6 Signs You Have an Unhealthy Relationship With Money

Do you and the Benjamins have a healthy relationship? Several certified financial planners, all members of the National Association of Personal Financial Advisors (NAPFA), weighed in on their personal finance red flags — and how women can get on better terms with their balance sheets.

Sign #1: You have a lot of shoes.

Remember that episode of “Sex and the City,” when the ambitious and successful Carrie Bradshaw realizes she’s spent $40,000 on shoes but doesn’t have a place to live? Ambari Prakash Pinto, JD, of Savant Capital Management in McLean, VA does: “Shoes are an easy red flag.” Keep an eye out for purchases of expensive items you don’t need.

Sign #2: You tell yourself (or others) that you don’t understand money, or that money isn’t important.

“People sometimes think that not knowing about their money is somehow better than knowing what’s going on and what needs to be done,” says Lauren Zangardi Haynes, CIMA, CFP, of Evolution Advisors in Midlothian, VA. But “What they may not realize is that financial ignorance is the exact opposite—not knowing what’s going on with your money increases your stress and anxiety.”

And “It’s not that money is the most important thing in the world, but we need money to take care of ourselves.” So, valuing your finances is helpful, and appropriate.

Sign #3: You don’t know (roughly) how much money you have in your checking and savings accounts, and what you owe on your loans and credit accounts.

This is another sign that “your relationship with money is on the ropes,” says Zangardi Haynes.

Sign #4: You aren’t aware that you have a relationship with money.

Guess what? “Everyone does,” notes Prakash Pinto. Your “money script”—your beliefs and attitudes about finances—can affect your bottom line. Certain money scripts (which include money avoidance, worship, status, and vigilance) are associated with behaviors such as compulsive buying, hoarding, workaholism, and gambling.

Sign #5: When you want to reward yourself or others, you think about buying something.

This is an unhealthy money habit, according to Joyce A. Streithorst, CFP, MSFS, CDFA, of Frisch Financial Group, Inc., in Melville, NY.

Sign #6: You are “juggling” multiple credit cards and have no idea when you will be able to pay them all off.

Another red flag, says Streithorst.

Whew. If any of these warning signs hit too close to home, here are some ways to take control:

1. Educate yourself.

“Ways to improve finance and literacy are readily available,” Prakash Pinto says. She recommends any of the following: “A financial literacy program offered in the community, personal finance 101 content from a bank or investment house, Morningstar articles on personal finance, and objective research. The Federal Reserve Bank of St. Louis has a great deal of research and materials on financial literacy and the basics everyone needs to know.” 

2. Set financial goals and [list] the steps—both large and small—to achieve them, says Streithorst.

Clarifying your goals can help make the process easier to understand—and achieve.

3. Use a budgeting app to track what’s coming in—and going out—every month.

You can get one from your financial advisor, or try an app like Mint or YNAB, advises Zangardi Haynes.

4. Automate your savings.

Zangardi Haynes notes that you can do this by participating in an employer retirement plan or setting up a monthly transfer of funds from your checking account to savings account, IRA, or Roth IRA.

5. Review (and understand) your annual social security report.

“Many people rely on social security as a source of future income, and it’s worthwhile to understand how the program works,” says Prakesh Pinto. “Although Social Security should not be the main deciding factor in your work choices, it is important to understand that the amount you receive will depend entirely on work history, either your own, your spouse’s, or, in certain cases, a parent’s.”    

Benefits are based on the worker’s average earnings during the 35 years during which the worker earned the most, adjusted to reflect current wages. Ask yourself, “What do you think of that projected benefit amount? How will it affect what you spend or save today?”

6. Consult a fee-only financial planner to help you get a full picture of your finances, identify what’s important to you, and help you create a roadmap for your money.

“True fee-only planners don’t take any commissions, and will sign a form committing themselves to acting as a fiduciary [in their client’s best interests] at all times,” Zangardi Haynes explains. She adds, “Your financial life is more than just your investments. A real financial planner will give you advice on everything from budgeting to investing, insurance, taxes, and estate planning.” 

Good work, ladies!

Feeling overwhelmed? Take heart: “In my experience, when the woman takes the lead in hiring a financial planner, there’s more collaboration,” notes Forrest Baumhover, CFP, EA, of Westchase Financial Planning in Tampa. “When there’s collaboration, the recommendation [such as investing strategy, insurance recommendation, or estate planning] happens naturally, because those action items are a natural part of the conversation. Which means it’s more likely to be implemented.”

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Elizabeth Michaelson Monaghan is a writer and editor whose work has appeared in City Limits, Paste, Library Journal, and other titles. She lives in New York City with her husband, son, and many toy trucks.