Money is something that makes us all feel uncomfortable. I see it from every walk of life in every stage of the money game. whether rich or poor or somewhere in-between.
I don’t care if you are the most successful businessman or someone struggling with a tremendous amount of debt, we are all programmed to avoid things we fear and money is something foreign to us that causes fear, take budgeting for an example.
That is one of those things that go bump in the night for us.
Many of us have been taught to think of a budget as a weapon of mass destruction, a tool that sets us up for self-flagellation. The self-defeating thought process is often, “I’m going to set a budget and beat myself up if I can’t keep to it, so I’m not going to do it at all.” It is similar to a diet that you ignore and instead of altering your approach, you mentally destroy yourself as you reach for a doughnut or some candy.(1)
This has got to stop. We need to change our mentality when it comes to money.
I think of a budget as a diagnostic tool. It is no different from going to the doctor and having the nurse take your temperature and blood pressure. They are establishing a baseline for your health. A budget is a baseline for your financial wellness.(2)
Your doctor doesn’t beat you up when it’s discovered you have a certain condition. He’ll give you information to fix the problem or improve it. A budget is just that, a diagnostic tool in which we learn where we need to improve our financial condition.
If a doctor told you to exercise regularly or reduce your sodium intake, you would listen. Well, I am not a doctor, and I don’t play one on TV, but listen when I urge you to look at your soon-to-be-born budget a different way. It is not a setup for failure; it is a prescription for long-term success.(3)
Creating a budget can be a happy occasion because creating a budget allows you to get an understanding of where your money is allocated and what changes will help you get what you most want out of life. That’s right, creating a budget can cause happiness, not stress!
So how do you get started?
Before you get going on the nuts and bolts of creating a budget, I have found it very helpful to focus on shifting the mindset first. While changing your mind is not always easy, it is possible, and you can start by following these four steps:
Before we can make any significant changes in our lives, we need to become aware of our money challenges. We need to look at them for what they really are, even if they are not pretty (and they often aren’t!). When we really allow ourselves to feel a bad feeling for what it is, we usually want to get rid of it more than we want to keep holding onto it. That is when we’ll know were ready to start making some changes.(4)
One example is the realization of the discomfort experienced when avoiding things like filing taxes by April 15th. Instead of taking care of the issue in a timely way, prolonging the problem causes greater stress later on, not to mention financial penalties. Becoming aware of the habitual approach taken when it comes to money responsibilities allows us to feel whatever we are resisting and see that it isn’t as bad as we thought.(5)
Accept what is.
Even if it means feeling uncomfortable inside, acceptance has got to come from deep inside. By allowing our feelings to exist and giving ourselves permission to experience pain, we open the door to acceptance.
Money often brings up feelings of guilt, shame, greed, anger, and frustration, which are all emotions we work very hard to avoid feeling. Understanding our natural resistance to these feelings is useful, as it takes the emotional charge out of the resistance and allows us to think more objectively. Seeing how whatever we resist has a funny way of persisting helps us to step back and accept what is.(6)
It may have felt like avoidance was the safest option in the past when it came to money, however as we shift into acceptance, we see how important it is to have a way to diagnostically understand our money and our feelings about it.
Allow change to occur.
When we diffuse our emotions, we are able to step back and shift our attention towards discovering the deeper cause of our feelings. This allows us to recognize our money patterns, as well as the root cause of our avoidance. I have used this process for years, as it helps get to the bottom of why we do the things we do. Avoiding money-planning tools often connects into fears of not having enough. Once we discover our secret feelings, we can recognize that while this may have been a past tendency, it doesn’t have to be our long-term reality. Seeing that change is not only a possible but necessary step for taking responsibility for our own happiness allows us to realize how budgeting can be a great way to learn about the numbers and our personal tendencies at the same time.(7)
By the time you arrive at this step, there will be much less resistance to creating and maintaining a livable budget (or whatever you wish to call it). In fact, you may feel a sense of excitement because you see that your old way of thinking has shifted into wanting to create your own path to success by harnessing greater control of your money. Using the budget as a diagnostic tool makes a lot of sense and is clearly the best way to move forward.
Knowing where you are with your money helps you take action if and when change is necessary, so you can live proactively versus reactively. Too little money coming in represents an opportunity to either cut expenses or to earn more money. In fact, I have met several people who had so much fun being creatively frugal that they actually made businesses out of their hobby, proving that you never know what may come from changing your mindset.
An example here would be a woman who created a budget which helped her to realize that she was running a deficit of several hundred dollars which in turn caused her to increase her debt load substantially. By controlling some of her expenses she ceased adding to her credit card debt and she found ways to begin to pay it down which created less stress and less impulse spending. She also found a side business selling jewelry which gave her the ability to splurge from time to time. She found that in the end having a budget made life a lot easier and more enjoyable because she knew that anything was possible now that she knew where her money stood.
So now you have some ideas for shifting your mindset so that budgeting becomes easier and more enjoyable. Seeing it as a diagnostic tool, rather than a painful weapon, places you in control of your money rather than it being in control of you.(8)
By following these tips, you can easily create a livable budget, one that will help you achieve peace of mind and get rid of many financial worries.
So what about you? Do you have something in place to help you change the way you look at your money?
So much of what I have above is from the WealthClinic. She is truly an inspiration when it comes to money mindset.Dream BIG... the possibilities are endless!