Your money and you
A five-part series on personal finance basics
BY LANA SANICHAR
This is the first of five articles about personal
money management. Throughout the series, you
will learn how to change your relationship with
your finances, maximize your income, minimize
debt and start investing.
IF YOU don’t understand money, you’re not
alone. Just thinking about it tends to create fear
and anxiety in most people. And many simply
choose to avoid the conversation because it is
such a large and complex topic. You likely have
numerous stories of moments in your life when
you have had a less-than-glamorous relationship
with money. The first step in changing this relationship is recognizing where you have been.
Think about it
Every day, without knowing it, you make dozens of decisions that affect your finances. Are
you a saver or a spender? When you shop, are you
looking for sales or paying full price? You likely
have a cellphone, internet service and you may
even have a mortgage. What about debt? And
How you earn, spend and manage your
money is a reflection of your personal views
about it. And they help form your habits.
The formative years
Many of your money beliefs and values were
no doubt shaped by watching your parents and
by the environment in which you were raised. My
husband, for example, who has difficulties spending money, was raised by parents who saved
every penny for their retirement. They regularly
sought coupons to maximize their purchasing
power. My parents, however, wanted to experience life well in advance of retirement. We dined
out, travelled and generally purchased whatever
we required without a second thought. I tend to
carry the same attitudes. Or maybe you watched
your parents make mistakes with their money
and are choosing to do exactly the opposite.
Besides your parents’ actions, your child-
hood environment has an impact on your rela-
tionship with money. Did you live in an
apartment or a house? Did you take family trips
abroad or locally? Did you work as a student or
did your parents pay for everything? Were you a
one- or two-car family? Or maybe you didn’t have
a car. Your history shapes your expectations,
needs and wants in your adult life.
Ask yourself if the attitudes that were modelled for you and the environment you were
shaped by are working for you in your adult life.
Laying the groundwork
The following steps can help you form a positive relationship with money.
Recognizing money’s importance. Being aware
of and recognizing the importance of money is a
great first step to developing a healthy relationship with it. After health and family, money is
one of the most important areas of life, and
being conscious of the role that money plays is
the first step to understanding it.
Changing your money mindset. Be prepared to
try something new. By changing your money
mindset, you are more likely to make better decisions where your money is concerned and solving problems around money will become much
easier. (Stay tuned for details on how to do this in
next issue’s column.) You will feel and act differently toward your money. With a more positive
mindset, you are more likely to take action.
Taking action. Once you recognize the role
that money plays in your life, it’s time to do something. By setting short-term and long-term goals
you will allow yourself to maximize your income,
minimize your debt and manage your money in
order to improve your relationship with it.
Yes, money can create a lot of undue stress
and fear, but it doesn’t have to. By recognizing
how you identify with money, acquiring a little
bit of knowledge and setting goals, you can overcome your fear to create a healthy relationship
with your finances. C
Lana Sanichar is president and editor-in-chief of
Canadian MoneySaver magazine and co-host of
The MoneySaver Podcast.
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