You don’t have to be a financial expert to know the basics of budgeting. There are plenty of tips that help people improve their saving and spending. We’re taught to prioritize our spending categories so our phone service doesn’t cut off “randomly” and keep track of where our money is going. These budgeting dogmas seem simple enough to incorporate into our lifestyles, but it’s often not so easy.
Personally, budgeting is an extreme struggle of mine. As I reflect on my journey to financial literacy, it’s clear I constantly avoided money-savvy tactics that would’ve helped me form a healthier relationship with money.
But not only did I ignore tons of money advice, I also created toxic practices that I’m still curbing today. I’m finally intentional with my finances and realizing the importance of investing in my future. It took time, but I’ve started applying basic budgeting tips into my life, which in turn has helped reshape my association with money.
What is “money disorder”?
I’ve made so many transactions purely out of willful irresponsibility, but I simply couldn’t help it. I kept asking what was wrong with me and wondering why I behaved like this. I know my depression and anxiety correlates to my cyclic misuse of funds, but now there are actual studies regarding a specific disorder associated with money. Money disorder, or financial anxiety, has yet to be recognized as an official diagnosis — but so much research, therapy and advocacy has been brought to this condition.
So, what exactly is a “money disorder”? Basically, people can develop a money disorder when they have bad money practices that ultimately make their relationship to money unhealthy and detrimental to sustaining themselves. Northwestern Mutual reported that 85% of Americans feel some level of anxiety around their money. Megan McCoy, therapist and Kansas State University faculty member, reported that 6% of women suffer from the informal diagnoses of compulsive spending disease.
I’d just assumed I was a reckless spender, but my behavior was indicative of much more. It’s encouraging to know I’m not alone, and that experts are doing the work to bring light to this issue. Between formal and informal money disorder diagnosis, people with troubling financial history may realize their mental health played a factor.
I’ve known what I was supposed to do with my money since I started making it. Budgeting tips became redundant by the time I received my first credit card during college, but I still maxed it out. Although I knew what to do, my actions opposed the tips. At one point, I didn’t find it possible to acquire savings, improve my credit score, and paid off debts.
Here are 5 tips I’ve attempted and failed miserably because of my struggle with money disorder:
1. Act your wage
We all fantasize about our dream life. It can be as grandiose as owning a fully staffed estate and a couple of islands, or as simple as owning a home and taking a yearly vacation. For me, my dream life involves making any purchase I want, whenever I want. My weekend errands run should include an impromptu shopping spree! If I want to randomly spend hundreds at the mall, it won’t hurt my pockets!
Perhaps my wish is actually compulsive expenditure, which is defined by Silverman + Associates as the urge to spend your money in order to “feel good.” My dream world seeped into my financial reality; I would make large random purchases on impulse. Now, these purchases did feel good, but shame and anxiety soon followed. I kept putting my necessary expenses at risk, and I’d regret buying all these unnecessary items. I noticed the pattern within each pay period and realized I wasn’t handling my money properly. This cyclic behavior was jeopardizing my chances of financial well-being.
I finally stopped this behavior, and I now appreciate the value of window shopping. Don’t get me wrong — planned shopping trips happen, too, but less frequently. I’ve also realized planned purchases are more exciting than buying things on the fly. Believe it or not, it brings as much joy as it does peace of mind.
2. Pay yourself first
Financial anxiety has a lot to do with how you view yourself. Reflecting on how I spent money helped me realize I honestly didn’t think about myself — at all. As soon I received money, anything from paychecks to gift cards, I felt an instant urge to spend it. Saving money wasn’t a part of my practice, and paying myself never crossed my mind. My lack of literal funds was indicative of not only my money disorder, but my lack of self-worth. I’d squander money because I never felt worthy of keeping any for my future. It never occurred to me that issues of self-worth plighted me, but much of financial anxiety is tied to our psychological perspectives. This painful but empowering truth allowed me to dig deep to find value in myself.
This is how so many of us fall into a paycheck-to-paycheck cycle, which we all know is a dangerous game to play. So, if you have the urge to spend, contemplate: what is the root of this urge? How do you view yourself? Build up your self-love, and watch your savings follow suit.
3. Track every expense
I’d get paid Friday and have my card declined Monday. Swiping my card carelessly left me in the dark on what I purchased. Neglecting my expenses went so far that eventually I wouldn’t even look at my balance.
Can you believe I was afraid of my money? Instead of staying updated with my accounts, I avoided my balance to gain a false sense of security. If it was payday, I would just start swiping. The few times I logged into my banking app, I’d get intense butterflies in my stomach. But I learned that keeping a record of my expenses should not be a traumatic experience, and with better money attitudes, I now look at my finances frequently. It’s best to stay informed. Checking your expenses also saves you from unauthorized charges. Even if it’s a small amount, track your money and protect your funds.
4. Budget to zero
Does every dollar really need to be accounted for? If I’m paying the essentials, can’t I just use the remainder on whatever I want? I covered all the big stuff, so who cares right? No! As overwhelming as confronting my money was, I needed a realistic view of my budget. Financial anxiety makes it tougher to sit down and thoroughly create a budget for all every dollar, but a fine-toothed budget ensures you have an accurate and reliable view of your money. Why create a budget that doesn’t even work for you? Look at your finances entirely so you can be secure in your spending.
5. Give yourself grace
This one is truly the hardest for me. My financial history led me to believe I wasn’t worthy of grace. I made so many major mistakes, from overdrafting to maxing out credit cards, to compulsive spending and late payments. I felt like a lost cause when it came to budgeting. But through understanding my condition and taking control over my finances, I can now be gracious with myself. I no longer think about money from a place of anxiety and fear. I now approach my expenses in a positive and proactive manner. Money is a complicated area for many, and there is hope for everyone to improve their financial literacy.
Thankfully, I’ve been enlightened and rewired to do better with my finances.
Instead of swiping blindly on payday, I check my balances multiple times a week. I’m sure to pay my major bills first and never surprised when my health insurance deactivates. Shopping trips are now executed with quality over quantity. I’ll gladly get up early Saturday morning and spend the bulk of my day at a thrift store. There’s something to enjoy about finding the perfect jeans in an oasis of old dusty clothes. And I actually have savings! It’s protected with my life, because I finally see that I’m worth it — I’m worth it all.
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