My Relationship with Money
This month I’ve been scared to look at my bank account.
*Raise your hand if you’re here, too.*
In the scheme of things, my money situation in-no-way near terrible, but that doesn’t mean it doesn’t give me anxiety. At first I was totally against getting a credit card, and for a long time I only used a personal debit card. And while I’d overdraft almost every month, I literally couldn’t spend more than I had.
But now I’ve got this credit card where it’s zero interest for a year, and I’m in the hole. BUT this is all based on some life + work investments I’m making. And you know what, I think it’s ok.
I’m in this interesting spot where I’m in full risk + leap mode. It just feels like a time to gamble a bit in this game of life and let it ride. I’m right on the edge between rocketing up and exploding in flames. But if you don’t throw down your chips sometimes you’re never going to see what your potential is.
This is a sensitive topic. Since I’ve been thinking about it, I thought I’d share some thoughts I have about money that I personally follow.
Note: I’m obviously biased; I’m 26, and I work for myself, and currently have no home. But I thought they might spark some thoughts on your end.
1. It’s better to make more money than to save more money.I don’t mean don’t save anything, or to not keep a smart buffer for yourself. But right now all of my work income and dedication is about upping the total amount of money I can bring in per month, and making that continue to increase over time. It could be side gigs, multiple income streams or a long term strategy for a significant increase in your money earning potential. The goal is to find ways to increase the total pool of incoming cash.
2. Don’t parallel your increase of cash with an increase of lifestyle. I’ve written about this before, but we all tend to follow this life-money curve; we start making more money, so we instantly start spending more money. It’s kind of like how the bigger the grocery basket we use at a grocery store, the more we buy. If you can keep your lifestyle around where you’re at now, and then bank more cash, you’ll be sitting way easier when it comes to budgeting. Don’t grow overhead with a growth in income.
3. Investments always take a long time to pay off. Whether it’s your stocks, your career, or financial investments of school, plan on things taking years or decades before they pay off. Every thing is the long hold. There are no shortcuts so forget about them and adopt the long run mindset.
4. But know when to cash in. Working on a project where you should get paid more but you’re not asking for it? Have the ideal time to sell off something when it’s of value? Timing is really hard to finesse, but there are for sure times when you should strike when the iron is hot. I’ve made this mistake before, and these moments of getting full value for your work are what give you the available cash to re-invest in other areas.
6. Invest in yourself. A serious portion of my potential income goes to a business coach, as well as books and opportunities for meeting new people or learning new skills. I pretty much buy any book that seems like it will add value to my life, no question asked. It’s a gamble, but If I’m going to take on any portion of debt I want it to be something that comes with a big potential upside return. The other majority of my cash spent goes to health related pieces of my lifestyle; yoga, a trainer, or healthy food.
7. Hit zero, so you’re not as scared of zero. Kevin Kelly talks about how once you learn that you can live on rice and beans, you’re actually more free to do what you want. You know what it’s like to hit bottom and you were able to survive there. There’s something freeing of living your life totally leaned down. Finding your edges makes you brave. Then, you can always go back to rice and beans, when it wasn’t so bad.
8. Find a service to barter. For me, photography is a great example of something that will get you so many perks in life. You can stay free places, get free food, you can get free stuff, you can swap favors for people, you can get into events for free.. the list goes on. Having something to barter with gives you leverage from your time, when you don’t have capital to support what you’d like.
9. Money is a story, and most of our stories about money are painful. The reason I’m scared to look at my bank account is because I’m telling myself a negative story about what my bank account means. And so many of us have negative stories from our past which have built a negative relationship with money. We tell ourselves “It means I’m not worthy.” “It means I’m losing.” “I’m going to die.” “no one will ever like me if I’m not rich.” And so on.. There are tons of things in our system that perpetuate a negative relationship with money for those in poverty. And that’s not fair. But one thing about people who have built wealth, is that they see money as a tool for helping make their lives better, instead of the thing that’s keeping your life terrible. To change my relationship with money, I did a Godin inspired practice of tipping 100% at a certain cafe. Every time I ate lunch their I would tip 100%. This sounds crazy, but it slowly reduced my grip on feeling the anxiety of scarcity when it came to money. I tried to hold onto it less tightly, and view it’s role in my life differently.
10. Ultimately you need more cash than you think, and less cash than you think. I’m in a lucky place in my life where I don’t need a huge amount of money. I probably don’t need as much cash as I think to be happy, and in fact most of my problems aren’t anything that cash will solve. That being said, having a family later in life and having some level of security, I know I’ll need a much bigger bump than where I’m at now. If you can learn to really enjoy your life without an extravagant lifestyle, you’ll need an adequate amount of cash to live on. Nothing wild like the multi-million+ crowd. But realistically, with a family I can’t be living on the edge without a serious negative effect to my life.
If you’re in significant debt, this post isn’t for you, and I would radically change my approach to cash. If that’s you, check outmy friend Jason’s post as it’s amazing on this topic.
I know we all have anxiety about this I wanted to share some things that keep me balanced when approaching my money situation. Or being scared to look at my bank account. By changing my story, by seeing the long term possibilities, by growing the pie and shrinking the overhead, I’m able to stay more focused on the task at hand rather than the lizard in the back of my head telling me I’m screwed.
So, for right now, I’m letting it ride.