Talking about money can be uncomfortable.
If you’re like me, you might be confused or just feel like a total idiot when you start doing research on managing your finances, and end up feeling overwhelmed – or even embarrassed – that you don’t know all these fancy terms being used and can’t relate to what they’re talking about.
Or maybe you feel like you should have more money knowledge by now. Or just more money, period.
Most of us leave home, graduate from college, go to grad school or start our first jobs while making financial decisions with the people around us, whether it’s family, a significant other, friends, or roommates. We transition into adulthood without really thinking about the history of our financial decisions and continue to be influenced by our past experiences and by others. If we want to start making moves, we need to not only be mindful about not repeating any previous money mistakes, but also have a better sense of what your money mission is. What do you want to splurge on and what do you want to save for? Once we’ve taken stock of our finances, know what our money goals are, and can honestly and comfortably talk about money, we can finally start making positive financial changes.
Talking about money is especially important during unprecedented financial circumstances like the COVID-19 pandemic. With so many people unemployed, taking pay cuts, uncertain about their future job security, or needing to work under dangerous conditions just so they can pay the bills, while the stock market jumps up and down with little correlation to what actually seems to be happening…we need to be open when talking about money, and we should all share our knowledge in order to support each other.
While I dive more specifically into money management in other episodes and posts, I want to first make sure we’re all comfortable discussing this taboo topic!
There can be a lot of shame, guilt, and anger associated with money, and it’s so important to know that you’re not alone.
Whether we like it or not, money is a huge part of our lives. Not just in a material, I-need-money-to-eat-and-pay-rent kind of way, but in a deeply personal way as well. A survey by the American Psychological Association found money and work to be the most common cause of stress for Americans. Other studies have found that more than half of Americans feel anxious about their money on a regular basis, and over a quarter said that financial anxiety makes them feel depressed at least monthly. In fact, almost 90% of Americans agree that nothing makes them happier or more confident than feeling like their finances are in order – and this was all before the pandemic!
In addition, money isn’t just affecting ourselves, but it can also impact your personal relationships – 1 in 5 Americans said they have financial disagreements with their significant others at least once a month, and the stress caused by conflicting money styles are one of the top reasons for divorce.
I have definitely felt frustrated and embarrassed about my own money situation. There is something about the anxiety from money that makes me feel so defeated or like I’m drowning. I feel like I’m at that age where I should be saving up for fun trips with my friends, for a new business, for a family, or even thinking about retirement instead of struggling with debt. And the thing is, this is actually really common for Millennials.
You probably won’t be surprised to hear that studies show many Millennials are finding it difficult to juggle their financial priorities with their substantial debt. In fact, about three quarters of millennials who carry debt say they can’t achieve their financial or personal goals because of it – whether that’s buying a home, getting married, saving for the future, or even switching to a more fulfilling career. Moreover, those same three quarters also don’t feel optimistic about their financial future. Almost 70% compare themselves to their peers financially, and more than half say they feel behind in their overall financial situation.
90% of Americans agree that nothing makes them happier or more confident than having their finances in order, but over half feel anxious about money on a regular basis. In fact, money and work are the most common cause of stress for Americans, and it's even one of the top reasons for divorce!
Ladies:
46% of us don’t feel ready for retirement and don’t feel confident in our money management skills. I also want to point out that women tend to have more debt than men for a variety of reasons including the pay gap, the fact that women tend to take out larger student loans than men, and don’t invest their money as effectively as men do – which could be because financial advisors are often old, white men who aren’t thinking about the fact that women not only get paid less but live longer, and should be investing their money differently. Something for us to think about…
Money is tough to talk about! We want to look good in front of people. We don’t want to admit that our financial situation isn’t great, or that we feel totally lost when the rest of society and Instagram is telling us that we should have accomplished xy and z personally and financially by a certain age.
My point is, if you feel lost or emotional or anxious about finances, you are not alone! The first step towards becoming in charge of your finances is to change how we approach money, think about money, and handle money. It’s normal to say you don’t know everything about money. It’s okay to even admit that you don’t know anything about money. Everyone feels anxious about money, and you don’t have to beat yourself up for buying iced coffee every morning. What’s not okay is treating your debit card like a gift card or closing your eyes and hoping it magically figures itself out. The only way to get rid of these uncomfortable feelings around money is to take positive action.
So. Here’s my goal for all of us. Let’s sit down, grab some snacks (maybe a glass of wine), log in and open up our bank accounts, look at our credit card and other statements and see where we’re at. What are your regular expenses, how much debt do you have, and how much do you have saved – if any?
Then, we’ll talk about what you can do with your money, how we can set up systems to get control of our finances, and start making money moves!