The most damaging thing you can do for your money is believe that you’re bad at money.
I hear people say this all the time—if we’ve met in real life, you might have even said it to me. I’ve written about it before, but over the past year or so, I’ve come to believe that truly, no one is bad at money.
Are there better choices out there? Sometimes!
Is it possible to get better at money? We all could.
Is it worth putting in the effort to improve your relationship to your money, and shift habits that aren’t getting you closer to your goals? Deeply yes!
But those things can be true without you being bad at money.
So let’s break down some of the most common reasons people think they’re bad at money, and debunk them right here and right now.
You are not bad at money if you have debt
Debt comes in many forms, from many sources. Maybe it’s student debt, maybe it’s credit card debt, maybe it’s a personal loan. No matter what kind you have, no matter how you got into debt, the existence of debt does not mean you are bad at money, and it’s deeply important that you not conflate the two.
Getting out of debt is a Big Financial Deal, in that it’s kind of the same as starting to save money. You’ve probably got to learn about budgeting, change some spending habits, make more money, or all of the above. If you’re trying to do that with a deep-seated belief that you’re bad at all of these things, because you are bad at money, you are just making it ten times harder on yourself!
Having debt is a fact, like having thumbs. It doesn’t have to mean you’re bad at money.
Try this instead: I have debt, and I’m learning about how to manage it and pay it off.
You are not bad at money because you made a “bad” financial decision in the past
People are doing the best they can, with the information they have at the time.
That’s a good statement to remember, and it’s almost easier to apply to other people than it is to apply to yourself. But if you can extend that grace to anyone, it should be yourself.
Maybe you lost the first $1,000 you invested in the stock market on a hot stock someone recommended. Maybe you went away for school and ended up saddled with more debt than you’d like as a result. (Heck, ask me about the time I strongly considered staying in Australia to finish my degree at $30,000 a year tuition with no regard for the financials because “it would all work out somehow.” I didn’t, but trust me it was not because I was out here thinking about my future financial self.) Maybe you didn’t buy a house, and the housing market went wild—or you did buy a house, and the market dropped.
You made those decisions to the best of your ability with the information you had at the time. It doesn’t mean you were (or are) bad at money. It just means you have more information now than you did then.
And that’s a good thing!
Try this instead: I’ve learned a lot from my history with money.
You are not bad at money if you feel guilty about your spending
I can’t tell you how often I’ve had people tell me they turned off their spending-tracker apps after one too many “You spent how much at Uber Eats this month?!” notifications. (I am pretty sure none of the notifications actually said this to them.) Tracking where their money was going made them feel guilty for the choices they were making, so they stopped tracking.
There are a lot of reasons for feeling guilty about your spending. Here’s just a sample, because as I will say until I die, money is about feelings:
- You don’t understand your overall budget. If you are truly uncertain about whether you’re going to have money to last the month, it’s normal to feel guilt over every $4 organic cookie, you know? It’s a lot easier to feel OK about your spending when you know it’s part of a spending plan and you have a $40 cookie budget.
- You know you’re neglecting your financial priorities. If you know you’re not saving for retirement or that you haven’t yet started an emergency fund, or even just that you know you need to save for that upcoming vacation but you aren’t, then yes, it’s easy to feel guilty about your other spending!
- You’re not clear on what you value. There’s plenty of cultural conversations that subtly (or not so subtly!) imply that some spending is more worthy than other types of spending. Consider your reaction to “I have a $300 book budget” versus “I have a $300 makeup budget.” The only thing that really matters is whether a) I can spend $300 on wants without impacting my other financial goals, and b) whether I value books or makeup that much. However, that’s not the conversation we have about things—so it’s easy to feel guilt if you haven’t given your spending priorities a lot of thought.
Once you know what the root cause of your guilt is, it’s important to remember that fixing the root cause is a floppity-jillion times more helpful than just telling yourself you’re bad at money and then continuing to feel badly about it.
Try this instead: I don’t like _________ about how I’m spending my money right now, and I’m going to try _________ to fix it.
You are not bad at money because you don’t know much about it
No one is born knowing about money. That’s just science.
But just because you don’t know something—especially a thing that no one ever taught in school, and that people have drastically different access to growing up—doesn’t make you inherently bad at it.
Letting a lack of knowledge stand in the way of getting knowledge is…. I mean, just wildly unproductive. It’s much easier to put up your hand to ask someone to explain a money thing when you’re not fighting the story that you’re bad at money, and that’s one of the best ways to learn: ask questions.
Try this instead: I don’t know much about money, but I’m interested in learning.
Stop telling yourself you’re bad at money
The only thing you’re doing with a story that you’re bad at money is making it harder to take the steps you need to take to feel good about your relationship with your money. Money is hard enough as it is—stop telling yourself you suck at it!