The Art of Managing Money (a Self-Awareness Approach)

Got your mind on your money, and your money on your mind?

That’s no bad thing.

Our relationship with money is fertile soil for self-insight. How we manage money, and the pitfalls we fall into, tells us tons about our beliefs and values. It’s also the first step in getting a handle on things.

I’m not pretending to be an expert in finances: I’m definitely not. Like you, I have my own unique set of challenges. Therefore the practical advice you’ll read below is sourced from money master, J.D. Roth. You should check also out his awesome website.

Because I believe that there is no life area that is immune to the benefits of greater self-awareness, that is the approach adopted in this article.

3 self-aware steps to managing money better


There are, I suggest, three elements to this:

  1. Understanding our exact challenges with money.
  2. Uncovering what’s behind the challenge, and addressing any mindset stuff if necessary.
  3. Monitoring how we are handling money and implementing some smarter habits (over to J.D. on that).

Step 1: What’s your (money) problem?


According to personal finance expert and ‘Money Girl’ podcaster Laura Adams, there are 4 main reasons that we freak out about money:

  1. We consistently spend more than we make.
  2. We spend exactly what we make, living from paycheck to paycheck.
  3. We have a huge amount of debt (e.g. student loans) and are finding it hard to make progress.
  4. We don’t understand how to manage our finances and we get lost and overwhelmed trying to do so.

Unfortunately, one of these reasons (3) is sort of systemic. Of course, there is a valuable argument for not getting into debt in the name of education. But if it’s too late for all that, we need to smile and accept things the way they are and have a smart plan for paying off. No point in crying over split milk.

3/4 of the common money problems point to a need to shift our mindsets Click To Tweet

Otherwise, the common money problems identified are rooted in our psychology. And so it’s that we want to address, alongside implementing smarter habits around money.

Step 2: What’s your (money) story?


We all have a personal narrative around money. What’s yours? I suggest you look at your childhood and your parents’ attitudes to money – then and now.

My own narrative around money was: ‘I don’t have to worry or think about it. I have always had enough money to do the things I want to do. Sure, I got to sell my soul to get it. But that’s the price we pay! Viva la weekend.’

That’s a little different now. At this point, I care that what I am spending money on is aligned with what I value in life. I also recognise that selling time for money is one way of doing things, but there are other available routes. I can create something that adds value to the world, and generate income using that. 

Before, I didn’t have specific financial goals. I was coasting. Now, I have two or three specific financial goals that I am working towards. And in the process of getting more self-aware about how I spend money, I have had valuable insights about myself.

Identifying your personal narrative around money is a necessary first step in creating positive change Click To Tweet

Exercise: Identify your ‘money story’? In a few sentences (do it in your head if you want), identify the way money has featured so far you in your life.

Here are some other questions for self-reflection to get to your relationship with money:

  • Do you respect money?
  • Do you hate money/feel that it is the root of all evil?
  • Do you equate having lots of money with success and happiness?
  • Do you believe that money would solve all of your problems?
  • Have you found money to be scarce for most of your adult life?
  • What does ‘being good’ with money represent to you?
  • Do you think money has to be exchanged for time?
  • Do you believe you ‘deserve’ money through suffering a job you can’t stand?
  • Do you believe that it takes money to make money?
  • Is money ‘easy come, easy go’ for you?

If you want to go deeper with this, many excellent books have been written on the subject of beliefs and money. Some stand out mentions:

If you’re in debt


Debt is interesting. How do we get deeply in debt? Unless it is a expensive one off (e.g. student loans), your reason for getting into debt masks a set of beliefs, stories, desires and attachments.

According to mystic Jenny Griffin, the spiritual meaning of debt is a desire to be closer to our perfect, abundant, authentic self. As we become disconnected from what that means for us, we cast around for examples from outside. We borrow from a feeling of lack.

Our debts tell a story of our fixed beliefs and attachments to our desires Click To Tweet

I don’t know if that’s accurate for you. I have witnessed that spiraling, out of control debt seems to be rooted in insecurity. Resolving insecure feelings has to be a part of the solution if we are to stay liquid.

Step 3: Getting real about your spending and implementing new habits


Part of self-awareness is looking at money flow.

A couple of years ago, I decided to start tracking my outgoings. Doing so has made me a lot more aware of where my money goes. That also led to interesting revelations about my attachments and desires. I could see for example that I was spending money on training and education. Some of that was necessary sure, and also just what I enjoy and value.

But I could also begin to see that procrastination played its part, too. Investing in training was my way of putting off doing the work.

Are you tracking your outgoings? Are you living below your means? Click To Tweet

So how are you currently handling your money? Are you living below your means (honestly)? Is what you are spending money on aligned with your values? Are you saving? Are you valuing what you are giving?

Asking yourself these difficult questions should point you towards your growth opportunities.

Also, what’s your goal? Knowing that helps to define the actions you need to take. Maybe you want to save money. Maybe getting out of debt is your goal. Perhaps you want to turn your efforts to investing for your retirement. Getting clear on your goals is as important as being clear on your current growth opportunities.

A few ideas for mastering money

Some ideas for mastering your money from J.D. Visit his website or search around online for more tips:

  • Go online to check the best deals on checking and savings accounts.
  • Automate payments out of your account to save for retirement.
  • Get a free credit report at
  • Set yourself monthly and weekly budgets.
  • Calculate your spending. Use an excel spreadsheet to track your expenses.
  • Drive less.
  • Spend less on housing.
  • Spend less on food.
  • Become better educated.
  • Take a second job.
  • Sell your stuff.

For assistance in implementing habits, I suggest (no, shove you towards) Leo Babauta’s offerings. You could also read this guide I wrote a while back. 

One powerful solution to most money woes: buy less

weekend-1355505_640 (1)

Deciding to intentionally live with less is among the best decisions I have made in my life. As a result of paring down most of our possessions and determining to only buy things that are needed, we have found life greatly improved – Joshua Becker (the man behind Becoming Minimalist).

Like Joshua, I have found paring down my outgoings to be extremely fulfilling and liberating in a way I never expected. Now I equate rampant commercialism with psychological sickness and despair. I genuinely struggle to find the pleasure in buying things that I don’t need.

Buying less isn't the fix for every financial problem - but it would solve a lot of them Click To Tweet

I never expected the road to financial integrity to feel so…rewarding.

So consider that buying less might not be as unpalatable as you think.

Buying less isn’t the fix for every single financial problem, but it could certainly help – if not solve – the common problems of debt, not earning enough money, feeling trapped in your job (the decision to live with less is empowering and opens the door to finding work you love), fearing retirement and financial stress.

Managing money fears and stress

I wanted to address this because fear around job and financial insecurity are very real and something to manage of itself.

As for any life area in which we experience fear, we benefit from bringing mindfulness. When we do that, we are immediately no longer lost in and swamped by the emotion. We start to have the presence of mind to distinguish our stories from the facts, and we work to ‘go beyond’ story by letting ourselves feel the sensation of fear. What we tend to do is routinely seek escape. This is hard at first, but ultimately necessary.

Managing scary emotions around money is as important as managing money itself Click To Tweet

Spiritually, money relates to survival issues, which in turn relates to your root chakra. If you like and if you find meditation helpful for relieving stress, you could try a special root chakra healing meditation. 

How to retire by 40


Question: what does financial independence mean for you?

Here’s a definition from Roth, which I love: “Financial Independence occurs when you’ve saved enough to support your current spending habits for the rest of your life without the need to earn more money. You might choose to work for other reasons but you no longer need a job to meet your expenses.”

To achieve financial independence, heed the basic rule of personal finance: to build wealth, you must spend less than you earn. Instead of following the standard advice to save 10%-20% of your income, practice extreme saving. Your goal should be to save at least 50%of your income, and 70% is better.

To build wealth, the goal is to save at least 50% of your income Click To Tweet

His strategy for achieving financial independence is:

  1. Minimize your spending.
  2. Maximize your income.
  3. Funnel your savings into investment accounts. On this, Roth says “take advantage of employer- and government-sponsored plans first. Then route your money to regular investment accounts. Don’t get fancy. Invest your money into low-cost, diversified mutual funds. Ideally, choose a total-market index fund, such as Vanguard’s VTSMX. Ignore the news. Ignore market fluctuations. Ignore everyone. Keep investing during good times and bad.”

If you follow these three steps, you will become rich. Cool cool.

J.D.’s get rich slowly manifesto


This 15 tenet philosophy is freaking great. I hope you love it as much as I do.

To build wealth, you must spend less than you earn. This is the basic law of personal finance. Basic, yes, but important. Successful personal finance is all about building positive cash flow. By decreasing your spending while increasing your income, you can get out of debt and build wealth.

Smart money management is more about mindset than it is about math. Financial success comes when you master the mental game of money. It’s not about understanding the numbers. The math of personal finance is simple: spend less than you earn and invest the difference. We all get it. Instead, it’s controlling your habits and emotions that’s difficult.

The road to wealth is paved with goals. Without financial goals, you have no direction. If you have no direction, it’s easy to spend money on things you’ll regret later. But if you’re saving for a house, your daughter’s college education, or a trip to Europe, your goal will keep you focused, making it easier to spend on what’s important and ignore the things that aren’t.

Saving must be a priority. Most financial gurus recommend saving 10% or 20% of your income. That’s great, but if you really want to make an impact, aim to save 50% or 70% of your income. If you have to start small, start small. Even $25 a month is good. As you earn more and develop better habits, save as much as possible.

Small amounts matter. Frugality is an important part of personal finance. Your everyday habits have a huge impact on your financial success. Thrift helps you build good habits, and makes a real difference over time. Plus, there are tons of opportunities to flex your frugal muscles.

Large amounts matter more. It’s good to clip coupons and to save money on groceries, but it’s even better to save on the big stuff like buying a car or a house. By making smart choices on big-ticket items, you can save thousands of dollars at once. Practice thrift, but always be looking for Big Wins. Big Wins are the quickest way to wealth.

Practice thrift, but always be looking for Big Wins Click To Tweet

Slow and steady wins the race. The most successful folks are those who work longest and hardest at things they love to do. So try to find ways to make frugality fun, and recognize that you’re in this for the long haul. You’re making a lifestyle change, not looking for a quick fix.

The perfect is the enemy of the good. Too many people never get started putting their finances in order because they don’t know that the “best” first step is. Don’t worry about getting things exactly right — just choose a good option and do something to get started.

Failure is okay. Everyone makes mistakes — even billionaires like Warren Buffett. Don’t let one slip-up drag you down. One key difference between those who succeed and those who don’t is the ability to recover from a setback and keep marching toward a goal. Use failures to learn what not to do next time.

Use failures to learn what not to do next time Click To Tweet

Do what works for you. Each of us is different. We have different goals, personalities, and experiences. We each need to find the tools and techniques that are effective for our own situations. There’s no one right way to save, invest, pay off debt, or buy a house — and don’t believe anyone who tells you there is. Experiment until you find methods that are effective for you.

You can have anything you want — but you can’t have everything you want. Being smart with money isn’t about giving up your plasma TV or your daily latte. It’s about setting priorities and managing expectations, about choosing to spend only on the things that matter to you, while cutting costs on the things that don’t.

Being smart with money is about choosing to spend only on the things that matter to you Click To Tweet

Financial balance lets you enjoy tomorrow and today. You don’t have to choose between spending today and saving for tomorrow. You can do both. Strive for moderation in all things: Pursue your goals, but don’t forget frugality; be frugal, but don’t forget your goals.

Action beats inaction. It’s easy to put things off, but the sooner you start moving toward your goals, the easier they’ll be to reach. It’s better to start with small steps today than to wait for that someday when you’ll be able to make great strides. Get moving.

Nobody cares more about your money than you do. The advice that others give you is almost always in their best interest, which may or may not be the same as your best interest. Don’t do what others tell you just because they hold a position of authority or seem to have a persuasive argument. Do your own research, get advice from a variety of sources, and in the end, make your own decisions based on your own goals and values.

It’s more important to be happy than it is to be rich. Don’t be obsessed with money — it won’t buy you happiness. Sure, money will give you more options in life, but true wealth is about something more. True wealth is about relationships, good health, and ongoing self-improvement. Everything else is a lower priority.