Do you feel blocked when it comes to money? Do you berate yourself for saving too little or spending too much? Do you wish you didn't worry about money constantly?
Stop right there and step back. Everyone has her own way of handling the brain-whacking prospects of earning, spending and saving money - a sort of financial style, if you will. Many of our money behaviors were formed during childhood, when we took cues from the way our parents handled money.
And some financial styles are quite healthy - a good saving habit, for example, or a strong work ethic. But if taken to an extreme, they can put you dangerously out of balance.
The descriptions below are examples of extreme financial styles. We've exaggerated the behaviors so you can easily identify them and their consequences. If you see yourself in any of the descriptions, be gentle. Remember - even the worst behaviors have a payoff. Otherwise, you wouldn't engage in them. In many cases, understanding the payoff is the first step toward changing the behavior.
The Unconscious Spender
You don't balance your checkbook. You write checks without knowing whether the balance in your checking account will cover them. Bank statements come in, but you can't bring yourself to look at them. You're busy, you tell yourself. You'll deal with it later. But later never seems to come, or it comes too late - after you've bounced a check or neglected an important bill.
Believe it or not, there is an advantage to this financial style. It is this: As long as you don't have a fix on your finances, you don't have to change. You can gleefully continue to spend without paying attention to the consequences.
The disadvantage should be obvious - you're headed for financial ruin. Your behavior is rooted in not wanting to accept responsibility for your actions. The sooner you face this, the better off you'll be. If getting your finances in order seems too daunting, call in a talented friend or a professional.
The Emotional Spender
You buy lavish gifts for friends. You own lots of clothes. You often return from shopping and realize you already own several items similar to what you bought. Many of the clothes in your closet still have price tags on them even though you've had them for months. At least one of your credit cards is maxed out.
If you're an emotional spender, you enjoy a similar payoff to that of the unconscious spender. Deep down, you're shopping to ignore something. Shopping seems to fill an emotional need, but only for a little while. Ironically, you may shop to abate your horrible guilt over spending too much.
Recognize that you're hurting yourself. It's dangerous to spend more than you have. Credit card spending may allow you to have more of what you want in the short-term, but it erodes your self esteem and restricts future choices. Find other outlets for your emotions. The next time you're tempted to shop your way out of a depression, remind yourself that it doesn't work. Instead, call a friend, take a class or go for a walk. More important, find a therapist who can help you deal with the source of the emotional problem rather than the symptom of spending.
The Bargain Hunter
You approach shopping as a sport. Every Sunday, you look forward to getting the newspaper so you can pore over the coupons and sale flyers. Sometimes you buy things you don't need because the price is too good to pass up. You focus more on how much you save rather than how much you spend.
The payoff is saving money, right? But what are you giving up? What is your time worth? Instead of the hours you spend bargain hunting, could you be with your family, pursue a hobby or build a business?
Try this experiment: For one week, skip the coupon clipping. If you're tempted to go shopping, ask yourself whether there's anything you really need, or if you're simply engaging in the sport of shopping. Making lists is especially important for you. By stopping to list what you need before you leave the house, you're less likely to get side-tracked by a great deal on something you don't need or want.
You spend only what you absolutely must. You feel uneasy when there's something you need to buy for yourself. You love keeping your money in the bank and watching it grow. And by all outward appearances, you're successful. So, why are you so anxious about the future? Why are you haunted by a fear of having nothing when you're older?
The payoff of being a hoarder is that you shut yourself off from life. That may not seem like much of a payoff, but when you're feeling fearful (and fear is what drives The Hoarder) shutting yourself off is comforting, in a way. Somewhere along the way, you told yourself that money would make you secure. And I don't mean secure financially, but more than that - emotional security. The ironic thing is - the more you save, the more fearful you become.
Realize that you're denying yourself current pleasure out of a fear of the unknown. You are pinching off your current life by saving for a future that never comes.
Participate in activities that will boost your confidence. Dream a little, and begin to put those future dreams into the present, in small doses at first. Force yourself to take a risk or buy something nice for yourself.
You crave excitement. You feel most alive when you're putting it all on the line, playing for high stakes. Nothing would bore you more than to watch your savings grow. If you have managed to save any money, it's only because you forgot where you stashed it.
The payoff to gambling is that it gives you the excitement you're looking for. The drawback is that it ultimately leads to powerlessness. And that loss of power hits you especially hard because you have a drug-like craving for it.
Recognize that your financial style isn't about the money; it's about the adrenaline rush. Take up skydiving or mountain climbing or something else to satisfy that profound desire. And practice patience. Automatic deductions were invented for people like you. If you don't see the money going into savings, it's relatively painless.
Whether or not you recognize yourself in any of the examples, the lesson is the same: Understanding what's beneath financial behavior is vital to having a healthy relationship with money. The key to mastering your finances is being honest with yourself. Once you identify the reasons behind a style that isn't working, you can change your behavior and live a more prosperous life.
Lyn Millner, CPA, has been a writer and editor since the age of eight, when she taped a note to the store window of a national beauty supply chain, calling the owners' attention to a grammatical error on the door. She writes marketing material and business plans and teaches entrepreneurs and employees how to write clearly. Contact Lyn at firstname.lastname@example.org.