Do you know anyone that is totally comfortable with their relationship with money? Talking about money is a social taboo. And we often avoid looking at our financial issues when we are by ourselves. Money is our culture's most loaded concept. Many people are more comfortable talking about their sex lives than their financial issues. Wealthy, poor or making ends meet, rarely is anyone satisfied with their financial position. 

Becoming empowered in your relationship with money requires both inner work, like clarifying values and goals, and outer work, like establishing a financial plan and investment or savings options. This article is designed to explore both the psychological and practical aspects of money management. 

The Meaning of Money 

Objectively, money is a concept and a resource. 

Money is an abstraction, a symbol—"just a piece of paper. " In some cultures it is rice, metal or other substances which equate to value and meaning. In and of itself, money has no meaning. 

Money is a medium of exchange—a standard or common denominator when exchanging goods or services. We perform services or sell goods and in exchange we are given money. 

Money is energy—a fundamental resource. It can be used as a tool to help us get where we need to go. It needs to be channeled and invested. Because it is energy, when left to its natural rhythm, money flows. Because we have assigned so much cultural meaning to money, it takes on a life of its own. 

Money Is a Mirror 

Psychologically, money is a mirror. We have projected onto it our most inner desires, our deepest fears and the elusive things we hunger for. Some of the qualities we have projected onto money include: 

Money is power. It carries with it the ability to influence other people. How people hold and use their power varies. For some, having money means "I am better than you." Others choose to use money as a way to do good works in the world. 

Money is safety and security. It enables people to meet their basic needs for survival: food, shelter and protection. Our mainstream, corporate culture presents other "necessities" which require money: to play in this social sphere you need a car, computer and education. 

Money separates people. Throughout civilization people have differentiated between the "haves" and the "have nots," the upper class and the lower class. Money can cause rifts in families and throw long-standing friendships into question when one friend greatly changes his/her financial position. 

Money is all the things we want in our heart of hearts. Some of them are elusive: "money is freedom," "money is happiness," "money can bring peace of mind," and "money is love." 

Money is a responsibility. For some, this responsibility is a burden. Managing money takes a lot of time and energy. 

Money is opportunity. It is an enabler. It opens doors. For some, money is freedom. Money is acknowledgment—reward for one's labors. In theory it says you are making a contribution to society. It is society's way of recognizing the individual's contribution. 

Money is an obsession. Some can never have enough. They are driven to acquire more and more out of fear of losing it all and becoming poor like parents in the Great Depression. When we forget that money is a projection screen and not a guaranteed path to inner peace, we are in danger of chasing a "false god." People become addicted to the pursuit of money. This pursuit can break up marriages, wear down health, and still never end. All the money in the world can't fill the void people feel inside. In essence it is a spiritual void. 

Overall, the issue of money is complex. Rarely do people say that "money is fun." If money is indeed a mirror for our culture and the times we live in, the charge around money brings a strong message. Today many of us are alienated from our deepest values and from other people. More and more people are asking "what is the point of it all?" We work longer hours and yet have less time to enjoy the fruits of our labors. Many people who "have it all" by society's standards find that having gotten there, there is no "there" there. 

How Much is Enough? 

The key issue with money is not how much you have, but how you relate to what you have. Some of the happiest and in some ways "richest" individuals do not have the highest salaries or the largest quantities of money. They are people who use their money in ways that follow their values, are able to save toward future goals, and who do not need to be validated by the quantity achieved but rather by the quality of it's use. Getting caught in a cycle of "I never have enough" creates a trap that impedes the essence of life.

I like to answer the question "how much is enough" by saying "whatever I need to do the things I really care about." The answer is different for each person. If you have children, it is different than if you are childless. If you enjoy living a fairly private life in the country, it is different than if your sense of purpose takes you traveling around the world. At different times in our lives, we may find different answers to this question. 

In trying to answer this question, it is important that we look to our hearts as well as our minds. What we think we want may not be what we really want or actually need. Learning to become honest with oneself takes time and courage. Some steps you might want to take help you answer this question include:

Giving yourself permission to have what you REALLY want. Many of us suffer from a lack of entitlement. We do not ever let ourselves consider what we REALLY want for fear that we can't have it, don't deserve it, aren't worthy of it or would be bad or greedy to want and have it. Unless we have experience being validated for what we want is hard to validate ourselves. The danger here is that if we never let ourselves consider what we really want, we will waste our resources and energy. There's a saying, "you can't get enough of what you don't really want." We can only be happy if we learn to be kind to ourselves. 

Letting go of old baggage. This goes hand in hand with giving yourself permission to have what you really want. Once you are clear about what you want, you can get rid of old things you don't need and make space for the new. These exercises quickly move beyond money and material possessions to other aspects of life we want or need to let go of. As you start cleaning out your closet, you might find yourself examining the quality of your hobbies, your friendships, and the ways you spend your time. You may find yourself exploring how you live and how you take care of yourself. Your entire life may feel lighter as you let go of all parts that no longer serve you. 

Living simply. Whether this means a meager or an elegant lifestyle, one can still live simply. Articulating your values and then basing your actions on them helps simplify your life. If you are not a particularly materialistic person, you may find your greatest joy in nature. If you love beautiful possessions, you may find yourself choosing a few special pieces rather than having lots of mediocre ones. Find things that will stand the test of time—make possessions high quality and lovable. Hoarding comes from fear of not having enough, and this puts us in an unbalanced state. It doesn't serve us or others. Nature provides enough for all its children. If we think this way and take just what we need then it will be true.

Staying grounded. After defining what you truly want and need, keep a journal of what money goes in and out. Are the things you are spending your money on consistent with your values and goals? If not, make adjustments in your behavior. How much money do you really need to do the things you really want to do? Your journal will give you the date you need to answer this question. As you add up the different expenses, you will learn exactly what it costs to be you. Some expenses may be reducible. 0thers may be fixed. How does your income relate to your outgo? Is there any money you are putting aside for the future through savings? How are you balancing today's needs with tomorrow's? These are all questions that will help you be more grounded with money. 

Making Money Work For You 

A financial plan is a plan to organize and invest your resources to take you where you want to go, whether that is comfortable retirement, a new career doing work you love, buying your dream house, sending children to college, making a charitable gift to an organization or leaving an inheritance. The first steps to developing a financial plan are to define your souls and take stock of your resources. Most of the hard questions are not mathematical problems but questions of philosophy, values and strategy. 

For instance, how to balance having a career and raising a family is certainly not a question of dollars. No matter how much money you have, this balance can be problematical. But an accurate assessment of your resources can help you make an informed decision about how much you need to work and how much to stay at home raising a child. Likewise, taking stock of your resources will en- able you to know what it would mean in dollars and cents to change careers, move to a new city or even leave a relationship. There are no right answers. 

A professional financial planner can help you undertake this task, working to develop a plan that will allow you to realize your goals and affirm your values. This process may also help you confront unrealistic expectations about how far your resources will carry you. 

Defining Your Goals 

If you could create your life the way you really wanted it, what would be your financial goals? You can think of things you want in the short-term (6-12 months such as purchasing a new computer), medium term (2 - 5 years such as buying a house or financing kids' education) and the long term (like retirement and estate planning), and make a list of each. You can then estimate how much money YOU will need to achieve each of your goals. For example, a new computer requires $2500, purchasing a house will cost $200,000 and requires a 20% down payment and to retire on an income of $50,000/year requires $1,000,000 of capital invested. 

Setting goals is a very personal process based on your values and interests. Do you wish to live simply and at a slower pace than our mainstream culture requires? Do you want to help preserve the earth's resources for future generations and only consume what you really need? If your answer is yes to either of these questions, the amount of money you need will be smaller than if you aspire to the 1997 [2001] version of the American dream: a new car, a big house, fancy vacations, and designer clothes. If you have a passion for a hobby like sailing or skiing, you will need more money than if your passion is to take walks in the woods and draw pictures of trees or write poetry. 

Are you a person who wants to work hard for a while to have more time and freedom in the future? Are you a person who wants to live moment to moment, and not over focus on twenty years from now? Are you a single parent wanting to provide the highest quality of life possible for your children and wondering how to trade off time with your children and material things? Do you believe the best "insurance" is the way you take care of yourself, body, mind, and spirit over time?

What feels most important in setting your goals is knowing what really matters to you. We can starve ourselves emotionally, spiritually and materially no matter how much money we accrue. Likewise, we can nourish ourselves in those same ways if we can really listen to our hearts and let the amount of money we pursue follow from our truest desires. 

Taking An Inventory of Your Assets and Liabilities 

Having set your goals, you need to take a close look at your current financial situation. Are you a saver, a spender or some of each? Have you been putting aside money for the future in the form of savings, investments, real estate, a pension plan, life insurance or a will? Do you need to pay-off past debts in order to pursue current and future goals? This inventory may also suggest changes in spending and saving habits in order to give you the money you need to invest toward your goals.

Regardless of your income, you can plan. Everyone should try to save money that can be tapped for emergencies. Two months salary is generally recommended for this purpose. Check into retirement or savings plans at work (which can lower your taxable income) or set up a self-employment savings plan for yourself. 

Paying off credit card debt with high interest payments is also a priority. It is hard to get a 16 to 20% return on your money, and that is often what credit cards charge you for your unpaid balance. Once you have some basic financial planning in place, you can begin to look at investment portfolio options. 

Tools That Can Help Your Money Grow 

There are conventional investment vehicles you can choose to put in your portfolio, including stocks, bonds, and mutual funds. You may also own real estate, precious metals, art and other collectibles. Most people have to save a part of their earnings on a regular basis to build this portfolio. It's important to remember, the higher the potential return, the greater the risk. 

One of the most important tools for building your portfolio is regular savings. The earlier you start saving, the more time your money has to grow and the more time you have to build your net worth. If you enjoy reading up on investing and are willing to take responsibility for managing your funds, you can educate yourself to decide what belongs in your portfolio. Even if you decide to manage your investments, you may wish to consult a financial planner, to help devise a strategy for the portfolio and to evaluate individual companies or funds. For those who find investing too detailed or too scary, a financial professional can work with you to build a portfolio that meets your financial goals. 

Unconventional Investments 

In addition to building the kind of investment portfolio we've just described, investment can also take on a less conventional flavor. You may choose to invest in yourself. This can include massages, yoga classes, healthy foods, psychotherapy, acupuncture and personal growth workshops. By using a percentage of your funds for self-care, your might hope to realize the long-term returns of better health, deeper self-knowledge and inner peace.

Investing in yourself might also include letting yourself pursue something you feel real passion for but can easily put on the back burner because it isn't a necessity. For example, if you love beautiful craftwork you may choose to allocate money to purchase one or two beautiful pieces each year. If you love cooking, you might choose to invest in a really good set of pans to cook with. 

Other unconventional investments might include putting your money into causes or small businesses that are doing things you believe in. You may choose to investment in solar power or wind power or support sustainable agriculture. You may choose to become a shareholder in a small business that makes ecologically sound products. You may or may not expect to get a financial return from these kinds of investments; however, the investment will be the empowerment of using your money to create a better society for everyone. 

Still another unconventional investment is creating your own business. You may wish to pursue a great idea, work at home so you're with your children, get rich or live simply and reduce your dependence on the corporate lifestyle. You may need to invest time and start-up money into your business, and have enough savings to carry you through the first couple years of start-up. 

Socially Responsible Investing 

Socially responsible investing has become popular for people who are concerned as much about the companies in which they are investing and what they are doing as the financial return they are getting from their investments. Socially responsible investing screens out companies that have practices you don't want to support or don't approve of. You may not want to invest in companies that manufacture tobacco products or weapons, that discriminate or pollute the environment. Or you may seek out companies that produce products that improve our society. 

It is the belief in the social investment community that there is a double bottom line. If a company has practices that cause harm, then it will have liabilities that will hurt its profits through litigation or legislation. If a company mistreats its employees, then it will eventually lose their loyalty and productivity levels will fall. Just as with investing in general, you should be able to receive a competitive return if you implement a professional investment strategy. 

Insurance 

When people hear the word "insurance" what comes to mind are associations such as "fine print," "can't trust" or "don't understand." Why do we have such negative connotations about something that is actually simple and potentially useful? 

Most simply, insurance means protection against loss. Some kinds of insurance are mandatory. When we buy a new car, we cannot even drive it out of the showroom without a certificate of automobile insurance. We buy our first house and we must purchase an umbrella protection insurance policy to indemnify us against loss due to theft, burglary, and other people's injuries while they are visiting. Other kinds of insurance offer financial protection for us and our families. Health insurance can help prevent catastrophic monetary loss due to personal sickness or injury. And life insurance is designed to keep our families together if we die. In the insurance business there are two sayings: "the premium isn't the problem—the problem is the problem" and "people don't plan to fail—they just fail to plan." Insurance can be seen as an investment to protect your goals. When you insure your goals, then they can be accomplished even if you are sick and unable to work or if you have died and are no longer here to see the end of your dreams. 

Creating a Conscious Relationship With Money 

Our goal in writing this article is to provide you with some basic tools—inner and outer—to help you build a conscious relationship with money. Unless you are already financially independent, you trade off your time and life energy in order to acquire money. Having an understanding of what money means to you is critical in determining how to make money work for you so that you can direct your energy into making sound investments to support you in meeting your personal goals. 

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Steve Fakrer is an Investment Consultant for Progressive Asset Management, a socially responsible investment firm. As well as financial planning and portfolio management, he has a background in charitable planned giving. Phone: 800-659-8189. 

Barry Goldwater is an Insurance Broker specializing-in group benefits, individual and business insurance: 617-232-6775. 

Linda Marks, MSM, has practiced heart-centered, psychospiritual body-centered psychotherapy for sixteen years.  She is founder of the Institute for Emotional-Kinesthetic Psychotherapy in Newton, and author of LIVING WITH VISION: RECLAIMING THE POWER OF THE HEART (Knowledge Systems, 1988).  She has taught and spoken nationally and internationally, and has been a leader in the emerging field of somatic psychology.  She lives in Newton, MA with her four year old son, Alexander.  Linda's new book EMBODYING THE SOUL: DANCING INTO LIFE is due for release in the spring of 2001.  You can contact her at (617)965-7846 or LSMHEART@aol.com