Financial Health: Is Money Your Friend?

The way you treat your money shapes your financial situation. Consider these questions to pinpoint how you can improve your relationship with money.

March 1, 2007

Whether you know it or not, you’re in a relationship with money. For some people, it’s a strong relationship that began at a young age; for others, it’s always been a little bit rocky, regardless of how successful their business has been.

The bottom line: The way you treat your money will determine how money treats you. Your actions and attitudes about money will shape your financial health, your retirement plans, and your overall happiness.

So, how strong is your relationship with money? To find out, pretend for a moment that money is a person, not a thing, and consider these five questions:

  1. Do you treat him/her with respect? How do you treat the money you have? Do you ever misplace money? Is your money all over your purse, house, car, and coat pockets? Or is it neatly in your wallet where you know how to find it?
  2. Do you keep your word to him/her? If you set a budget, do you stick to it? Do you have a written document that guides your spending decisions? Or do you keep your budget in your head and only refer to it in emergencies? Do you promise not to overspend and then do it anyway?
  3. Do you know what he/she does every day? Do you know where your money goes throughout the day? Are you surprised when your wallet is empty? Do you have a concept of how much you’re spending and on what? Do you know how much money is in your bank account?
  4. Are you building a long-term relationship or is he/she just a casual “when you have time” friend? Do you dedicate time to plan for your long-term financial health? Do you have a growing savings account or investment account? How much debt do you have? Do you have a plan to pay it off? Are you aware of how much money you will need to live on when you retire, and are you actively planning for retirement?
  5. Do you blow him/her off when you don’t have time or energy? Do you ignore bills when they come in, and then miss due dates? Do you avoid looking at your bank account because you’re afraid of what you’ll see? Do you not pay attention to your spending because “you don’t have time”? Do you delegate your financial record-keeping to others and then never review it?

Improve Your Relationship

All of the questions above are indicators of your relationship with money. So, what do you think? If money were a person, would it be your friend?

Even if your answer is yes, there’s always room for improvement. By paying closer attention to what you spend, save, and earn, you’ll be setting the stage for a strong and lasting friendship.

While on your road to a better relationship, you should do what you would to improve other areas of your life. Ask people who you respect for their ideas on how to build wealth, and read books on the topic. Some that I’ve found particularly helpful are:

  • Secrets of the Millionaire Mind: Mastering the Inner Game of Wealth, by T. Harv Eker.
    From the book: “Just as there are ‘outer’ laws of money, there must be ‘inner’ laws. The outer laws include things like business knowledge, money management, and investment strategies. These are essential. But the inner game is just as important. An analogy would be a carpenter and his tools. Having top-of-the-line tools is imperative, but being the top-notch carpenter who masterfully uses those tools is even more critical.”
  • The Money Chi, by John Alexandrov.
    From the book: “Money has been a source of pain throughout history. Religious orders have renounced it. Vows of "poverty" have been taken. Beliefs arose that poverty is a virtue. The simple truth, however, is that money is innocent. Money is pure. Money doesn't care where it goes. The only thing that can distort the decency of money is our attitudes and paradigms towards it. Money is a resource, always at our beckon and call, just waiting to be summoned for our intended use.”
  • The Energy of Money, by Maria Nemeth, Ph.D.
    From the book: “Acquiring information and advice about how to manage or invest our money is easy. The trick is to act on the information, to do something that improves your life and the lives of those you love. That's what wielding the energy of money is all about.”

Whether you read books, talk to a financial counselor, or create a budget you actually follow, the most important thing you can do is to make a decision to become better friends with money. From there, you can take steps to reach your goals. Remember, the more you can make friends with money, the more money you will have. So get out there and start improving your relationship today.

Kelle Sparta is the author ofThe Consultative Real Estate Agent: Building Relationships that Create Loyal Clients, Get More Referrals, and Increase Your Sales(AMACOM, 2005). She is also the founder of Sparta Success Systems , a real estate training company.