The ‘B’ Word

In my last post, I described a few money mentalities that I think are pretty common yet can be very damaging to our overall happiness with life.  Because, like I hesitantly wrote then, how we handle our finances has a direct impact on how happy we are.  Does that mean the more cash in my pockets the bigger the smile on my face?  Definitely not.  But I do think that means we cannot ignore this area of our lives as we continue on our journey to greater joy.

            So what does a healthy relationship with money look like?  If I had to sum it up into one neat, little phrase, it would be this: money management.  The three categories from my previous post were all examples of not really managing your money.  Ignoring how much money you have is not at all managing it – it’s avoiding it.  Hoarding and materialism, on the other hand, are like two sides to the same coin.  In both, inanimate objects are controlling people instead of the other way around.  There is also a tendency for people in these camps to look to money for gratification in ways money alone cannot give, such as control, peace, or contentment.

            What do you think of when you hear the word management?  To me, it makes me think of people who are ‘large and in charge,’ so to speak.  When you are managing your money, you know how much you already have, how much is coming in when, and where all that green is going.  How can someone realistically stay on top of all that information?  While there may be a variety of methods people use, I think one of the most essential ways is to budget.

            I LOVE budgeting.  Don’t get me wrong – it has been frustrating at times, especially when my husband and I were first starting with it.  But knowing how much money we have in the bank (we share both a checking and savings account), how much we should earn in a given month, and exactly where all that money went once it has been spent is extremely empowering.  With student loans or other debt, bills (being an adult means SO many bills!), essentials to buy, and – hopefully – some fun to be had, I think it can be all too easy to feel overwhelmed by finances.  But budgeting is a way to know you are in control, even in those trying times when it may not feel like it.

            We used two very helpful resources to begin budgeting back when we were first married. The first was Dave Ramsey.  We had one of his books, and while I think that is a great investment to make, he also provides a lot of information and resources on his website.  Some people are crazy hard-core into his program, and I can understand that, especially because a lot of these people seem to have had out-of control spending habits and/or a growing amount of debt (especially with credit cards).  Neither of these issues applied to us personally, so we take the money wisdom he offers and apply the parts that work for us. One of his main concepts that we strive to stick to is the ‘zero-based budget.’ This is basically his way of stating the (often forgotten) obvious: don’t spend more than you make.  

            The second irreplaceable resource we use is Mint.com.  I’m sure there are other free, online budgeting options, but this is the one we really liked and chose to implement.  It’s very easy to use, can be linked to debit cards so purchases can be automatically categorized within your budget, and has many helpful tools for managing money.

            I’m coming to the end of this post, but if there are any questions you have regarding the details of budgeting and/or money management, please comment and let me know!! I have a feeling that this topic may be just beginning : )

Moolah on the Mind

            The free-spirited, barefoot hippy in me wants to start this post with a proclamation that money has absolutely nothing to do with happiness.  And I really like to believe that, someday, that will be true, and that maybe that is already true in certain pockets of existence.  But today, at least in the part of the world I inhabit, money and happiness are very much linked together.  Because if I don’t have enough money for the food needed to keep my stomach full and my body working, I’m inevitably going to be grumpy.  And if I cannot afford clothing to cover that body, I’m not going to get very far before my butt-naked self gets thrown into somewhere not very nice.

            Of course, the above examples are extreme.  But the truth is that we use money to help fulfill all kinds of needs and wants in our day to day lives.  And unless you want to begin some kind of communal sharing living situation (which came up in pretty much every other conversation I had throughout college [if this sounds appealing to you, check out thesimpleway.org]), you will have to develop a good relationship with money in order to experience happiness.

            Allow me to be crystal-clear: I am in no way saying that having more money equals having more happiness.  I do not believe that is how it works.  But I do believe that there are a few very common – and dangerous – mentalities concerning money that make being happy more difficult.

  1. Ignorance – It has been said that ‘ignorance is bliss.’  Not with money, people!  I am always in shock when a friend has no idea what is in their checking account, yet is swiping their debit card for dinner and/or a movie and/or a latte.  If this is your money management style, the fear of reality keeps you living in a fantasy world…until overdraft charges begin to pile up and you have to borrow money to cover rent.  Knowing you have very little money is not fun, but it can be the start of making some positive changes.
  2. Hoarding – Hoarding is a very sad and very serious issue where, basically, a person clings to certain things and is unable to get rid of them.  Hoarding can manifest in many ways, and one of those ways is with money.  This often has to do with control and the fear of the uncertain future.  This is not the same as saving.  It is an inability or unwillingness to spend money on anything but the bare essentials.  People who do this have such a tight grip on their funds in hopes that, when disaster ultimately strikes, they will be as prepared as possible.  Overcoming this mentality first requires a commitment to understanding the underlying causes.    
  3. Materialism – This is the classic ‘keeping up with Joneses’ where happiness is as elusive as the ever-changing desire for more and better stuff.  People of this mentality are constantly chasing contentment through material possessions, whether through shoes, cars, the latest technology, the nicest house, and so on.  But the problem is that, while sometimes a new item can help us feel happy, real happiness does not come from anything.  Often, people who struggle with this mindset find themselves feeling empty when the ‘new thing happiness’ wears off.  A good way to begin to change this is by shifting one’s focus away from material gains and onto other, more fulfilling parts of life.

So what does a good money mentality look like?  Tune in next time…!