Money plays a key role in our lives, but not everyone thinks about it in the same way. What affects our relationship to money? Why is it important to learn some money management skills, and how do they help us in the long run? Join us for a straightforward look at our relationship to money.
If someone says the word "money," what do you think of? Fun? Security? Freedom? Or do you lean more towards anxiety, uncertainty or powerlessness? The thing is, it can be all of that and more. Everyone has a different relationship with money. One person who makes $1 million a year can still feel like things are tight, while someone else who makes $50,000 a year can feel complete financial freedom. Why do some of us want to buy things that bring instant gratification as soon as we get some money, while others put their money into a savings account right away for something down the line? Whose fault is it if we don't feel like we have a healthy relationship to money?
There are many factors that influence our attitude towards money, which we start forming when we're kids. Your parents could have been frugal and focused on saving or had money to spare and spent freely. Regardless of whether your family was well off or struggled to make ends meet, the seed gets planted early on for how we relate to hard cash or borrowed money later in life, according to Janine Mossuz-Lavau, a French political scientist and sociologist. In a 2008 article, L'argent et nous : l’effet famille1, (Money and us: The family effect), she explains that children whose parents don't spend much—out of necessity—can be frustrated when they can't have the same game console or brand name clothes as their friends. There's a risk of compulsive buying in adulthood as they try to make up for a situation in the past. On the other hand, they can take on the same behaviours as their parents and commit to saving, because it makes perfect sense to them. A lot of it comes down to personality; children in the same family can end up with very different attitudes about their finances later in life, says MossuzLavau.
On top of all this, we're affected by the different life experiences we have with money, good or bad. Personal values play a role, too. So when you add it all up, it means we aren't always rational with our money and can attach negative feelings to our actions.
Ready for the good news? Don't worry, we can change our relationship with money!