April = National Financial Literacy Month

By, Charmain F. Jackman, PhD

Financial health = Mental Health: 5 Must-Ask Questions To Get Your Money and Mind Right!

The more I learn about money, the more I realize how much I do not know! When I first started my therapy practice 16 years ago, I wanted to make some extra money to travel and save money for a down payment on a home. I did pretty well, but fast forward 16 years, and I realize how financially illiterate I was back then. I thought I understood my financial situation. I worked two jobs, saved money in the bank, paid my bills on time, and had no debt! Plus, my credit was AMAZING!! But none of these strategies build generational wealth! Not one!

What I now know is that I had a “complicated” relationship with money! While I was saving money, I was not letting my money work for me. Worst of all, I was not building wealth. I know more about money now, but the education is ongoing! As we recognize National Financial Literacy Month, here are 5 questions that you should be asking yourself to get your money and finances right:

1. What is your relationship status with money?

Imagine, you and your money are in a relationship (which technically you are), how would you characterize your relationship status? What is the first word that comes to mind? Complicated. Cuffed. Separated. Blissful. Estranged. Confused. Heartbroken. Exclusive. Honeymoon. The word or phrase that you choose will give you insight into how you view and spend your money and finances, and what you spend your money on. Take some time to reflect and decide what you want to be different. Regardless of where you are now, you can make changes to develop a healthier relationship with money.

2. What is your money script?

Your money scripts are the “unconscious beliefs” that we have about money. These money scripts develop in childhood and drive our decisions about how we use or spend money. Dr. Bradley Klontz, financial psychologist, developed the Klontz Money Scripts Quiz, which helps you to assess your beliefs about money. There are 4 money scripts: money avoidance, money vigilance, money worship and money status. Discovering my money script has been a game changer for me and has helped me to make better decisions about finances in my personal life and as an entrepreneur. Take the free Klontz Money Scripts quiz here.

3. What is your net worth?

In 2015, the Boston Federal Reserve Bank published a report, The Color of Wealth, that showed the net worth of $8.00 for Black people in Boston compared to $247K for White people. Unbelievable, right?! What I learned from this report, was that I did not know my own net worth or even how to calculate it! Now, I do! Understanding your net worth helps you to plan for the future and to calculate what you need to earn, save, and invest for retirement or the lifestyle you want! There are many ways to calculate this information. I use Mint which calculates your net worth based on financial information that you provide.

4. What are your monthly expenses?

Knowing how much you spend every month helps you to decide how much you need to earn to cover your expenses. Creating a monthly budget is a useful tool for tracking income and expenses or how money is flowing in and out of your wallet/purse each month. Knowing your numbers and living within your budget can help to reduce stress and ease your peace of mind.

5. Who can help me get better at managing my money?

Unless you have a degree in money and finance, my guess is that you would benefit from working with a financial professional who can help you better understand your financial picture, your mindsets around money, and how to make better money decisions. These financial professionals include financial coaches (help you with your habits and mindset, and beliefs about money); financial advisors (help you build wealth); and financial planners (help with short-term and long-term financial goals). Simply put, this is not something that you should do on your own! Don't be afraid to ask for help.

Financial literacy is about changing your financial situation and building generational wealth. Remember, you don’t have to do it alone! There are people with experience who can help. Many cities also have financial literacy courses for adults and children, so take advantage of these resources. Get to know your money and finances in a whole new way! When you thrive financially, you thrive emotionally!