From Fear to Freedom: How to Empower Your Relationship With Money

Most people have no trouble homing in on their primary relationships with spouses, friends, children, co-workers, and bosses. Yet we're "in relationship" not just to other people, but to everything that plays a regular role in our day-to-day lives. That includes our cars, our bodies, our homes, our jobs — and, of course, our money.

For many of us, oddly enough, this last relationship gets less positive personal attention and focus than anything else on the list.

This is especially strange when you consider how much worry, frustration, and stress arises from our relationship to money, how often it dictates our degree of emotional well-being, and how direct its impact is on every other relationship in our lives. Financial problems can smother your enjoyment of life like a wet blanket if you're not in command of that relationship. And you don't just cause yourself undue stress by ignoring your finances — you also miss out on an amazing opportunity for financial freedom and personal empowerment.

Like it or not, you and everyone around you is married to money — for better or worse, till death do you part. But not only are most Americans not in control of their financial condition — many actively avoid dealing with it. Why do so many of us try to evade something that plays such a key role in our everyday lives? Why is dealing with our money so unappealing, even painful?

The Greeks had a word for it

There's a simple, one-word explanation: fear.

I’m not talking about in-your-face, "Nightmare on Elm Street" fear. I’m talking about the kind of slippery phobia that shows up as procrastination, confusion, frustration, avoidance, and ambivalence. If you show signs of these behaviors whenever money is Topic A — and almost all of us do — consider yourself an official member of the Fear of Finances Club.

Unfortunately, membership in this club is not what you'd call exclusive. The vast majority of us procrastinate in dealing with our finances — despite the common-sense knowledge that procrastination erodes our sense of peace, adds frustration to our lives, and, in many cases, spawns lasting financial repercussions far uglier than what we set out to avoid.

Why? Well, it’s normal human behavior to put off tasks that seem unappealing or insurmountable. And given that most of us have no idea where to begin fixing our finances, it’s easy to see why being in debt is nearly as common as owning a car. It doesn't help that Madison Avenue works overtime to convince us that debt is no big deal. After all, who isn't running a credit card balance these days?

Recent events have also taken their toll on our will to face our finances. The stock market collapse, the blizzard of corporate scandals, and the enormous wealth that ethically challenged executives have sucked out of public companies have intensified the unpleasant aftertaste we experience when our thoughts turn to money. Our faith in the markets is deeply shaken — and, paradoxically, this shaken faith leaves us feeling so paralyzed that we shun the responsibility of dealing with our own finances, daydreaming instead of a magical fix, like a lottery win.

Replace ignorance with knowledge

Ultimately, the confusion and resistance that pervades our relationship with money results from simple ignorance: Very few of us know the basics of financial planning and budgeting. I speak from experience. At age thirty, I realized that I had no savings — and given that I was doing non-profit work, I had only the slimmest chance of meeting my financial goals. Beyond the truisms that "debt is bad" and "saving is good," I knew about as much about money and finance as I did about building a nuclear submarine from scratch.

My relationship with money was on the rocks; I was in a seemingly hopeless downward financial spiral. While the people around me seemed to be making money hand over fist, I was living off happy hours in an apartment the size of a U-Haul truck. Instead of wailing and wallowing, I was inspired by my dire situation to look for a new job — one where I actually had a chance of creating abundance for myself.

Happily, fate helped me face my fear of finance. As word spread of my desire for a new career, a friend hooked me up with a new financial management firm that needed a marketing director. Since I had absolutely no knowledge of this industry, a trial by fire awaited me. I had to educate myself on all aspects of finance, and pronto.

Before the interview, I literally didn’t know a mutual fund from a mortgage. The amount of information I had to absorb was overwhelming. I thought I'd never be able to digest the pile of data that had suddenly arrived on my plate. With tens of thousands of investment options available, I couldn’t imagine narrowing “finance” down to a manageable, comprehensible menu. So I invested in a "for dummies" version of a basic finance book.

What a pleasant surprise! Not only was the book useful in coping with my new position — it was filled with insights into my own financial predicament. I gleaned dozens of helpful, straight forward suggestions on money and investing. Every aspect of my new curriculum was directly related to my own potential for growing my net worth — and I realized that by ignoring that potential for so long, I'd missed incredible opportunities to create not just financial abundance, but also peace of mind.

Once I got past the fear and began devoting time and energy to learning how financial planning works, I had a sense of control over my future instead of feeling like a helpless victim. Educating myself about money took me from fear to freedom. And I learned that you don’t have to be a Warren Buffet to create financial abundance. Even a rudimentary knowledge of how money works can bring long-term financial and emotional security.

So congratulations! You're stepping into a new relationship with your money and into an educational process that will give you new control over your own life.

Cut through the fog

The first step to minimizing your confusion about money is to be fully aware of your financial condition. Some people are afraid to assess their situation, dreading the feelings of guilt, inadequacy, or fear that come from not having enough money. Some are afraid to order a credit report for the same reason. But it's important not to judge yourself, especially at this point in this process; it only keeps you from moving forward. So cut yourself some slack. Once you understand the details of your financial situation, you can move ahead with a budget and goals that will take you from where you are to where you want to be.

Many people take the first steps to creating a budget and stop there — terrified to take action for fear that a poor investment choice will "lose them money." The fallacy here is that if you lack a financial strategy and a full understanding of the opportunities that await you, you're guaranteed to lose. You can't make your financial problems disappear just by ignoring them. In fact, as many of us know from experience, they tend to snowball — or, in some cases, avalanche — into even greater difficulties. And while there might be more immediate pleasure in a shopping excursion, a TV show, or a Krispy Kreme, this is an area where short-term thinking robs us of long-term satisfaction. All in all, dealing with a little discomfort now in exchange for financial independence later on is a pretty decent bargain.

Life, like a profit and loss statement, has a bottom line. And if you aren't satisfied with your current situation, the cure is to overcome your fears, forego short-term temptations, and take committed action.

Intimacy with your money

Now that we've discovered our fear of finance, how can we shift this relationship from fear to freedom? How do we develop an intimacy with our finances that will help us build our credit and increase our net worth?

An intimate relationship to your money presupposes a full familiarity and engagement with your finances. You know where your money is and what your goals are; you've planned for a prosperous future. Intimacy also implies a willingness to take action and resolve those money issues that undermine your sense of peace.

To experience the full potential of this new relationship, let's consider the elements of intimacy between people and apply them to your finances.

Love

I may not love my money in the traditional romantic way, but I do love not worrying about having enough to pay my bills. I may not love my investments, but I love knowing I can afford to take a fabulous vacation. I might not love those green rectangular pieces of paper, but I love the security of knowing I can handle a financial emergency.

It's important to acknowledge your feelings about what money can offer you in terms of financial and emotional freedom and security. You can love the freedom from anxiety you experience because you're paying attention to your money — and it's repaying you with abundance and harmony. Your respect for the presence of money in your life is vital for another reason: Without an appreciation for it, you will diminish your ability to bring abundance into your life. Befriending your financial situation will help you go from where you are to where you want to be. To prove this, ask yourself: “Have my beliefs about money so far done anything to improve my life?” If the answer is no, it's time for a new approach.

Awareness

Imagine reading a book about your significant other — one that revealed every detail of your partner’s preferences, fears and passions, pet peeves, even their favorite fairy tale. This book would tell you where they want to be in the future, what their dreams are, what they hate and what they love. Think how much easier it would be to relate to that person — knowing what angers and what amuses them, which conversations to avoid and which to pursue.

Similarly, the more intimately you know your financial position and condition, the easier it will be to make wise choices that help the relationship flourish. Even if you have no assets or savings today, part of being aware is knowing exactly where you want to be in one year, five years, ten years, and straight through to retirement. This awareness will set the wheels in motion. If you don’t have a plan, you don’t have a prayer.

Vital to this aspect of your healthy relationship with money is establishing solid credit and having access to lines of credit should you want to finance a dream home, or start a business venture that has been rubbing at your psyche for decades. You can’t get from where you are to where you want to be if you don’t have a plan of action. Budgeting serves as a foundation for your future goals and provides a structure for creating the freedoms you want. Some people see budgets as confining. But within the framework of a budget lies financial freedom. Once people establish budgets and stick to them, their pride of commitment takes over and builds a foundation of self-esteem.

Willingness to Give and Receive

Almost any adult can tell you that a harmonious relationship demands a balance between giving and receiving. Without that balance — whether you're relating to your spouse or your money — your success is very much in question. Remember, virtually all relationships require that energy flow in both directions. There are many rewards to be reaped when you are willing to give and receive with a strong sense of commitment.

You can’t expect a relationship to flourish if you're not giving it your attention — and that includes your relationship with money. The more time and energy you devote to learning about money and finance, the more abundance you'll realize. Ignore your money and your money will ignore you, too; put nothing in and you'll get nothing back. Like a jilted lover, money will make you pay for your neglect.

Money is to be neither feared nor revered — but it does deserve respect as something that plays a constant role in our day-to-day lives. Invest time and energy in your relationship with money and the returns can be exponential, exceeding your greatest expectations. As in any relationship, the more energy you're willing to give, the more peace, fulfillment, and fun will flow from your relationship with money into your day-to-day life.

Consistency

Trust is the foundation of every healthy relationship — and one of the most active ways of building trust is to be consistent. Without consistency, harmony falls by the wayside. If you've been close to someone whose moods ran hot and cold, you know firsthand the emotional roller coaster ride inconsistency can be. You’re always on edge, worrying about the unknown. You spend your life walking on eggshells, waiting for the other shoe to drop. Compare that to a stable relationship, free of tension, anxiety, or drama — one whose constancy you can count on, day after day — and you'll see that consistency is vital to keeping a relationship healthy.

Without the commitment that consistency makes possible, no relationship will go smoothly. Just as giving a partner too little time, energy, and attention can trigger conflict or misunderstanding, failing to devote proper attention to your finances — you might even think of it as a fear of intimacy) — will generate arguments with yourself, internal conflicts that can cause frustration and fear.

Committing to your relationship with money means taking the time to stay informed and take action on financial matters that are looming large. You don't have to spend hours deliberating over your financial status — but you do need to be aware of your financial position and review it regularly. Making a weekly date with yourself to check in on your investments or budget or savings plan (call it "Money Monday") should be a consistent part of your routine. Spend 15 minutes to one hour reviewing your financial situation. Make sure you have your money where it will give you the greatest return. If you're truly committed to investing in your relationship with money, abundance on all levels is far more likely to come your way.

Consistency in your relationship with money means regularly assessing your financial condition, creating goals for the future, and taking action to better your situation. Building and maintaining a solid credit portfolio is a vital part of that project. That means getting credit reports at least twice a year — or, better still, enrolling in a credit monitoring program to ensure that your credit rating remains strong and that no one is tampering with your credit, an increasingly common occurrence in our high-tech society. Tracking your personal net worth at monthly or quarterly intervals is an important way of bringing consistency to your relationship with money. Setting and regularly reviewing financial goals is another. Make a standing personal date to review your investments — weekly, monthly, but above all, regularly. You'll find a new continuity in your view of your own finances — accompanied by a very real sense of empowerment.

Devoting time and energy to your body through exercise, healthy diet, and regular check-ups will make you far less susceptible to illness and injury. Likewise, regular maintenance will extend the life of your car — and reduce the risk of a late-night breakdown in the middle of nowhere. The same common-sense principle applies to your investment and credit portfolios.

There is one caveat: Don't go overboard. You can generate just as much fear and anxiety through obsessive hyper-vigilance as you would by neglecting your finances. Over time, as your relationship with money finds a natural rhythm, you'll begin to trust this developing connection, and the result will be prosperity. The more energy, consistency, and attention you bring to your new relationship with money, the more freedom, joy, and security you'll experience — from this day forward, as long as you live.