Somewhere in the thick of my busy West Coast book tour last month, I met a darling young woman. It wasn’t at one of my book readings or book parties — in fact, it was a chance encounter. But there she was, reading my book … and there I was, thrilled to meet her.
As we settled into a sweet conversation, she began to tell me how she’d discovered my work. And it’s a story as old as time. (Well, OK, not as old as time — but at least as old as the very first workshop I gave about money, over 15 years ago.) It’s a story I’ve heard hundreds of times, but even now, it always touches me, deeply.
This young woman (I’ll call her “Grace” in our story, though that’s not her real name) was in her early thirties, married, with two young children. Grace had begun to wake up to the fact that something needed to shift with her relationship to money. She wanted to “get better at money” (more on that in a moment). She knew something felt off.
Grace looked in the places most people look, when they’re trying to improve their money relationship. She read traditional money management books and websites, most notably Dave Ramsey’s.
But, like many people who eventually arrive at my digital doorway, Grace’s enthusiasm for Dave Ramsey quickly soured. Like many popular “money gurus,” Ramsey’s teachings tend to be very black-or-white. Especially his stance on debt: you are never truly free when you are in debt, he preaches. And while his methods have proven helpful for many, many people, this one was a sticking point for Grace.
“I wanted to get better with money — but with two young kids and big student loan debts, I knew I couldn’t become debt-free, overnight. It just wasn’t possible, for me and my husband. That’s why it was so healing and so helpful to discover your work, Bari, and your softer, more compassionate approach,” Grace confided.
There are a few reasons why mainstream financial advice didn’t cut it for Grace and her family:
1. Like everyone, Grace had particular reasons that brought her to her money work. Deep, fundamental qualities like peace of mind, clarity, and support that felt missing from her money relationship. (Which of these 8 Money Areas brought you here, today?)
2. Money isn’t just about the practical stuff. It’s also about our emotions, our individual money stories, our relationships, what phase of life we’re in, and so much more. There’s a reason why I always begin with Money Healing, then move on to Money Practices, and finally zoom out to Money Maps. Mainstream money advice usually focuses entirely on Money Practices, but we need all three of these phases when working on our money relationship — and we usually need them in this order.
And, perhaps most pertinent to Grace’s story,
3. Being “good with money” isn’t all that simple. There are 5 main money areas that I like to teach people about: earning and income, spending and expenses, saving, debt, and investing. And black-and-white, all-or-nothing views usually aren’t all that helpful when you’re juggling these five different areas (not to mention two toddlers!).
Today, I’d like to give you an overview of the Five Money Areas and some tips for working with each of them.
But first, pause for a moment. Take a breath. Turn within. And ask yourself:
What does “being good with money” mean, to me?
We all have our own definitions of financial success, and these can shift over time, depending on what phase of life we’re in.
Does “being good with money” mean earning a lot, to you? Does it mean having a healthy savings habit? Does it mean being frugal and living below your means? Does it mean having conscious, healthy boundaries around giving — not too much, not too little?
In fact, “being good with money” can mean any and all of these things. So let’s bring in a little more subtlety and nuance here.
The Five Money Areas
Simply put, the are the five main ways you can interact with money:
1. Earning and income
Some people seem to be natural-born earners. From that first Christmas break when they earned hundreds of dollars shoveling snow from driveways, right up to their lucrative, corner-office job (replete with executive secretary), earning seems to be a muscle they were born flexing.
For others of us? Not so much. Many people, myself included have struggled beneath “money ceilings,” and have to do some tough soul-searching and take some practical steps to “overcome under-earning.”
Growing your earning capacity is incredibly multifaceted work, so if this feels “up” for you right now, please know: there are many, many tools you can draw on, from cultivating and claiming your value to the outer work of pricing, business models, and income streams with determination, patience, and compassion, you can stretch your earning capacity. (Here’s a great place to start.)
2. Spending and expenses
Guess what? I’m not going to tell you to skip your daily mocha. Becoming savvier about your spending just isn’t that simple!
Before attempting to change any of your spending habits, it’s essential to know what they are. That’s why I always recommend tracking your spending for at least three months before shifting anything. Awareness is key, here. Compassionate, non-judgmental awareness. Once you know what’s happening with your spending (which takes more than one month), you can make a more informed decision about what you’d like to shift, with it.
Some people feel an urge to spend less. They know they overspend as an attempt to soothe themselves or fill some old, emotional wound. Money healing is key, here: what is your personal money story? How do you feel, before, during, and after spending? The Body Check-In can be a powerful ally to help you bring mindfulness to this area of your money relationship.
If you do decide you’d like to spend less, please do so with utmost compassion for yourself. Is your daily mocha actually an incredibly nourishing ritual, where you connect with friends and indulge in a life-affirming way? Only you are the boss, here. (Not your grandfather. Not Dave Ramsey. Not even me!) Find gentle, self-loving ways to trim your expenses and plug “money leaks.” You might consider a short-term “money cleanse.”
However, you may find that your growing edge, with spending, is actually spending more. I’ll never forget one dear woman in my year-long program who shared a picture of herself in a smart new outfit, grinning from ear-to-ear. After tracking her income and expenses (and her emotional and bodily sensations around money) for a few months, she had realized that she had been unconsciously and unnecessarily depriving herself for far too long. Conscious splurging became her new self-care practice, and we all applauded her!
Spending wisely isn’t just about being frugal: making good spending decisions must take into account our goals and values, in addition to the numbers. And sometimes it might even wiser to spend a little more to save yourself some energy.
Know thyself, with spending — and treat thyself with immense, discerning love.
Many “financial gurus” tell us we should save money, no matter what. Even if it’s just ten dollars a week, they say, savings is a muscle that needs to be strengthened.
Guess what? I disagree. There are some times in our lives when we simply can’t afford to add to our savings. When our son was born, Forest and I stopped saving, entirely. In fact, we dipped into our savings: we were both going through intense health challenges, and shifting our income streams, and needed our savings to keep afloat. That’s what your savings is there for!
I firmly believe in the power of savings. But I also know that what phase of life you’re in greatly affects your ability to save. If you can save right now: wonderful! Be as savvy and compassionate about it as you can. And if you can’t save right now? Well, be as savvy and compassionate about it as you can.
This was the biggie, for Grace. Despite Dave Ramsey’s admonitions that she should pay off her debt at lightning speed, this simply wasn’t possible for Grace and her young family. They had a sizable student loan debt. They could only tighten their belts so far, without suffering. So this meant they would only pay their minimum monthly payments, for some time.
I simply don’t have an all-or-nothing, black-or-white view about debts. Sometimes, we can consciously choose to take on some debt — whether it’s to make an investment in education or earning potential, or to see us through a challenging Big Life Transition, or to build our credit score, over time.
Of course, sometimes we have huge resistances to paying down our debt. Some people experience debt as something akin to addiction, and take on far more than is healthy for them. Again, Money Healing is a first step, here. Be gentle with yourself — tough love is not the M.O. for unravelling emotional wounds. Get support — first emotional, then strategic. Play around with renaming your debt, to honor what it gave you (often, this shifts repayment resistance in a big, big way).
Perhaps most importantly of all: know that taking on a paying down debt is immensely affected by your phase of life. Our lives have rhythms and cycles, ups and downs, moments of expansion and periods of paring down. Your debt will likely reflect these moments. Consider how your debt might be a “hidden asset.” Did that huge student loan actually give you an incredible education that you’re so grateful for? Zoom out and take a broad view of your life journey, and where your debt has (or could) support it.
In the past several years, one of my dear colleagues, Christopher Peck, opened my eyes to a broader, richer definition of investing. It’s not only about stocks and bonds and cold, hard cash (not that there’s anything wrong with those!). In fact, Peck and his colleagues describe investing as “something that we all do by directing our time, attention, energy or money in ways that move us toward our future dreams, using a diverse range of strategies.”
Oooooh, I love that! Investing isn’t just about money: it’s about your energy, time, attention, and gifts. And it’s about consciously choosing where to direct them. Investing is an opportunity for you to tune into yourself, listen to your life, and consciously direct your precious resources the very best way you can.
Tips and Tidbits
As you work with one, two, or more of these 5 Money Areas, it may serve you to keep these in mind …
— We all have our gifts and growth opportunities.
You might be a master saver, but find it challenging to earn more money. That’s OK! We all have different strengths and different challenges, within these 5 Money Areas. Honor what you’re already good at — in fact, celebrate it! And don’t be shy about getting support for those areas where you want to grow.
— Each money areas contains each of the 3 phases.
As I mentioned, my Art of Money methodology contains 3 phases: Money Healing, Money Practices, and Money Maps. Each of these 5 Money Areas can be viewed through each of those 3 phases.
For example, if you want to expand your capacity to earn money, you start with Money Healing: what did you learn about earning from your family, how’s your relationship with claiming your value, what inner practices can you do to bolster your self-worth and earning potential?
Next, you could look at Money Practices for earning: are there techniques for negotiating a raise you could research, or a cutting-edge course in your field that could increase your earning potential?
Finally, zoom out with Money Maps: what phase of life are you in, and how does earning fit into that? Are you in a big health crisis at the moment, with limited ability to earn? Are you expecting a baby and needing to bring in more money than ever before?
— Prioritize. Consciously.
It’s usually not possible (or even ideal) to focus on all five of these money areas at once. When we’re working on our financial strategy or our emotional ties to “money stuff,” it can be helpful to focus on one or two of these areas at a time, while placing the others (temporarily) on the back burner.
What’s even more helpful is prioritizing specific areas in a conscious, intentional way. For example: remind yourself that you’re just working on savings and spending right now — and it’s OK to hold off on deep work around your earning potential, for the moment. Know what phase of life you’re in, where you’re headed, and what that means for your money work, in these areas.
Ultimately, after reading my book, Grace decided not to take the Dave Ramsey approach to aggressively paying down her debt. It simply wasn’t the right moment in her little family’s life-and-money journey to prioritize debt repayment: they were in a transition phase where their efforts would be better spent by increasing their earning potential and investing time and energy with their young children.
Grace and her family researched debt consolidation options, so they could be as savvy as possible about placing their loans on the “back burner.” She and her husband are keeping current with their repayments, making regular, small payments — and they look forward to being more robust with their debt repayment in a few years, when their children are older and they can loosen their belts a little. But for now, they feel great about prioritizing others of these Five Money Areas: earning, spending, and investing.
Most importantly, Grace felt confident and clear about her choices. She had made them consciously and compassionately.
And that, my friends? Is being good with money.