Today is Rosh Hashanah. I read up about it this morning and learned that, in ancient times, the Hebrew New Year was connected to the beginning of the economic year in agricultural societies. It is a time for introspection, a time to look back on one’s mistakes during the last year and plan changes for a better future. What a great day to talk about recognizing your financial mistakes and figuring out how to avoid making them again!
The current wisdom in the financial world is that having more money does not solve financial problems. As counter-intuitive as that may seem, the real issue with money problems is usually a person’s relationship with money. However you manage what money you have now is how you will manage whatever amount of money you have – only the scale will change.
Many people make mistakes because they haven’t had formal training in money management, but even financial education won’t solve most people’s money problems. Your attitude about money is interwoven into your financial decisions. You may fight about money or avoid talking about it with your spouse because you have different attitudes about how to spend and save your income. Emotions may run high when discussing finances because how you spend or save money reflects who you are, and doing it differently just feels wrong.
During this ritual time of looking back in order to move forward, give some thought to your relationship with money. Do you avoid dealing with it as much as possible? Do you use it to present yourself to the world? Are you obsessed with accumulating it? Do you manipulate or control others with it? What emotions do you associate with money – satisfaction, elation, anxiety, fear? If a financial planner directed you to manage your money in an entirely different way than you do now, would you do it? Could you do it?