We can't often change how much comes into our accounts every month, but we can, at least, change how we react to our ﬁnances.
Spill are usually found working with progressive companies to offer therapy to their employees through Slack. They took some time out to ask their therapists what their top tips around ﬁnancial wellbeing were for you.
This is what they said.
Know your history We know that a lot of what we do now, we learnt from our role models in our formative years. So take a moment to ask yourself how people in your life dealt with their ﬁnances. What do you think you might have unconsciously learned from them? Understanding this will help you spot what bits of your ﬁnancial habits replicate mum and dad, and what are are the ﬁnancial habits you're trying to build yourself.
Know your needs Does money represent safety for you? Or status and recognition? Is making money a form of self-expression in that it’s a byproduct of you being the best version of yourself? Or is money merely a means to an end? When you ask yourself what money means to you, and how it provides for your primary needs, it helps bring clarity to how much you're willing to sacriﬁce to get it.
Know your values What we choose to spend our money on says a lot about who we are; in some sense, we vote with our supermarket trolley and our values are shown in every purchase. Whether it’s organic kombucha or the supermarket’s own brand of basic carrots, sometimes our spending can offer clues into our unconscious values. For example, say we say we value books, but spend all our money on Netﬂix. Being aware of the difference between what we say and what we do can help us harmonise within ourselves and become more congruent. After all, nothing wrong with Netﬂix. And owning our values explicitly helps us not feel guilty when that Netﬂix subscription goes out every month.
Know your anxieties David Foster Wallace famously said that capitalism stirs in us anxieties relievable by purchase. Retail therapy is the default option. But it's not the only one. Knowing our anxieties helps to notice which ones might be addressed with alternative - and cheaper - solutions.
Know your cues Our daily actions are mostly unconscious habits. Over 90% of what we do each day, we do without thinking. By understanding what our spending cues are - e.g. walking past our favourite coffee shop, browsing the ASOS website when we have an idle minute - we can catch ourselves before the cue triggers the behaviour. A small change, like taking a route to work that avoids that coffee shop, might just save us hundreds of pounds a year.
Know your aspirations Do you want respect but buy a powerful and expensive car? Do you crave safety but buy a large house with more bedrooms than you can comfortably afford? We often buy one thing when in fact we crave another. Why go by proxy? Know your aspirations and try to satisfy them directly.
Know your facts We often think that the next big purchase will make our lives so much better. But that's not what the facts say. A 2010 study by Nobel prize winner Daniel Kahneman and Angus Deaton of Princeton University - one of many such studies - shows that the relationship between money and happiness isn't linear: it's logarithmic. That means that more money brings more happiness, but only up to a certain point. Thereafter, the amount of happiness gained by each additional pound earned diminishes drastically and begins to approach zero. Once you've reached a certain level of income, your happiness will be better served by non-monetary pursuits: more meaningful work, for instance, or a better philosophy of life.
Know your rights Did you know that you can ask that you are excluded from having an overdraft if you know that you have a gambling addiction, suffer from bipolar disorder or struggle with any other kind of mental health problem which could affect your ﬁnances? By law, ﬁnancial institutions in the UK have a duty of care. That means there are policies in place that can protect you. So make use of them.
Know your skills When we don't think we're good at something, we tend to do it less. And ﬁnancial planning is a skill like any other - in order to get better at it, you need to practice. To get you started, you could pair managing your ﬁnances with something you know you're good at. If you're an extrovert, then make it a social thing, and involve your friends. Or if you love making things, then get out the hammer and saw and put your skills to use by making a moneybox. It's OK to start small, too, such as simply spending 15 mins reading a blog post on managing your personal ﬁnances.
Know what you can and can't control The mind often focuses on things outside of our control. Getting a promotion, worrying about the economy or thinking about how our investments are doing. Dwelling on these things just gives more oxygen to the feeling of being out of control, which itself fuels anxiety symptoms.
If we bring our attention down to the micro level, it's possible to see there's a lot we can control. What we do when we see our friends, how many nights a week we eat out or even how often we check our bank account. The closer you look, the more you see the things we have decision-making power over. And the more we focus closely on these small things we can control, the better we can defend ourselves against those things we can't control. Good micro habits compound over time.