Tips & Tricks

5 steps for transforming your relationship with money

January 16, 2024

Our relationship with our money is probably one of the longest relationships we’ll ever have in our lives, so it’s important that it’s a relationship we feel comfortable in. But how do we get to a place where that relationship is more positive and we feel more confident making financial decisions? The transformation takes time, especially if we have particular hang-ups to contend with - and don’t worry, most of us do, myself included. But here are 5 steps to get you started on improving how you view money and your relationship with it. 

Don’t shy away from the numbers

It can often feel easier to bury our heads in the sand than to face up to our spending. Figuring out how much debt we owe, or looking at our bank balances on a regular basis (I’ve been there!) but that can only hurt us in the long run. To make this less daunting and less pressured, build money habits such as checking your bank accounts into your routine, learn how to create a realistic budget that works for you, and start tracking your spending so you get an accurate picture of what a month of expenses looks like. 

If you’re currently tackling debt, Incredible brings all your debt together so you can see how much you owe and how long it’ll take to pay it off. It makes getting to know the numbers around your debt feel straightforward and easy. Plus, the app helps you to make informed decisions - you make a monthly payment to Incredible, and they’ll ensure it’s been allocated to your loans and credit cards in the most cost-effective way. 

Improve your financial knowledge

You don’t have to be an expert in personal finance to start taking your money more seriously, but building up on your knowledge will help you to improve your money mindset and relationship with it. With what feels like a dictionary of terminology to get our heads around, personal finance can seem intimidating to begin with but there are so many free resources available at our fingertips. We don’t need to know everything straight away either. Get to a level of knowledge you feel comfortable with to start making informed decisions on your situation now, such as choosing the right savings account or knowing how to budget your money in a way that works for you. As you continue to make decisions around your finances, you will start to feel more comfortable with it. And don’t be afraid to enlist the help of professionals either. A financial advisor or accountant worth their salt will be accessible, understanding and non-judgemental.

Understand your why

Changing the way you view money and building healthier habits won’t always be easy. But understanding why you want to improve your finances will help you to stay motivated in the long-term. If you’re unsure, think about where you want to be 5 or 10 years from now. From that, you can start setting financial goals to get there. Whatever your goal, break it down into manageable steps and make sure it’s SMART (specific, measurable, attainable, relevant and timely). 

Understand your priorities and values

One of the most significant game changers in my relationship with my finances was truly understanding what I wanted to do with my money and what I wanted to spend it on, rather than what everyone else was doing. As soon as I had that shift in mindset, I stopped caring about keeping up with the Joneses or feeling pressured to buy certain things that didn’t align with me because my peers were doing so. In turn, I felt I was getting more out of my money because I was spending it on things that gave me most value in terms of my current lifestyle needs and wants. When you let go of spending through peer pressure - and it is easier said than done sometimes - it feels empowering and it’s a reminder that you’re the one in control of your finances. 

Stay organised with your finances

I’m a big believer that one of the easiest ways to feel better about money - and therefore your relationship with it - is to have an organised money management system. Because when you feel organised about how you manage your money, you’re going to develop a more positive relationship with it. 

While this can refer to a physical management system for important paperwork, it’s also about knowing how much money you’ve put aside for different goals, and a place where you can keep track of your spending. I often liken this to a filing cabinet - imagine having a filing cabinet where documents are thrown in without any sense of order. You’ll feel overwhelmed trying to find what you need. Likewise with your finances - if your emergency fund, day-to-day spending money and savings for a bucket list holiday are all lumped together, it’s going to be harder to know how much money you have for each. That’s when you start to associate money with feelings of stress and overwhelm, resulting in negative connotations around finances. Instead, separate your spending money from your savings, and have somewhere to track how much money you’ve put aside for each of your savings goals and emergency fund. And find other ways to organise your money in a way that makes most sense to you. Things like Monzo’s Pots, Starlings’ Spaces and Revoluts’ Vaults are all great examples that are baked into everyday products you might use.

Taking these practical steps can help you to change your relationship with your finances for the better, and in turn feel more confident with the financial decisions you make.