Psychological Relationship with Money
Understanding your psychological relationship with money is critical for the self-employed. Also, be aware that your relationship with money may change when you become your own boss. Pay attention to your thoughts, feelings, and reactions when it comes to money.

Do you act as if money grows on trees? Does it flow through your fingers like water? Are you miserly to a fault? Or, somewhere in between – frugal, but smart about money? You need to know yourself and do whatever you need to do in order to stay financially solvent.
Money (specifically cash flow) can be a huge stressor for the newly self-employed.
For some people, they are less stressed about their finances when they work for themselves; but, for others it is far more stressful and they often end up continually obsessing about their bank balance.
When you decided to work from home, there is a good possibility that one objective was to be happier and healthier. Obsessing about your bank balance does not contribute to a happier, healthier life.
It is very important to look at your relationship with money and how you react to financial challenges – and . . . I can promise that you will have challenges. The goal is to learn to handle every situation without obsessing.
Planning and follow through are two major factors in handling money well. When you are faced with a money challenge, figure out what went wrong? What did you do, or not do, that created the problem? Then, make adjustments so it does not happen again. In other words, learn from your mistakes
If you can’t make the analysis and adjustments on your own, find someone to help you!
The Potential Problem
Problems generally stem from erratic income.
- You may earn a different amount (or nothing) every day.
- You won’t get a paycheck every month or every two weeks.
- There is no set salary or hourly wage that you can depend on – as is the case when you work for someone else.
Depending on your business and how you have chosen to work, you may bill by the day, by the hour, by the word, or by the sale, etc. With any of those scenarios, your income is directly linked to your productivity and time management – and it is rarely constant.
The Temptation
- To think of time as money – and you can’t “waste” a minute.
- To work around the clock – it becomes an obsession to keep the money flowing.
- To ignore you family and your health and work far too many hours – for the money.
The Danger
When money becomes the center of your world, it leads to unhealthy behaviors.
For example: You tell yourself that you have been working really hard and deserve a reward. You decide to splurge on a $30 widget that you really want. You tell yourself it’s OK because you can work an extra hour on the ABC Project and earn the money back. Unfortunately, things do not go as planned and you earn $20 less that day, so you cancel plans with your family and manage to almost break even. That is a lose-lose from every angle.
Every decision you make is based on money, which means your psychological relationship with money is not a healthy one – and makes it difficult to be happy.
The Solution
Set strict time limits for working and set clear, realistic earning goals that are doable within your chosen time limits
For example, you may set a realistic goal of earning $170/day. Then, you make sure that you earn at least that much before closing time (e.g. 5:oo pm). If you earn more, GREAT! But, you only work overtime if you fail to meet your goal. Using this type of system creates a more stable income and a much healthier lifestyle.
When you are your own boss, a healthy psychological relationship with money can be a critical factor in whether you are successful, or not. So pay attention!
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