Knowing You’re Broke is Better than Ignoring Reality

We can’t go through life pretending that money and bills don’t exist, yet there are those of us who let anxiety and avoidance rule our finances.

Instead of choosing to avoid the reality of our income/debt/money situation, we should take responsibility for the state of our accounts and consider our long-term financial goals.

Being broke and actively working towards a more stable future is so much more beneficial than actively sidestepping the truth.

Financial Anxiety Only Grows with Time

Have you ever met one of those people who spend every penny they have every month? Are you one of those people?

You might think, well that avoiding a tight budget just like refusing to weigh yourself and that’s okay because focusing on the dollars and cents, just like calorie counting, can leave you feeling completely overwhelmed.

It’s true that we should not put an unhealthy focus on our finances. But being aware of how we’re doing, just like keeping track of our health, keeps us from making bad decisions.

Continually living in the “let’s hope there’s enough in the checking account” mindset only increases the anxiety over time. The longer we go between checking in, the scarier it will seem to get back on track.

We can’t control everything that happens in life, but as with disease or injury, ignoring it or masking the symptoms only increases the negative consequences down the road.

We have to face the facts, and the earlier we do it, the better.

Why It’s Better to Be Broke and Know It

If we take a look at our bank account and see that the cash levels are low, it can cause us to feel overwhelmed and trapped. In those situations, it’s natural to want to run away from the experience and continue living without the weight of knowing that things aren’t in a stable place.

I mean, we can get by without planning for the future. We always have, right?

It’s important to ask ourselves — were we really getting by just fine? Are we really getting by when we aren’t using our income to give ourselves some slack? If we are just a car repair away from disaster?

What would happen if we had a health crisis in the family? How would we handle a loss in income?

The truth is, we can’t set ourselves up for success or plan for emergencies if we don’t check in often enough to know where our money is going.

An unhealthy attitude about finances, whether or not we want to admit it, affects our relationships, mental health, physical health, and life goals.

5 Steps to Break the Cycle of Anxiety Tied to the Bank Account

We all tell people who are experiencing anxiety that they just need to “get back on the horse” to break the cycle. We can break a financial anxiety cycle by doing the following five things:

1. Create a Realistic Budget

The key word here is realistic because anything unrealistic or too intense will set us up to fail. We have to take a look at our income, expenses, and debts. The minute we are able to assign a “job” to every dollar we have coming in, it allows us to breathe.

Your budget can really become a friend, as it tells you exactly where your bad spending habits are and serves as encouragement when you see yourself making progress.

2. Use Credit Cards Less Often

Something about handing cash over the counter really makes spending feel more “real”. Try giving yourself a break from the plastic and use cash to buy your everyday purchases like groceries and fuel.

Imagine how much money is sitting in your bank account. When you are taking some of those dollars out to spend on something you don’t need, you’ll feel it more than if you had put it onto a credit card.

3. Check Your Bank Account Once a Day

There aren’t very many people who should be checking their bank account on an hourly basis, so we shouldn’t become obsessed. However, as we settle down at the end of the night, it’s a good idea to get into the habit of checking our accounts and taking note of whether any money was moved that day.

Did you pay the bills? Did your student debt payment get pulled?

If you check every day, the fear of checking will slowly decrease.

Only so much can happen in one day – by knowing what’s going on, we don’t allow things to spiral out of control. If something comes up (like you were accidentally billed twice for internet), you know about it right away and can deal with it quickly.

4. Talk Through These Steps with a Trusted Friend

Admitting that we have a money managing problem is tough as it is. It can be even more challenging to go through the process of discussing your financial state with a trusted friend. However, going through your struggles and plan to make progress with someone who cares about you is a really wonderful way to give yourself some accountability.

It also just makes the load feel lighter when we have someone else “in” on what’s going on.

Sit down and buy a cup of coffee. Get out your budget and go through where you are trying to make progress. You don’t have to give them exact numbers if that makes it uncomfortable, but share the places where you need to cut back and how you plan to keep yourself on track.

They may even be willing to check in with you every so often to make sure things are going okay. Friends are a great help for support when you’re trying to fight something as tough as anxiety.

5. Set Official Dates to Check-In on Progress

Even if we have a friend who texts every so often to ask how things are going, it’s important that we sit down and have an honest conversation with ourselves (and our spouse if we have one!) about how we are doing.

We can go over the numbers, check for any places where we slipped up, and make necessary changes to the budget plan.

The longest we should go between these honest check-ins is three months, but if you are just getting started with a budget and making financial goals, it’s probably a good idea to do this on a monthly basis.

Start Having Better Money Talks Today

If you’re sick of having angry, defensive, or pointless money talks with your spouse, it’s time to make a change. Don’t let this be another year of avoiding your finances and making passive aggressive comments. Numbers don’t lie, so money issues are usually behavior or attitude issues.

People issues are improved with consistent, open, and honest communication.

Check out my other posts on finances and communicating with a spouse. My husband and I spend more than 65% of our income on paying off student loans. We make sure we’re on the same page. Get excited to be on the same page with your spouse: working towards your goals as a team.

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  1. Pingback: 4 Ways to Start Working Towards a Healthier Financial Lifestyle | Living a Cozy Life

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