What Does Money Mean To You?

Coming to the realization of what money means to you will free you to achieve your financial goals in a way that works for you.

 (This post was updated from its original publication date of November 9, 2017.)

Greetings, Talking About Money community. I hope this post finds you well.

Today I want to discuss one of your most intimate relationships, the one you have with money. Wait, don’t click away just yet!

I believe that everyone has an inherent individual relationship with money, a way that you relate to money as you move through the world. Sometimes my coaching clients or participants in my workshops will lament that their relationship with money is "wrong" or "bad." Do you ever feel that way?

Brad Klontz and Ted Klontz's "Mind Over Money: Overcoming the Money Disorders That Threaten Our Financial Health" presents research on "money scripts" - unconscious beliefs about money that drive our financial behaviors. Their work shows that recognizing and addressing these scripts can lead to more integrated and healthier financial decision-making, regardless of which money personality type predominates in a person.

I contend that everyone can have a more positive relationship with money. You got to this point in your life through a combination of internal attributes and external life experiences (in other words, nature AND nurture) but that doesn’t mean that it must stay that way. With self-awareness (and maybe giving yourself some grace) combined with a few practical tips, you can begin to transform this important lifelong relationship.

Your relationship with money is deeply personal and likely began forming in childhood. The messages you received from your close family members, the experiences you had with finances growing up, and even cultural influences all shaped how you view and interact with money now that you are an adult. Understanding your own money relationship is the first crucial step toward financial well-being.

So, what does money mean to you?

Money means security

You may acknowledge that to you, having money means security. You are motivated by your bank balances and like to watch your savings grow over time, maybe even logging into your accounts daily to monitor what you have. You hate making large purchases and may experience a panicky feeling if you see your bank balance suddenly plummet. While you may experience the thrill of success as you watch your savings grow, the challenge for security-minded folks is enjoying the present day.

In their 2021 book "Psychology of Money," Morgan Housel explores how our personal experiences shape our relationship with money. Housel discusses the concept of "reasonable" versus "rational" financial decisions, noting that security-minded individuals often make choices that appear irrational to others but are reasonable given their personal history with financial uncertainty.

Further, security-focused individuals often excel at saving but struggle with spending, even when it's appropriate or necessary. This mindset can lead to missed opportunities for growth or experiences that might bring joy. The constant worry about having "enough" may stem from early experiences with financial instability or lessons learned during economic downturns.

If this sounds like you, give yourself a "fun" category in your monthly budget (in an amount that is comfortable to you, of course!) as well as adding other "fun" goals to your long-range financial plan, such as attending a high-price concert or taking a week-long trip. This way you can have the best of both worlds, security and fun! Consider setting specific thresholds for your emergency fund balance and your monthly retirement contribution that, once met, give you permission to spend more freely on experiences and items that bring you joy.

Money means enjoyment

If this money personality fits you, you relate to the idea that money's purpose is to make your life easier and more enjoyable. Having money makes you feel powerful, and if you have worked hard to earn it then why not spend it? You can always make more tomorrow. You might be spontaneous with purchases and enjoy treating yourself and others. Shopping may give you a genuine emotional boost, and you find deep satisfaction in using money to create memorable experiences.

A 2017 study published in The Journal of Positive Psychology titled "Buying time promotes happiness" by Ashley Whillans and colleagues found that using money to buy time (like paying for services that free up your schedule) creates more satisfaction than material purchases. This research validates the enjoyment approach when directed toward life-enhancing experiences rather than accumulating possessions.

The challenge for enjoyment-focused individuals is balancing present pleasure with future needs. Without guardrails, this relationship with money can lead to living paycheck-to-paycheck despite a good income. While your "in the moment" spending creates joy for you and others, it might also generate anxiety about the future when you quiet your mind at night.

If you relate to this sentiment, keep yourself in check by automating your saving and investing in long-term financial goals. Set up automatic transfers that happen immediately after you get paid, before you have a chance to spend that money. Your "live in the moment" relationship with money can be fun for you and those around you, but it has a tendency of depleting your bank account and may eventually force you to acquire high-cost debt or delay long-term financial goals like buying a home. Consider working with a financial counselor or financial coach who can help you establish a sustainable balance between enjoying today and preparing for tomorrow.

Money means stress

If you identify with this, you do not like to spend your time thinking about money and thereby avoid it. You get by with the bare minimum "mental accounting" to know the approximate cost of a tank of gas or a cart of groceries and you avoid doing a deeper dive into your finances. Maybe this is because you fear finding bad news and believe that you do not have the skills to fix your money problems. Perhaps previous financial setbacks have created a sense of learned helplessness around money management.

The 2021 FINRA Foundation National Financial Capability Study found that individuals with high financial anxiety were more likely to avoid checking their accounts and engaging with financial matters. The study, which surveyed over 27,000 American adults, established clear connections between financial avoidance behaviors and increased stress levels, creating a self-reinforcing cycle of financial avoidance and anxiety.

As FINRA found, money avoidance creates a vicious cycle - the less you engage with your finances, the more overwhelming they become, which reinforces your desire to avoid them. You might find yourself consistently surprised by account balances or bill amounts, leading to reactive rather than proactive financial decisions.

Avoiding money can lead to late payments that cost you fines and interest, missed opportunities to increase your income, and chronic financial anxiety that affects other areas of your life. If you are an avoider you need to take baby steps into the financial waters, no diving into the deep end for you! Try simple acts like opening your bills and putting them in the same folder every month and tracking your spending with basic tools like a notebook or a calendar. Consider using a simplified app that gives you a financial overview without overwhelming detail or setting a 15-minute "money date" with yourself once a week to gradually build comfort with your finances.

Money means “the root of all evil”

If you relate to this phrase, you may have had life experiences that taught you that money is bad, and that people who amass large fortunes most likely did something unethical to achieve that goal. You may have internalized this feeling and therefore try not to have a relationship with money at all. If you are on the receiving end of a large sum of money (maybe through a gift or a tax refund) you let it seep out of your hands as soon as possible.

This money relationship often stems from cultural, religious, or family messages that vilify wealth or view poverty as somehow more virtuous. You might feel guilt when your income increases or when you indulge in "luxuries" that others can't afford. This mindset can manifest as self-sabotage of career opportunities, unconscious overspending to return to a more "comfortable" financial state, or resistance to financial planning that might increase your wealth.

Lynne Twist's book "The Soul of Money" addresses the complex relationship between morality and money. Twist challenges the notion that money is inherently corrupting and instead proposes a perspective of "sufficiency" - recognizing that we can redirect our relationship with money toward purposeful ends aligned with our deepest values.

The challenge with this money relationship is recognizing that money itself is neutral - it's a tool that can be used for tremendous good or harm depending on the holder's values and choices. If you identify with this feeling, try to think about the big picture goals of your life that affect those around you -- do you want to own a space that your family can call home? Do you want to avoid being a burden on your adult children when you are old? Creating financial goals beyond yourself that relate to your family or community and then automating your finances can help keep you on track. Consider exploring the concept of "enough" - defining what financial sufficiency means for you rather than rejecting abundance entirely.

Finding Your Money Balance

Did you relate to one of the four meanings of money? More than one? You might discover that you have more than one relationship with money and that's okay. Most of us contain multitudes when it comes to our financial selves - perhaps you're security-focused with retirement but enjoyment-oriented with discretionary income. Understanding these sometimes-contradictory aspects of your money relationship can help you design financial systems that honor your whole self.

Accept your relationship with money (and for transparency's sake, money tends to mean security to me), apply the tips and begin to enjoy a more peaceful relationship with money. Remember that awareness is the first step toward positive change. By acknowledging your natural tendencies and giving yourself grace, you can work with them rather than against them, creating financial habits that satisfy both your emotional needs and practical goals.

The most balanced approach combines elements from each meaning of money: the foresight of security, the joy of experience, the action-orientation that overcomes avoidance, and the ethical consideration of money's purpose in our lives. Start with small steps that honor your natural tendencies while gently expanding your money comfort zone.

What do you think?

What does your relationship with money look like?

In what ways does it support your financial health?

In what other ways would you like it to change?

Share your thoughts with this insightful and supportive (and did I mention kind and good-looking?) community, either in the Comments below or on LinkedIn.  Thanks, stay safe, and be well.