Why Do We Treat Money Management Like It's Rocket Science?

The basics of money management are not rocket science—set a budget, make more than you spend, have a savings account, pay off your debt, and plan for the future. It seems simple enough. However, how we think, emote, behave, and relate to money shapes our financial reality.

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As I counseled working professionals, I became increasingly interested in the psychology of money. I started to see how my clients’ past traumas and beliefs about money impacted their bottom line positively and negatively.

While the concepts behind money management and financial goal setting are pretty easy, putting them into practice can be hard. Popular radio host and author Dave Ramsey believes that financial success is all about your ability to control the person in the mirror. Your thoughts, feelings, attitudes, self-care, goals, motivation, and support directly impact your finances. I, too, believe that self-love is a significant factor in financial success. In fact, in my book, The Financial Mindset Fix: A Mental Fitness Program for an Abundant Life, I’ve identified 12 mindsets that improve mental health, relationships, and financial prosperity, and self-love is at the top of the list.

Move From Scarcity to Abundance to Increase Your Bottom Line

As you embrace your self-worth and expand your thinking to welcome abundance into your life, you can shift from a scarcity to an abundance perspective, unlocking the doors to a more expansive, supported, and prosperous life.

In my practice, I've noticed that when people were making progress in therapy, they received raises and promotions, started successful businesses, and did better financially. Why? In therapy, no matter what issues we are working on, we are always simultaneously treating underlying feelings of self-worth or the value we place on ourselves. So, as my clients’ sense of worth improved, so did their finances—because of increased confidence, empowerment, assertiveness, and self-care.

Being in Denial Won't Make Your Financial Reality Better

Ask yourself, “What do I want to accomplish with my money?” For some people, the answer is easy. They know what shape their finances are in and want to concentrate on saving up for a down payment on a home or car or maybe start paying down student loans or credit card debt. Others aren't aware of their financial reality. They don't know their credit card or loan balances, interest rates, or credit score. As a result, they feel stressed out.

No matter what camp you fall into, the following money management tips can simplify the way you view your money and remove the perceived rocket science complications.

8 Money Management Tips to Change the Way You Spend Money

1. Stay accountable with your money. This can make the difference between whether you achieve your financial goals or not. It’s much easier to let go of goals when you never shared them with anyone.
2. Live with intention. An intention is a way of being or living, stated in the present, that supports the likelihood of your goals coming to fruition. Choose three to five short and positive intentions that support achieving your goals. For example, “I am not wasteful and spend wisely.” The more you repeat them, the more likely they will come true.
3. Support your intentions daily. In the yogic tradition, sadhana refers to daily practices that are a pathway to accomplishing something. Make your intentions your way of life and part of your daily life. Identify at least one personal, professional, and financial daily practice or sadhana.
4. Visualize success. Neuroscientists find visualization helps the body respond better in pursuit of desired outcomes. Close your eyes and pretend you have already achieved your goals. How does that feel? Do you feel different? Know that you are worth the action needed to achieve this feeling of positivity.
5. Be mindful about your spending. Before you make any financial decisions, ask yourself if it brings you closer to or takes you farther away from your goals. Check in with the wisdom of your body and notice how you feel about these choices in your gut, which is often a better guide than your thoughts.
6. Set a financial intention. Each morning, take a few minutes to connect with your breath and notice how you feel in your body. Set a financial intention for the day. For example, consider “I will spend wisely”; “I will attract new business”; or “I will research investment options.”
7. Replace self-sabotage with an inner dream team of support. Through cognitive-behavioral therapy and mindfulness practices, silence your inner saboteur and become your own loving parent (who takes good financial care of you), best friend (who expresses financial compassion), and positive coach (who expresses financial affirmation and belief in you) to improve your financial health.
8. Enlist outside support. Consider obtaining an accountability partner; find a friend who might also be working on their financial health and set up regular check-ins to hold one another accountable for your financial goals. Having a financial advisor is like having a personal trainer or coach for your finances—somebody who will motivate you, educate you, and hold you accountable. Find someone invested in coaching you to financial freedom. You can take financial classes to improve your knowledge. Consider a free, anonymous 12-step program if you are struggling with low earnings, compulsive spending, or debt accumulation.

Once you move past the intimidation of treating money management like rocket science, you can leverage psychology to improve your financial health.