How I use negative feelings about finances to my advantage
I have never had much patience for dwelling. Time is a limited resource and I want to use it in the best possible way. Dwelling is a waste.
I also have little patience for sweeping things under the rug and pretending to be happy when I'm not. Ignoring a problem is a great way to ensure it will come back to haunt you later. Plus, in the meantime, it looms in the background, ruining just about everything. Like dwelling, sweeping things under the rug is a fruitless use of one's time.
But it is certainly easy to give in to both. You can dwell on negativity, and you can ignore it just as well. Neither really accomplishes anything — in fact, they make things worse. Money is an emotional topic, and we've talked before about how it is more about mind than it is about math. Still, even though our emotions are delicate and vulnerable, we can hack them and make them more practical and productive for our lives. When it comes to money, at least, I try to take my negative feelings and employ them to serve a purpose. I get something useful out of them, and then I throw them away.
I'm starting to sound like Oprah, so let's jump into a few examples, shall we? Here's how I use negative financial feelings to my advantage.
Feeling defensive about financial advice
When I was paying off my student loan, I was frustrated and stressed. My mom, the ultimate saver, tried to give me some advice. She told me about a friend who made a sacrifice to reach her own money goal — i.e., she sold her car and took public transportation. It worked for her, but I rolled my eyes because there was no way I could sell my car and take public transportation. It just didn't make sense on paper for me. Her advice was inapplicable, I thought. And for some reason, it annoyed me.
But I was completely missing her point. She wasn't telling me to sell my car! She was urging me to think outside the box and look for my own opportunity to cut back.
I've since learned that sometimes I can use the defensive feelings I have. Of course, I occasionally come across advice that truly doesn't apply to me — not everything is going to work for my situation. In those cases, I ignore it and move on. But sometimes I come across advice that hits a nerve. I feel like it doesn't apply to me, but, instead of moving on, I get upset. I feel misunderstood. I feel blamed. For whatever reason, I take it personally. But when this happens, there usually is a reason, and identifying it can be a big help.
I've learned to recognize the defensiveness and reroute my thinking. Instead of rolling my eyes and getting upset, I think:
Why is this upsetting me? For example, I didn't feel it made financial sense for me to sell my car and take the bus.
Is it possible I'm missing the point? My mother wasn't actually telling me to sell my car. The theme of her example was to find a high-cost area of my budget and see if I could reduce it.
Is there a way this could actually apply to me? Yep — rent. I moved back in with her until I paid off my loan.
Instead of dwelling in self-pity and anger, those questions help me reroute my defensiveness into something productive.
I enjoy being frugal, but I mostly enjoy what I get out of frugality — the freedom to splurge on the things I love. By living below my means in every other area of my budget, I am able to use my hard-earned money on things that make me happy and fulfilled, like travel.
This works for me and for my finances, so I shouldn't care what other people think. Still, I can't help but feel a little ashamed when I tell a friend I took another weekend trip and she raises an eyebrow, or when I tell my parents I might move into a better place and I detect just a smidgen of judgment in their collective voice, even though they trust my decisions.
My choices might be easily justified, but instead of simply brushing off this judgment feeling I sense, I try to use it to my advantage. It's a spot-check I use to keep my spending in order. When I am confronted with the side-eye, I ask myself:
Do they have all the facts? Many of my friends don't really know how frugal I am. But my parents do, so that tells me their judgment might be worth considering.
Do I trust their judgment? Yep, I trust my parents' judgment when it comes to smart spending and saving.
Should I give this type of spending more thought? In the case of moving to a better apartment, yeah. I sat down and talked about it with my parents to get their full perspective.
There is nothing wrong with giving your spending a little more thought. And if someone doesn't know the full scope of my financial situation, I simply ignore the side-eye and continue to enjoy my weekend trips. I don't blame them because it does look spendy, especially if you don't know how much I cut back in every other area and how much I save. But instead of dwelling on the shame, I rethink my spending choices when it's appropriate.
All the experts say you should ignore market dips because it's not about timing the market, it's about your time in the market.
But tell me your stomach doesn't sink, at least a little, when you check on your portfolio and it has plummeted. It's only natural!
Some people give in to that feeling and end up selling their assets. This is a bad idea. Some people sit with that feeling and just try not to look at their portfolio. But there's something productive you can do with that sinking feeling: use it as a reminder to invest.
When the market dips, as it has recently, I look at my retirement savings and see if there is more I can add to it. Why not buy when prices are low? It's like dollar-cost averaging. With dollar-cost averaging, you invest a large chunk of money over time, but you buy more when prices are low and you buy less when prices are high. The idea is, you invest at a discount and, over time, you save more money.
Some studies show it works; other studies show it doesn't make much of a difference. Either way, when the market sucks, I use that feeling of nausea I get as a reminder to invest.
Basically, I use negative financial feelings as an alarm. Ignore it, and it only gets worse — and louder down the road. Dwell on it, and you go nuts. When it goes off, I can decide whether it's a false alarm or whether it's trying to make me aware of something I ought to consider. Maybe I'm doing something wrong, or maybe I could just be doing something better. Either way, rerouting these feelings serves a purpose for me, and it's a much better use of my time.
Do you use negative (or positive) feelings to help you accomplish your financial goals?