Therapist: How to fix your money issues
Key context
Vicky Reynal is a financial psychotherapist.
People can have what she describes as financial anorexia, which is basically a need to control through money.
This is because she’s seen people switch from being controlling with food to controlling with money.
Take calorie counting. This has parallels with checking stock prices a hundred times a day (take note Damo).
This kind of behaviour can be incredibly restricting. She once had a client who had millions in the bank but wouldn’t buy a coat.
The way we handle money and food can represent internal views of ourselves. So someone might over eat to fill an emotional hole, and the same can be true with money - either spending hugely on others or hoarding it anxiously - to fill an emotional hole.
She’s seen the absolute extreme of generosity, where people give so much away that they are left with nothing.
People who have problems spending don’t typically seek out help, partly because they don’t like spending. Plus, being frugal is often praised, but if taken to an extreme, it can be destructive and stifling.
Nearly all of us feel we should be better with money and we’re often too ashamed to ask.
Studies show wealthier people generally feel happier about their lives overall but not on a day-to-day basis.
Relationships and money
When someone who is reckless with money gets into a relationship with someone who’s responsible, they often go further toward their natural tendencies - i.e. that person will become even more reckless (and their partner even more responsible).
Some people like to look after someone else, whilst others like to be looked after.
Couples often argue about money rather than talk about it.
There are normally trade offs to each approach to money which aren’t recognised, e.g. extreme spenders don’t save, but extreme savers don’t enjoy life (and often don't invest because they're scared of losing it so they miss out on growth and can even have their wealth eaten by inflation).
In relationships we often point to the downside of a partner’s behaviour without recognising there is a downside to our own.
Try to find a way with your partner where your different approaches are seen as complementary rather than incompatible.
T loves being reckless - he is "terrible" with money - and you can quote me on that because that's a quote from his partner. Find out what T spends his money on when he and Damo went through each other’s bank statements here.
How to improve your relationship with money?
Vicky says you’ve got to figure out what’s behind your behaviours with money.
For example, one of her clients would spend all his money just to speak to his father because he only spoke with his father when he needed to ask him for money.
Your relationship with money doesn’t get fixed by having more money. It fixes the money problem but not the relationship problem.
Take Damo. He’s still refreshing his spreadsheet and investment apps all the time, even though he knows that objectively speaking he’s doing ok.
Vicky thinks the goal is not to feel emotionless with money, but rather to understand your emotions. Label your emotions when you interact with money.
Try to spot patterns in your financial life, e.g. are you always the one buying the extra round? Is it just with certain friends?
Then consider what you’d feel if you didn’t do that thing - or what you actually feel by not doing it. What feelings come up? Do you feel out of place? Guilty? Lonely? Inadequate?
Besides exploring the root causes and emotions behind someone's behaviours, if you teach them about money, they generally start to feel less anxious about it. You may even recognise that in your own personal finance journey. I certainly felt better about personal finance once I started to understand it, even if my circumstances hadn’t really started to improve yet.
Always ask yourself why. Why are you making the choices that you are? What are you hoping you will get from money?
Quick note on parenting and money. Vicky suggests explaining your financial decisions out loud to your kids, like you bought X thing which was expensive so you’ll need to spend less on Y item.
Try to get them used to spending and managing money by giving them pocket money. It’s critical though that you teach them the limits around money - make sure they know it's finite - even if you want to spoil them and have the means to do so.
FinDom
We had to have a section just for FinDom, or Financial Domination.
This refers to people who generally go online and find someone to dominate them financially. They give financial control to another person (the dominatrix, or Dom) - and they, the Submissive (Sub) obeys.
For instance, the Sub might get sent to the ATM to take out some money. Or the Dom might ask them to buy an expensive bit of clothing. The Dom asks and the Sub gives.
People can lose fortunes like this.
Subs do it because they get some kind of psychological release when they feel powerless in this way.
Sadly, they are often victims of abuse, which was an instance (or instances) when they were powerless. In the case of FinDom, they are synthesising that powerlessness but they can get it to stop... if they want.
