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Here we go!
Thanks Olivia for asking today’s question about family debt:
I keep hearing you mentioned that you have to have compassion when you’re figuring out your money. What does that mean?
This is something that I dive deep into in my free course Money Relationship Rescue. if you’re interested definitely check that out.
In the meantime, let’s dive more into compassion here and how it can help you. First, let’s define what compassion actually means. Compassion means to be loving and forgiving at the same time. You can tie it into empathy where you’re really putting yourself into someone else’s shoes and you’re trying to understand what it is that they’re going through.
Compassion is really important for your finances because a lot of the time we’re just so judgmental about what we do. When we get caught in that shame cycle we blame ourselves for bad things that happen or we’re judging ourselves too negatively for mistakes in the past. We’re going to get stuck in something that I call financial trauma.
Financial trauma basically means that you’re holding on to a past event, something that was could be perceived as negative to the point where you’re just stuck. You’re not making any decisions to improve your financial situation because you’re still reliving that situation in the past.
For example a really common one I hear is not investing sooner or because they trusted a financial advisor and they got screwed. That itself isn’t something traumatic. You end up shaming yourself and about why you’re such a bad judge of character you are. That whole negative view or energy is going to carry with you later when they find another financial advisor or trying to do something on your own. Maybe you’re stuck in analysis paralysis or keep repeating mistakes that are very similar over and over again.
So to have compassion means that you’re just telling yourself that whatever mistakes you make or what ever decision you’re currently making with your money is to that this is the best decision that you’re making based on what you know at the time. If it’s something in the past you just say “I thought this was the best for me at the time. This is just a decision that I made based on what I knew.”
That’s it. Because of more can neutralize those emotions, the more you can stop shaming or blaming yourself or even feeling upset about yourself over anything to do with money. When you clear that negative energy, you can open yourself up to see other opportunities or other ways of viewing what you can be doing differently with your money.
For example, you may know I went into debt over an ex-boyfriend and I was really distraught over that. Obviously that was a source of financial trauma. Now I did end up paying off my debt which is great, but I kept believing that I was really a bad judge of character. And that I was really really bad with money.
For the longest time all I did was hoarded my cash. I didn’t really invest it. It was really difficult for me to trust anybody with money because I felt like I wasn’t a good judge of character. I kept holding this financial trauma.
It took a while but once I let it go, I knew that I had to put my money to work for me so I started putting it into different types of investments. I talk to my husband now where we can best put our money and things like that.
Sometimes, those feelings of shame are still there, telling myself that I should have done this years ago. In times like these, I tell myself that the decision to not invest was something I thought was best for me at the time.
So the more you can really clear the negative emotions and be compassionate with yourself, the more you’re going to feel like you can reach your goals.
Let’s say you’re trying to start a business or are you trying to earn more money. The more compassion you have about taking risks in your business, the more likely you’re going to take more risks. If you’re going to hold that negative energy, it’s unfortunate because you’re going to stick with what’s easy and change is definitely not easy.
So I hope that answers your question and I hope that you guys start being more compassionate with yourselves as you’re working through whatever financial issues or goals that you are working on. Again, if you are really interested in bettering your relationship money and trying to clear up those negative emotions I really encourage you to figure out what your relationship is with money. Take the quiz below and find out.