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Debt is usually a symptom of a core issue rooted in your psychology and money management skill-set. Examples of core issues are: under-earning, impulse-spending, living in a money fog, not being able to save money, and not being on the same financial page with your partner.


Go Macro

Go Macro means, get down to the finest details of where you spend your money, what you spend it on, why you spend on what you do and compare that to how much money is coming into your checking account each month. This in itself is an eye-opening exercise. To help you get to this macro level, you might want t purchase the MoneyMinder on the Financial Tools Blog.

Uncover Financial Genetics and Psychological Blind-spots

Examine your financial genetics, your psychology! Often, we live in behavioral blind-spots and this gets us into real trouble. Your early money training may be ruling your money habits. If you feel that money is controlling you rather than you controlling your money, this is a tell tale sign you are living in a blind-spot.

Examine behaviors that keep you in debt. Examples of debt behaviors are ways you think, feel and act to support staying in debt and growing your debt. Here are some examples of psychology and debt behaviors: (1) using your credit card to purchase what you know you can’t afford and what will become a revolving balance on your account (2) telling yourself you deserve things, you work hard and you should have what you want (3) that you “can’t take your money with you when you die” (4) that saving money isn’t important because you are going to work until you die.

Identify Your True Needs

We all share four psychological needs besides the physiological need of survival. Those four psychological needs are: love and belonging, fun, freedom and power or influence in our lives. Ask yourself what psychological needs (which are internal self-esteem needs really) you are financing with your money. This is important because you will need to learn to finance these needs in a different way, with different skills rather than with your money. The reason is, money doesn’t fill the need, it only grows the “emptiness” you feel inside and empties your bank account at the same time…so you then are growing a bigger emotional and financial hole.

End Dependency Behaviors With Your Card

You have a relationship with your credit card whether you realize it or not. Most likely, your card(s) have been there for you in times of low cash flow. They’ve been your back-up in tight situations, maybe they’ve saved you from embarrassment when you’ve been out with your friends. They allowed you to live beyond your means and actually have given you the illusion that you have more to spend than you do. They’ve allowed you to purchase your wants regardless of the amount of money in your checking account.

If you think you don’t have dependency issues with your credit card, then take all of them out of your wallet and observe how you feel. See if you can live life one day at a time without your cards.

As a final thought, mind your psychology and debt behaviors and be willing to do the footwork to regain basic freedoms in your life.

Categories: Psychology and Money | 1 COMMENT