want to be wealthier than my friends and I want my kids to have a better lifestyle than I do when they grow up. I also want to have the opportunity to try new things that I would otherwise not be able to if I didn’t have the money.

Breaking Things Down

Let’s take a closer look at my own money motivations.

I want to buy whatever I want. What is the definition of “whatever I want”? After sitting down to think about it, I’ve concluded that there is nothing material that I really want other than a nice house for my family.

Besides a house, there’s practically nothing that I desire or need. This realization was further reinforced when my daughter was born. I’m perfectly happy spending time with my wife and daughter every single day without spending a dime.

I want to provide for my family. What does this entail? I just need to cover basic needs like food and clothing and educational expenses when my daughter grows up. This isn’t that big of a deal if I set aside enough cash on a regular basis. I don’t need profound wealth to achieve this goal.

I want to be wealthier than my friends. I used to feel this way but now I don’t really care. Life is too short to be comparing yourself to others. Let’s face it, some people are going to be better or worse off than you and you just have to deal with it. Focus on your own happiness and forget about the others.

I want to try new things. The only major thing I want to do later on in life is to travel. I want to visit new places and experience new cultures. I want enough money to allow me to go freely and dine as I please in all of these places. I’ve put together a pretty good list of destinations and have come to the realization that profound wealth is not required to achieve this goal.

Putting it All Together

Improving your relationship with money involves a fundamental change in mindset. Getting along with money isn’t about earning a huge income or making more than your friends. Once you figure out the proper place money resides in your life, you’ll find that your life will become much more pleasant.

You’ll place less emphasis on decisions where money is involved. You’ll feel less pressured to take a job or pursue a career in which money is the only factor.

Personally, I’ve found that by focusing on my interests and family, that I’ve effectively limited my material desires altogether. I’ve become more in touch with my real needs and as a result, money has become more of an afterthought rather than an obsession.

The sooner you realize that money is not the answer, the sooner you’ll be at peace. I think the key to a good relationship with money is to detach any and all association of money to happiness. And the only way to do that is to discover what truly makes you happy.

What money category do you fall into? What truly makes you happy?

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21 thoughts on “The Secret To A Healthy Relationship With Money”

  1. I totally agree with this post. Money shouldn’t take over a person. A person needs to set goals for themselves to reach and constantly remind themselves to reach those goals.

    My goal are 99% the same as yours. I was influenced by my dad mostly to see money differently.

    Great Post. Loved it. Stumbled.

  2. I am a money seeker. I equate wealth and knowledge to manage it as road to freedom. I start my online business so I can acquire wealth and the knowledge to manage it.

    What truly make me happy? The ability to spend time with my family and on occasion spending time with them without the need to worry about money.

    My goal is to have enough assets not money.

  3. @Trevor – Thanks! I checked out our your blog as well and I think that you have excellent content.

    @Hamdani – If you have enough to buy everything you need for yourself and your family plus an emergency fund, why do you still need assets?

  4. Money can provide security. Being financially independent means that you don’t need to suck up to a mean boss or stay in a job you hate. Luxuries are nice, but the real meaning of money to me is freedom.

  5. Hi Vered,

    I hear you loud and clear. I like my job and my boss, but I’d love to spend more time with the family.

  6. I’m with Vered on this one. I need freedom and to be able to not fear losing my job and health insurance (that I would not be able to get without having a full-time job.) I need to be independent of that type of lifestyle. I hope to be insurable without needing to rely on a group policy and when that happens, I need to be able to afford it and/or any emergency that may come up.

    On a lighter note, I was never able to travel and I hope to be able to do that in the next year or two without worrying about losing my job.

  7. Bleu Panda says:

    Great post on such an essential subject, Steve!

    Freedom! Freedom! It’s definitely one of the fundamental themes not only in this post, but also in this entire blog. Money is a double-edged sword that can give us the freedom we desire, yet enslave us as we seek for it. When I think about money, its usually at three levels, which you have alluded to:
    1) Provision for my needs (the bare necessities)
    2) Capability to fulfill my desires (interests like traveling, material items, etc.), and
    3) Image.

    The pursuit of money for #1 is justifiable and a basic individual right. #2 is also reasonable and fair. It’s the last one, #3, that I think people struggle with the most. When we want to look like we are doing better than we really are, i.e. “keeping up with the Jones’ / Smiths’ / Lees'”, we abuse our call to duty (#1) and our right to pleasure (#2).

    Here’s a pretty good book on this topic – “Your Money or Your Life”

    http://www.amazon.com/Your-Money-Life-Transforming-Relationship/dp/0143115766/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1226505920&sr=8-1

  8. @Bleu
    I will definitely check out this book when I get a chance. Hopefully, it will be available at my local library. I used to struggle with image, especially since many of my friends are lawyers, bankers and VCs. But I stopped caring once I got married. I used to like buying gadgets and other material items as well, but then I had my daughter and my material desires stopped.

    @Carla
    Sorry it took me song long to respond. It seems as though health insurance is one of your major obstacles. Judging by your comments, I sense that you already have a pretty good relationship with money. You don’t seem like the frivolous type at all.

  9. I think spending 50% of what you earn, investing 20% and saving 30% will make you financially very stable.

  10. At times couples are squabbing over money matters and their relationships affects
    a lot because of this. i too was one of the victim to this and i was adviced by one of
    my friend to get rid of this and i did …
    and did follow all the instructions given

  11. Wow… you have a great site here. I think I used to be a “seeker” myself, thinking that an increase in wealth would magically end all my problems. Much like you however… as I increased my profits, I only increased my stress! It simply wasn’t worth it, and I realized that having all the money in the world did you no good if you were constantly unhappy.

    1. @Travis
      Thanks for the comment Travis and welcome! I agree. Profits aren’t worth it if you are stressing yourself out.

  12. Money can provide security. Being financially independent means that you don’t need to suck up to a mean boss or stay in a job you hate.
    real money to me is freedom.

  13. Great post as usual Steve. I would say that I am a Hater-Seeker. I dont place much value on material things but want to earn enough money from a business to not work a normal job.

    I only had one problem with your entire post, and it is your future goal of travelling. You have three successful online businesses, two of which (your course and blog) can be run from anywhere. Additionally, I am uncertain on your level of automation or employee fulfillment help for your retail store, but feel you could easily swing some traveling now.

    Why put off til tomorrow what you can do today if it truly is a life goal/happiness factor for you? Take a vacation.

    Matt

    1. Hey Matt,
      Thanks for the comment. This post is actually quite old. I’ve gone on plenty of trips since then now that my kids are older:)

  14. Linda L says:

    Love your piece. I will be sharing this with my husband. I think you hit the nail on the head and give some good food for thought.

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