Life principles that can lead to an unhealthy relationship with money

When my husband and I went through marriage counseling we had to develop a financial plan.  We didn’t necessarily have to come up with specific line items, but we were required to craft milestones for our first 5 years of marriage.  When faced with incompatibilities we were forced to explore what guided our individual money decisions.  Simply put, we asked ourselves: why were certain incompatible individual goals so important to us?

Ultimately, we realized each goal was shaped by certain principles that had nothing to do with money at all, but rather with how we viewed the world and our relationships with others.  These principles, to our chagrin, had the effect of feeding into certain unhealthy money-management behaviors.

#1: Fear of the future

Growing up I had this incessant fear of the future.  What if I didn’t get good grades?  What if I didn’t get into a good school?  What if I lost my job?  What if I needed to care for a family member?  What if my car broke down?  What if I got sick and there was no-one around to help?  I had a fear of both the distant future, and tomorrow.  This fear often fueled my drive to work hard and motivated me to fight through every challenge and obstacle that was in my control.

But it also drove me to save – and to save aggressively – with no particular goal in mind except to feel secure.  On its face this could be considered a responsible practice.  But my fear also drove me to ignore, and even de-legitimize, however irrational, other mechanisms of financial portfolio building.  Investments seemed foolish, as opposed to mechanisms to beat inflation and create passive income.  Credit cards were tools of destruction instead of a means to demonstrate financial responsibility.  And I never quite understood what equity was until I turned 25 years old.  Ultimately this “fear of the future” led to uninformed decision-making and an inflated faith in liquid assets that ignored smarter paths to financial freedom and independence.

#2: Appearances leave lasting impressions

I grew up with the idea that first impressions were everything and I obsessed over how others perceived me.  What did they think of my voice?  What did they think about my clothes?  What did others think of how I decorated my home?  My car?

When I landed my first job as an attorney in a private law firm, I was told that I could now start looking the part.  This made total sense.  I began to invest in my clothes, my jewelry, unnecessary Uber rides, but after a few months of splurging, I began to question the wisdom behind “dressing the part” (whether your income could support such a façade or not).

If it’s not already obvious, this principle led me to make unnecessary purchases: money pits of knick-knacks, too many black dresses, and expensive brunches with no substance to show for the time and money spent.  Truth be told, first impressions are lasting, but I have also learned that they are not everything.  With time, you will have a chance to prove yourself in more meaningful (and less expensive) ways.

#3: You are allowed to treat yourself

I had a friend who told me that I should always “pay” myself first.  This could mean anything from putting a little bit of extra money in savings for that one trip or splurging on that purse.  Another way this could manifest is in response to negative experiences – a breakup, a bad day, a lost opportunity, or an unexpected setback.  Essentially, “treating myself” meant rewarding myself in response to whatever positive or negative triggers I experienced.

This is an obvious budget buster and can domino into financial setbacks (often credit card balances) you otherwise did not plan for.  The naked truth is that it is easier to pull $300 to pay for a treat – because it elicits a positive emotional response – as opposed to paying off your larger than expected credit card bill (that you feel otherwise justified in only paying the minimum balance).  We all have experienced this financial domino effect at some point in time, and in my personal experience it is this principle that often leads to our finances spiraling out of control.  We must recognize that spending money in response to emotional triggers is counterintuitive to responsible living.