Broker Check

You're Not Bad With Money

January 18, 2022
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We've all heard people say they’re bad with money, and that statement typically doesn’t carry significant meaning. I think these individuals are typically trying to say they haven’t been able to save much, or they have overspent, or some combination of the two. The statement should likely be rephrased to “I haven’t valued my budget.”

If you really think of it, money is just an idea. I know there are tactile symbols of currency with coins and dollars, but the entire concept of organized currency is just an idea. If you look at your bank statement, there’s a number that’s given a certain meaning and value, but money – in and of itself – is just an idea that everyone has adopted and accepted.

Anyone who thinks they’re “bad with money,” or has a poor track record with overspending and under-saving are likely experiencing symptoms of something other than mismanaging their money. There’s an experience or memory or maybe a lack of envisioning the future that could be the root cause. I’m no physician or therapist, but money issues are likely a result of not dealing with emotions in the past.

To clarify, I’m talking about true mismanagement of money. Everyone has had many poor money experiences whether it was a bad investment, a bad purchase, unknown “blind spot” in situations, or just a tough break at times in life. Someone who has a track record of being “bad with money” is consistently overspending on things they don’t need, failing to put money in savings, or refusing to learn how to put themselves in a better place financially; all this is quite possibly just a symptom of a deeper issue that might be unresolved.

If you’ve ever been one who had a few bad ongoing money-habits, consider what the root cause might be. A little bit of self-reflection might be necessary, and it could be difficult to recall, or for some, the root cause might be front-and-center. It could be that someone had bad experience with money in their childhood, or maybe a person is using frivolous spending to bandage a raw relationship or difficult experience. I know some people who didn’t feel confident in managing money because they weren’t given the responsibility to manage their own money during certain periods of time in their lives. Every situation is deeply personal, but we’re all human, so if we don’t digest emotions we experience through exciting or traumatic times in our lives, the unprocessed emotions and feelings can manifest in other parts of our lives, including our ability to manage our finances.

Not all bad money experiences lead to financial ruin. For those who grew up in an impoverished situation, they might try to compensate for not having enough. The generation who survived the Great Depression is a great example of this. Much of this generation became extremely frugal, even when they no longer needed to be frugal; however, I have seen damage to relationships when people are too frugal or save too much.

When there is no balance in your finances, everything involving money can be negatively affected. Imbalance in your finances typically removes your ability to be free to experience the world with your loved ones because there’s a financial imperfection nagging at you, whether it’s because you’re trying to save too much, you’re spending too much, or you can’t quite seem to organize a broken relationship appropriately and it manifests into financial negativity. Lack of balance can also create a sense that there’s no capacity to deal with money or learn about how to navigate a budget, spending, saving, etc., especially when life gets so busy and complicated.

If you’ve ever heard someone say they’re “bad with money,” make sure to empathize with them. Money can be a complex idea, and managing the inflows and outflows can be easy for some while proving difficult for others. The reality is that virtually no one is truly bad with money, and instead there’s likely an aspect of life that’s out of balance.