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Similar to the ups and downs of yo-yo dieting when attempting to “eat healthier,” it’s common to get stuck in a loop of poor financial habits. Just as with dieting, your financial relationship is complex—it’s rarely a matter of being simply “good” or “bad” with money.
This is why, in many cases, creating a budget only addresses the surface. Sticking to a budget becomes challenging when there’s an underlying emotional issue driving your financial struggles. Here’s how to begin healing your money relationship and establish lasting, healthy financial habits.
Initiate the dialogue
When your financial situation is unstable, it dominates your life. Even if you’re not overwhelmed by debt (thankfully), the constant threat of a recession keeps you living in a state of uncertainty. This uncertainty makes it difficult to foster a positive relationship with money.
Discussing money can be challenging, but here are some questions to begin asking yourself and those close to you. To clarify: “Seeking help” doesn’t mean “asking for money.” It’s about freeing yourself from the shame that keeps you stuck in a negative financial cycle.
Start the conversation. How did you end up in your current financial situation? How long have you been facing these challenges? Have there been any recent changes? Do you need to break habits inherited from your parents? What are your financial aspirations? What small steps can you take, with others supporting you? Create an environment where openness about debt, overspending, and financial mistakes is encouraged.
Clarify your financial relationship
Once you’ve honestly answered the questions above, work on understanding your overall relationship with money. Everyone has a financial narrative—and it’s never as straightforward as “I’m bad with money.”
Continue probing into the origins of your financial struggles: How were finances managed during your upbringing, and what were your feelings about money once you gained independence? You might carry a persistent scarcity mindset, or financial uncertainties could have turned you into an impulsive spender. Once you grasp your overall approach to money, rewriting your financial story becomes more achievable.
Discover how to indulge mindfully
As we’ve discussed before, reacting too harshly to financial difficulties is a misstep. You can’t completely stop spending, so learn to do it without overwhelming guilt—the same guilt that perpetuates the cycle of unhealthy habits.
Building a healthy financial relationship involves indulging with intention. Ask yourself, “How do I expect this purchase to affect me? What emotions am I hoping to experience? What am I trying to escape by making this purchase?” Only you can decide what truly holds value in your life, whether it’s treating yourself to a latte from your favorite café or saving for an annual luxury getaway. Permit yourself to indulge, especially if it enhances your overall connection with money.
Consider financial therapy
The key takeaway is that enhancing your financial health isn’t as simple as saying, “I just need to clear my credit card debt” or “I just need to manage my budget better.” There’s a reason you ended up in a difficult situation, and that reason might require professional intervention.
We’ve discussed how to locate a financial therapist here. Financial therapy merges financial guidance with psychological analysis, helping you address emotional or behavioral obstacles to your financial stability.
You can start your search for the right financial therapist by visiting the Financial Therapy Association.
If you decide to explore financial therapy, approach it with an open mindset. Like all forms of therapy, it demands vulnerability and trust, and financial therapy is no exception.
