I have money problems.
You have money problems.
It's a fact of life.
You and I don't want our self-worth tied to our net worth, but sometimes… it feels unavoidable.
I'm not here to bum you out though. I'd rather help you create self-awareness and take action on improving your relationship with money.
So I've extracted the wisdom from a money research study for us to learn some lessons necessary to simplify, organize, and be money wise.
Are you ready to shed some seriously pesky – and dangerous – money problems?
Old Money Problems, New Insight
[People] have become so indoctrinated with the idea that having money is important, that they no longer question why. They are unaware that perhaps what they are truly seeking is an increase in self-respect, or security, or freedom, or love, or power. ~ Goldberg and Lewis
I recently read a New York Times article called Net Worth, Self-Worth and How We Look at Money and I suggest you read it too.
This article, combined with one I wrote for Lifehack called Why Chasing Money Is Worse Than Dogs Chasing Cars, starts to reveal the deep, dark underbelly of our relationship with money.
But most importantly, the articles highlight why we need research on our hidden or harmful money problems.
Collectively, we are all kinds of money messed up. But there's an antidote.
That's my summary of the research called Money Beliefs and Financial Behaviors in The Journal of Financial Therapy.
The research premise is to determine just how much money is stressing us out – personally and within a family – and also negatively contributing to our overall health.
So the researchers identified four distinct money belief patterns that most people fall into: money avoidance, money worship, money status, and money vigilance.
Here's a quiz to determine if you have one of these money patterns. Just answer true, false, or “I don't care/know” to these statements:
- I do not deserve a lot of money when others have less than me
- It's not okay to have more than you need
- People get rich by taking advantage of others
- Good people should not care about money
- Things would get better if I had more money
- It's hard to be poor and happy
- Poor people are lazy
- If something is not considered the “best,” it's not worth buying
- It's OK to keep secrets from your partner about money
- Rich people have no reason to be unhappy
- You should not tell others how much money you have or make
- Money should be saved, not spent
- People should work for their money and not be given financial handouts
- If you cannot pay cash for something, you shouldn't buy it
If you answered “true” to any of those statements, you could have one of the four money problems. I answered “true” to numbers 1, 4, and 12, which puts me at risk for having money avoidance and money vigilance tendencies.
I don't feel bad about it though. In fact, it motivates me to do something about it… and you can get fired up too.
But first, let's understand the four major money problems before identifying the solutions.
I gotta watch out for this one. Hell, if you look at my recent Pulse Check, you'd think I was allergic to money (or just not good at making it).
According to the research, money avoiders believe that money is bad or that they don't deserve it. Money is a force for anxiety, fear, and practical worries like checking account over-drafts or credit cards abuse.
These kind of people financially self-sabotage, defer even necessary purchases, or give money away so they have as little as possible.
There are at least two things that you can do if that description hits a little too close for comfort:
- Continue to age: You don't really have a choice about this one. But the research shows that our patterns of money avoidance consistently fall as we age. So if you want to ditch your damaging feelings about shunning money, just turn 80 (or keep aging).
- Know your net worth: As an avid Quicken user, I know what my net worth is (even if I don't care what the number is). Apparently, that's a good thing for dealing with money avoidance because research respondents who didn't know their net worth scored higher than everyone else on money avoidance beliefs. The researchers say, “No duh!” since money avoiders are by name not likely to be aware of their financial situation.
How about you? What other ways can you think of to combat money avoidance?
I used to have money worship issues before my personal renaissance began, but I've been cured. It's a miracle!
Do you need an antidote? The researchers said this about money worshippers:
‘More money will make things better' is the most common belief among Americans. Individuals who subscribe to this notion believe that an increase in income and/or financial windfall would solve their problems. However, there is a [scarcity] of empirical evidence to suggest that more money solves life problems.
Now, you're reading a website that declares “freedom is needing little and wanting less” and “give up the ‘good life' to pursue a great life.” So Value of Simple generally doesn't draw people who worship money.
However… demographic characteristics linked to money worshipers include being young, white, single, or having a tendency to carry a credit card balance.
Is that you?
Here are some resources to cleanse any unsightly traces of money worship whether you think this is you or not. Just in case.
- Devour Becoming Minimalist: Joshua Becker is a fan favorite and required reading if you want to further simplify and minimize. Reading his articles on loving money, discovering new questions to ask, and stopping the endless comparison are a good start.
- Enjoy The Minimalists: Ryan and Joshua are shining examples of what happens when you reject materialism and embrace an intentional life. They know well not to try to fix the problem with the problem (money related or otherwise).
- Other good reads: The Power of Enough is a quick read by Sean D'Souza and great for business owners who might forget why they started their business. If you like the paleo scene or a fresh take on the topic of simplicity, Mark Sisson has some guidance for you about money problems and consumption.
But what happens if it's money status that's an issue?
Money = status. At least for some people.
The research says that money is status to people who connect self-worth and net-worth (and that's just about everyone at some point).
Competing to make more money than everyone else can result and – what's worse – being materialistic has been associated with:
- Lower ratings of well-being (Tatzel, 2002)
- Lower levels of personal potential (Kasser & Ahuvia, 2002)
- Less vitality and emotional happiness (Kasser & Ahuvia, 2002)
- Higher levels of anxiety and physical symptoms of unhappiness (Kasser & Ahuvia, 2002)
We can do something about this as well though.
- Gain self-confidence: Easier said than done, but there are people who can show you how. I also strive to be a beacon of self-confidence and I hope you feel it when I write or speak.
- Squash the urge to compare: This works just as well for money status tendencies as it does for money worship. Maybe it's not all relative after all?
But what if you might be a money vigilante like me? Let's explore this last money problem before taking action to resolve any unhealthy money relationships.
I embrace the label of rebel, counter-cultural, and mad scientist. But vigilante? No thanks.
The trouble is I might actually be a money vigilante according to the research.
You see, money can be a deep source of shame and secrecy, whether you have a little or a lot (Klontz & Klontz, 2009). And in one survey, forty percent of people reported that they had lied to their spouse about the cost of a purchase and/or said it was OK to withhold financial information from each other (Medintz).
Well, it's clear I don't have money secrecy issues. And my monthly family financial check-up with Melinda ensures nobody lies about a purchase or withholds financial information.
But I've felt guilt about how much money I have. I suppose that's because I still compare myself to others and realize my abundance makes me highly financially fortunate. Sadly, gratitude is not an antidote for guilt.
So what could help a money vigilante? Try these on for size:
- Speak the truth: The lies we tell ourselves are the worst. To combat this, let's find 49 lies we tell ourselves and determine how to speak the truth instead. Are you up to the challenge?
- Sunlight is a powerful disinfectant: You don't have to show the world how much you make. But this whole cultural taboo of talking about our income and how much we're worth is madness! It's the fear of being judged that drives this insanity, but there's a solution for that too. For an experiment, try revealing how much you made last week to a friend or family member. Did anything bad happen? Then try it with another person… and another… and another…
Whether it's avoidance, worship, status, vigilance, or something else, we could all stand to resolve some money problems. Am I right, or am I right?
We Shall Overcome
Maybe you just read this and decided that you don't need to do anything.
But some of us might want to embark on a quest for a better relationship with money. That can be done with a Personal User Guide, working towards a world without money, or in various other ways.
I want to see a world where money isn't the biggest cause of stress – not just for Americans – but all over the world. Imagine a world where money is a by-product of helping other people and living our core values.
Wouldn't that be amazing?!
Yet, there are people already doing it. And by following their lead to resolve money problems, you can too.
You can make money something you hate, struggle with and resist, or make it something you feel ease, joy and non-attachment to. You can be a slave to it, or a steward of it. You can use it to change the world, or let it get in the way of you doing your great work. And one thing is true, if you want to get paid to be who you are, working for yourself, you're going to need to come to a positive, sustainable relationship with money. Without a loving, or at least amicable relationship to money, you're setting yourself up for a lot of hardship. ~ Jonathan Mead
What steps will you take today to settle a money problem? Tell us in the comments.