Student debt, credit card debt, investing, retirement planning, general financial stability, and tax prep. We all have areas of our financial life that are going better than others, as well as areas that could be improved. Families across America are trying to improve their relationships with money. They find new ways to increase income and reduce debt. Did you know that 43.2 million American student borrowers are in debt by an average of $39,351 each, and the outstanding federal loan portfolio is over $1.59 trillion? Additionally, in quarter three of 2021, total household debt climbed to over $15 trillion, driven by new extensions of credit. Credit card balances also increased by $17 billion in the third quarter of 2021.
Your life’s financial status doesn’t need to be read, It’s Complicated. Healing of all relationships (even with your finances) is possible. Here are some ways you can improve your relationship with money in 2022:
#1: Get re-acquainted with your debt details.
Most of us could afford to glance at our debt balances and interest rates from time to time. Here’s a kind of borrower we rarely think about: The person with a ton of debt who still has great credit because it’s all on autopay (and they’re paying the minimums at least). While he or she may owe a lot of overall money and have a high debt-to-income ratio, the person doesn’t really “think about” their debt because they tell themselves it’s all being paid off at the highest rate possible.
Sound familiar? It’s probably time to revisit those numbers. It could be useful to make a spreadsheet with each debt, the total amount owed, and the current interest rate you’re being charged—to (at the very least) see if you’re really being as responsible as you tell yourself you are, and (at most) find phantom sources of unnecessary interest.
#2: Look at the relationship between finances and diet.
Food is an area where we sometimes tell ourselves we have no choice but to spend. Someone I know helped me reconsider the relationship between my stomach and my spending habits when he got out of debt and simultaneously lost sixty pounds in 2021 by doing these two things: 1) quitting alcohol, and 2) subsiding on hummus and pita bread whenever he wasn’t eating out. Other than this, he followed no special diet and never went to the gym.
Do you have any dining- or food-related habits that could use some reconsideration? Perhaps you shop at the grocery store without a plan, or throw away lots of unused leftovers and expired food? Could you simplify your diet for a period of time to be BOTH healthier and more cost-effective? (Hopefully, you’re saying, “Challenge accepted.”) Have you ever actually evaluated the cost of a meal delivery service vs. groceries? Are you actually making the best choice for both your body and wallet or is there an opportunity to improve both with some simple lifestyle changes?
#3: Make a point to be aware of and experience simple life pleasures.
If you really think about it, many of the best things in life are completely free. Perhaps it’s dancing in your home office wearing headphones, playing with your kids, reading on the couch with a loved one, or having a conversation with an old friend. Maybe it’s the feeling of cold wind blowing through your hair. Start by making a list of thirty free activities that make you happy. Aim to do one every day. Then, try to use the list as a go-to for new activity ideas when you are tempted to spend money. The list will help you remember the free things in life you’re grateful for, and gratitude builds happiness.
#4: Retrain your brain.
What you ultimately want to do is divorce the act of spending money from the feeling of happiness (if they are in fact connected) because it’s a misguided association in the first place. As researchers’ work with a man named Eugene Pauly (suffering from severe memory loss after illness) shows, “habits rooted in the basal ganglia [portion of the brain] are so strong, they can survive severe brain damage.” That means that the job is going to be harder than it looks! Try to retrain your brain to feel guilt when you convert something fungible (your money) into something that quickly loses its value (food/beverage, a possession). In a “perfect” world you’d get joy out of making investments and perhaps feel a little disheartened when spending money on non-essentials. When you receive your paycheck, try to train your brain to think, “Great; now I have a cushion,” instead of “Great; now I can buy something new.”
#5: Put every potential purchase through a mental litmus test.
How much of your spending doesn’t really go to anything meaningful? I recently heard of two parents limiting their kids’ Christmas gifts to the four categories “Want–Need–Wear–Read,” in which their kids got to choose one type of gift from each category and avoid encouraging limitless consumption around the holidays. I thought this could be applied to personal finance as well! Decide what categories you want your expenses to fall into. Then decide how many instances of each purchase you will aim to hit each month. (Besides, aren’t you also trying to read more?) It’s also a great practice to consider the whys behind purchase decisions.
#6: Use COVID precautions and “Dry January” as opportunities to save money.
With COVID numbers on the rise and many people going alcohol-free in January, we all have good excuses to stay in and save money, so take advantage! Use the heightened safety recommendations to stay in, catch up on a new TV show, read a book, or follow up on house projects. Are there any hobbies you have on the back burner that you could pick back up without making purchases? Do you like taking long baths, naps, strolls around the neighborhood with your dog? Instead of going out with friends, you could host a meetup on Zoom or Google Meet. We all have a choice as to how we handle our uncertain futures, and the choice is to feel victimized by the restrictions or to thrive in spite of them. Look for opportunities to thrive.
#7: Try “manifesting” instead of making financial New Years’ resolutions.
Manifesting is defined as to make evident or certain by showing or displaying vs. a resolution that is defined as the act of resolving, answering, or determining. Wouldn’t you like your money to be evident or certain, vs. “resolved/determined?” The idea of manifesting hit its popularity in the late 2010s with the book The Secret, which helped readers engage in the practice of thinking aspirational thoughts with the purpose of making them real. At a time when all any average citizen can ultimately do is hope for a better future than the one we’re currently living in, it’s no wonder the practice of manifesting has become so popular.
At Familius, we understand how essential it is to learn and heal as a family. We have tons of articles to help you find different ways to strengthen the bonds in your family. Read through our blog for the latest tips on healthier family ties.
Stephanie Bousley (1982 – ) graduated from New York University’s prestigious Tisch School of the Arts with an MFA in Film Production. While there, she received the Faculty Commendation Award for Film Producing three years in a row and has won several awards for screenplay writing, including the Grand Prize in Script Pipeline’s First Look Contest (Teleplay category) in 2015. She holds bachelor’s degrees in International Business and Psychology from the University of San Francisco, where she graduated magna cum laude.
Finishing grad school at the height of the 2009 recession and trying (in vain) to convert unpaid film internships to jobs, she found herself in over $200K of student debt. A series of random events propelled her out of the U.S. to Singapore, where she spent nine years. She is now based in Boston, MA.
Buy The Avocado Toast is her first book publication.