Phil WestBy Phil West, WCI Contributor

If you’re in a bad relationship with money, you should change that. In fact, transforming your relationship with money might be one of the more important things you do in building your financial future. It’s one thing to be able to make money, but it’s another thing entirely to transform your relationship with money so you can grow it. 

We've already covered eight financial archetypes to describe people’s different relationships with money. While they provide some pretty broad brushstrokes as to how people might save and spend, they are helpful to determine what your tendencies are (or, at the very least, what they’re not) and how they might need to change. It also helps people to know what archetypes complement their own.


What Is a Bad Relationship with Money?

This is a complicated question, but one of the biggest red flags comes when you’re not addressing what you should be addressing—whether you’re someone struggling to make ends meet or you’re someone who has plenty of money but isn’t being as attentive about investments as you should be. 

As a Huffington Post article pointed out:

“Avoidance is a coping behavior that mental health specialists have identified as being used in a number of situations, and if you find yourself leaning into avoidance to deal with your money habits—like ignoring your debt or not checking your bank balance—you are exhibiting unhealthy behavior when it comes to money.” 

The same article points out that “limiting” beliefs about money—such as the maxim “money is the root of all evil”— can affect your relationship with money adversely. 

The financial archetypes get at some of the emotions that can bridge to money behaviors, such as the Guardian’s worry or the Saver’s belief in money providing security leading to more saving and less spending. If your beliefs prevent you from taking certain steps in your financial plan that would be best for you, then you should be concerned about those and work to change them. 

Factors That Impact Your Relationship with Money

relationship with money

Stress is a big factor, obviously. Whether you resort to “retail therapy” to alleviate stress or you invest in therapy or other healthy ways to cope, managing stress will be an additional expense. But it will also be something that will allow you to continue to earn money. If the stress consumes you and affects how much you can earn, that can be more harmful than not dealing with it. 

For couples, it can obviously affect things if you aren’t communicating and if one is spending more than an agreed-upon budget. A Psychology Today article from December 2022, titled “The Psychological Impact of Money on Relationships,” talks about the concept of “financial fidelity.” If one person in a relationship is spending from a source that the other doesn’t know about, such as a secretly-opened bank account, that’s considered financial infidelity. 

That article notes:

“Couples practicing financial fidelity can cultivate a sense of trust and understanding. Keeping money matters separate is often seen as a solution, but it too comes with issues of transparency and equity. Cultivating financial fidelity helps to level the playing field in financial choices and can help reduce stress and tension related to money.” 

More information here:

What to Do If You’re Not on the Same Financial Page as Your Spouse

Actual Money Fights We’ve Had (and How We Solved Them)


Steps to Improve Your Relationship with Money 

The first step is better understanding your relationship with money. Assess what you have, what you owe, and what your financial goals are. Knowledge is power, and by knowing where your entire financial picture stands and where you want to go, you can begin making strides toward those goals. 

Among the suggestions in a CNN Money article from 2018: Set what they call “a weekly 20-minute money date.” Depending on the assets you have, 20 minutes might not be quite enough to cover it every week, but the idea is to have a set time each week to focus on finances uninterrupted, assess what you need to attend to, and attend to what’s most important without letting it linger—and possibly become more of an issue. 


Creating a Financial Plan

Certainly, if you’re reading this site, you’ve put some thought toward a financial plan if you don’t already have one in place. But financial planning is more than just tucking away money in a retirement account. It’s working toward short-term and long-term goals, thinking about what you’re saving, what you’re investing, what needs to be more liquid, and what can be stashed as more of a long-term investment you count on maturing further down the road. 

More information here:

With Our Expanding Family, We’ve Had to Break Our Financial Plan – Twice


Maximize Happiness Through Intentional Spending 

That doesn’t mean that you shouldn’t spend at all, but think about how you’re spending specifically. The idea of “intentional spending” is to purposefully and thoughtfully spend on what makes you (and your partner) happiest

A NASDAQ article on the concept notes, “It’s the opposite of spending impulsively or taking a passive role in money management.” A financial expert quoted in the article goes on to remark, “Being intentional about your spending requires you to think if you really need to buy an item or whether it aligns with your values or long-term goals.” 

It also, should, of course, factor in your financial archetype—a big part of that equation is knowing what really does make you happy, based on those core values. In the end, remember that money is a tool toward whatever goals you set for yourself, and a lot of your success in meeting those goals depends on how you use that tool. 

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