Why Traditional Finance Advice Can Be Overwhelming
Traditional financial advice is intended to help us manage our money well, but it often has the effect of leaving us feeling overwhelmed and discouraged. We’re human beings and not robots.
We’re spoken to like we’re overly emotional and incompetent spenders who need to stop acting so foolishly when, in reality, our actions are just a result of the effect of scarcity on the brain. If we’re going to have any shot at implementing the well-intentioned traditional financial advice, we’re going to have to take a detour through some basic abundance mindset work.
Many people approach their finances from a place of fear and scarcity or a belief that they have to suffer before they spend. What if there’s this horrible emergency and you’re left with nothing but excessive credit card balances? What if you get laid off and can’t find a job that pays enough? Throw every dollar you can at your debt – you can go out to eat when it’s paid off in seven years!
This might work for some people who are motivated by avoiding guilt and shame, but for those of us who run in the other direction when those feelings come up, we need a better approach.
Use Your Emotions as Inspiration
In order to incorporate better financial habits into our lives, we need to stop relying on willpower and overcompensating with logic. It doesn’t work, and as soon as we see it’s not working, we give up. We assume that we’re in over our heads and just not that good at this money stuff and never will be.
Without dealing with these feelings of shame, guilt, and fear around our money habits, it’s difficult to escape the feast and famine cycle of money management. Doing the logical thing will never become a habit until we get clear on why we want to change.
This is where your feelings and emotions are so important. Rather than trying to overcome them, use your thoughts and feelings as a tool to inspire and motivate, rather than as an obstacle. It is more effective to tap into emotions and use them in our favor rather than overpower and disregard them.
Consider how your life will change once you manage your money well. What does it look like exactly? Why do you want that over what you have now? What are you afraid of when that happens? Look at at it holistically as you consider how other areas of your life will be affected.
Get Clear on Your Goals and Values
It’s funny how easily we can contradict our values. We can say that we value spaciousness and security but then turn around and actually clutter up our credit cards with bills for lots of stuff.
Until you get clear on what you’re working towards and why it’s important to you, you’re not going to be committed to changing your destructive financial habits. Nothing you do will feel good enough unless it’s aligned with your own personal values.
If your financial actions are aligned with your goals and values, it might feel good to contradict traditional finance advice. Perhaps that could be keeping a balance on your credit card for a little while – assuming you also know exactly how much it will cost you in interest and whether not waiting is worth it.
Keep it Simple
So much traditional finance advice is obsessed with “beat the system” type tactics and trying to control everything. So much of life is uncertain so it’s best to just leave some wiggle room for the surprises.
For example, the average budget has way too many categories. I keep my budget categories to fixed expenses, goals (savings and debt repayment), and flexible spending at your discretion. Having a flex spending budget that you can track weekly for things like food, gas, and entertainment is much easier to manage that knowing the exact amounts you have budgeted for each individual subcategory.
We are already overwhelmed with constant decisions to make. Try to minimize the time you need to spend thinking about money. Put as many payments as you can on auto-pay or keep a calendar of due dates handy so you’re not trying to consciously remember too much. Leave space at the forefront of your brain to consciously consider your goals and values.
Find the Abundance
The last step to having a healthy, balanced relationship with money is believing that you can. The word “budget” is associated with scarcity and restriction. However, I see budgets as a container to manage our own boundaries. We place borders around spending in one area so that we can protect the money we’d like to put someplace else.
If boundaries are encouraged in relationships and our work lives, why do we feel so limited by them in our financial lives? If you’re not enjoying your budget, you’re doing it wrong. Rather than looking at your budget and seeing how little you have available to spend, approach it from a growth-minded perspective of the abundance that you have money available to spend.
When you spend the money you’ve budgeted to spend, focus on what’s on the other side of those transactions rather than how “little” you have left. Look for the haves and not the have-nots. We can probably find some food in our pantries or a decent outfit in our closets. Let go of perfection and embrace the abundance around you.
Good financial habits take practice. We all make mindless money mistakes but we also can always earn more money. Embrace the ebb and flow of your cash-flow and stop fearing what you want to improve. As long as you are mindfully acting in alignment with your goals and values, you’ll be able to implement traditional finance advice and fund the life you want.
Michelle Bobrow is a financial coach and founder of The Holistic Wallet where she helps creatively-minded executive women practice great financial habits so they can fund the lives they want. Michelle went from being a shopaholic to a personal finance addict to realize you can’t earn your way out of bad financial habits and now blends mindfulness into financial strategies to maintain a holistically healthy and wealthy lifestyle.
Last modified on December 12th, 2018