Understanding our Relationship with Money
Dennis Harhalakis is the Founder of Cambridge Money Coaching and a certified money coach. He talked to us about why so many people feel anxious about their finances, and the importance of building a healthy relationship with money.
How did you get into money coaching?
Anxiety around money may have nothing to do with how much you have. In my own life, I went through a phase of worrying about uncertainty, which manifested itself in extreme control, where I would spend as little as possible. Through coaching, I discovered that fear was the block causing this unease around money. And I learned to stop worrying and think clearly, to budget effectively and plan for the future.
It’s important to find someone who can give you a safe space and listen, not judge. So you can take the problem out of your head and talk about it. That’s where money coaching helps.
What is money coaching?
It’s a framework for how we think, feel and behave around money. This understanding helps us to make better decisions, reduces anxiety and other negative emotions, and enables us to communicate about our finances in healthy ways.
Money is central to our lives, and it is quite complex. Yet very few people have been taught how to manage their finances. As a coach, I help people to understand and manage the money in their lives. That includes addressing any issues they face around spending, saving and earning. I help people feel better about their current situation, and show them how to develop the behaviours that will get them to where they want to be, to build financial wealth and security.
Why do we get stressed about money?
Most of the problems people have, revolve around not understanding their finances (because they have never been shown how), and that makes them feel bad about themselves. Perhaps they feel uncomfortable about their spending habits, or being in debt, or not having enough savings. Or maybe they don’t understand any of it. And our brain is wired to keep us away from things that make us feel bad, so engaging with our finances can be really hard to do. It’s like wrestling with 200 million years of evolution! The lion in front of me right now is the one I need to worry about. Next week’s lion, or next month’s, or that lion in 40 years…they’re not on my horizon, I’m not wired up to concern myself with that.
And the trouble with money, apart from the fact that we have never been taught, is that it’s very tied up with our feelings of self-worth… and that triggers emotions of anxiety, shame, guilt, even jealousy or anger.
Those negative feelings signal that your relationship with money is not healthy. If a physical ailment was giving you pain, you would seek help and do something about it; and it should be the same with emotional discomfort, it’s just that we find emotions more challenging to address.
Why is it important to understand our relationship with money?
If you want to get better at something, then understanding your relationship is the cornerstone of that process: How do I feel about myself? How do I feel about money? How do I feel about money and myself? (It’s the same process around exercise or food for example.)
Think about aspects like: How did I learn about money? Why do I think about it that way? Is that helpful or not? Is my anxiety helping to protect me, or is it making me too scared to engage with my finances? Is it making me feel that I don’t even want to look at my bank statements, or think about planning? Once you understand this relationship, then you can begin to improve it.
What does a healthy relationship with money look like? And how do you start building that?
Our relationship with money is based on three things:
- How I feel about myself
- How I feel about money
- How I feel about money and myself
Let’s start with ‘myself’. People who are confident with finances feel good about themselves: ‘I am competent, I have confidence in my knowledge and decision-making processes. I understand that mistakes happen, and I take ownership of my outcomes. My self-worth does not depend on my net worth or possessions.’
When I feel good about money, it’s simply a means to achieve wellbeing, just a tool we use to make buying and selling stuff easier. It’s not the root of all evil, or something we don’t talk about, and it’s not this confusing thing that I don’t understand.
When I feel good about money and myself, then thinking about money doesn’t make me feel anxious, regretful or ashamed. I am comfortable dealing with the financial system and can manage my finances well. I am happy to ask for help if I don’t understand something financially related. So, that is the core part of having a healthy relationship with money.
But this has to be shown and taught to people. For example, if your family didn’t save, and that behaviour wasn’t modelled for you as you were growing up, then you won’t do it naturally; you’ll struggle to understand why or how to save. If you come from an environment where people didn’t talk about money, or had challenging circumstances, then money management is something you’ll have to learn. But that’s OK, you can teach yourself this stuff.
The starting point of developing a positive relationship, is to tease out those self-limiting beliefs, and understand your behaviours and attitudes around money. Be compassionate with yourself. We might make some bad decisions and have to take responsibility for the mess we’re in, but we didn’t choose to be broke or feel anxious. So, don’t feel guilty and don’t be ashamed to ask for help. Start thinking ‘how do I develop a positive, conscious engagement with my money?’
To find out more, or to contact Dennis about coaching:
We have produced a series of videos with Dennis, in which he explains how to build a positive, healthy relationship with money, including tips on building long term financial security, budgeting, saving and investing.