By Kim Potgieter
It’s no secret that managing our finances has become increasingly challenging in today’s economic climate. With rising bond payments, school fees, and the ever-increasing cost of living, it can feel like we’re constantly trying to keep up. Incomes have remained stagnant while inflation continues to climb, meaning we are effectively earning less than before. Add to that the looming threats of job loss and growing debt, and it’s clear why so many of us feel the pressure.
To make matters worse, only 6% of the South African population is on track to retire comfortably, according to the 10X Investments Retirement Reality Report 2023. It’s difficult to invest when households are struggling with debt and defaulting.
According to the Experian Consumer Default Index (CDIx), by the end of 2023 South African households were grappling with nearly R2 trillion in outstanding debt, with R25.8 billion already in default.
So, where do we begin to take back control?
The emotional impact of money
Money is one of those taboo topics, much like sex and death, because it brings our deepest emotions to the surface – emotions like shame, fear, guilt and envy. But here’s the thing: our emotions around money don’t just sit quietly in the background. They drive our decisions and behaviour with money, often leading us to choices that don’t serve us well. Whether it’s overspending out of envy, hoarding out of fear or using it to control or deny, these emotional responses can trap us in unhealthy money patterns. And if we don’t address them, we end up ignoring money altogether – because facing it feels too painful and vulnerable.
Our financial decisions aren’t purely based on numbers on a spreadsheet; they are deeply influenced by our personal stories, experiences, and beliefs about money. Without first addressing these underlying emotions, it’s nearly impossible to change our financial situation. We’ll continue to make the same choices, form the same habits, and ultimately, feel the same way about money.
Why your relationship with money matters
Before you start planning your finances – whether it’s paying off debt, revising your budget, re-evaluating your investments or seeking alternative sources of income – the first step is to acknowledge and understand your relationship with money. In my work as a financial planner, I’ve seen how deeply these relationships run. Many clients feel undeserving of money, often due to feelings of inadequacy or beliefs that money is inherently evil.
Others hoard money, never believing they have enough. For some, money is a friend and a tool to achieve their goals. Still, for most, money is a relationship that’s never really been examined. It’s just there, influencing decisions, shaping opportunities, but not fully understood.
The truth is, just like any relationship, your relationship with money needs attention and care. You need to work on it if you want to see positive change. Because much like our relationships with people, our relationship with money can either support our growth and fulfilment or keep us trapped in cycles of anxiety and fear. If you can’t change how you feel about money, your behaviour with money won’t change either.
Is money your friend or enemy?
Your answer to this seemingly simple question reveals a lot about your relationship with money. What would you say if you had to go to couples therapy with money? And what would money say about you? Is money something you pay attention to or do you tend to neglect it? Is it a source of fear and insecurity or does it add value to your life? Perhaps more importantly, do you feel worthy of having money in your life? Do you believe you deserve financial success?
Where to start: Rebuilding your relationship with money
1. Reflect on your money memories
Take a moment to revisit your earliest memories of money. Imagine money as a person: When did you first meet, and how did it make you feel? How did your family talk about money? What lessons were you taught about money? Understanding where your money beliefs came from helps you clarify how your past experiences influence your current financial behaviours and habits.
2. Identify your core money beliefs based on your memories
Once you’ve reflected on your money memories, assess the beliefs that have shaped your financial decisions. How have these beliefs served you? Have they helped or hindered you? Remember, these beliefs aren’t always rooted in reality, but you can decide whether they enable or limit your financial freedom. Recognising which beliefs need to change is crucial to fostering a healthier relationship with money.
3. Flag your money habits
Your money habits are the daily, repeated behaviour that has built your financial reality. As you become more aware of your money mindset, you will notice habits that get in the way of change and deter you from being financially free and fulfilled. These habits limit your potential to unlock your financial freedom and even get in the way of reaching your true potential or happiness.
So, what is money to you? Something to be scared of? Someone you want to pick a fight with? Or is money a friend to you on the journey of life that lies ahead? Having money as your friend has very little to do with having money. It’s about having money where money belongs – as an enabler to help you live your life right.
* Potgieter is a certified financial planner, author and coach.
PERSONAL FINANCE