Financial expert Liz Lajoie wants everyone to be less stressed and more in control of their money. After spending 15 years in the corporate world, she realized that most people have some sort of story around money which may be causing us to ignore credit card statements, file taxes late, blow through budgets, and just feel scared to broach the subject. To help people and small businesses take control of their finances, she started the Zen Money Initiative and is now the author of Zen Money.
She compares getting your financing in order to dieting: When you start taking charge of your finances, it’s tempting to go to extremes. Lajoie sees many people opt for ultra-complex budgeting systems, try to overhaul all money habits in a day, and delve far too deep into financial organizing systems only to “drop out” days or weeks later.
It’s very similar to waking up January 1 and deciding that you’re going to completely overhaul your diet and start with a dramatic detox: It might work for a week, you might even lose a few pounds, but the change is so massive that you’re unlikely to stick to it. “These ultra-strict super-granular budgeting apps may work well for some people, but it’s not one-size-fits-all,” she says. “Maybe you’ll do well for a month or two, but then if you don’t enjoy it, you’ll eventually fall off the budget bandwagon and feel even worse. Then, the emotional stuff around money comes up again.”
It comes down to sustainable change, and sometimes small, digestible steps are best. “Be aware of who you are, and be kind to yourself,” says Lajoie. “If you have a hard time saving, look at your numbers and see what you can reasonably set aside each week, then start that process because you want to take care of your future self. Meet yourself where you are right now.”
Here, Lajoie shares a few of her best tips to help you unravel your money story and get your finances in order.
1. Recognize that everyone has money stress
“Even if people are flush with cash, that doesn't mean they're not stressed out about it,” Lajoie says. “Almost everyone has some kind of stress around money. When I started working in finance and business 15 years ago, I didn't realize how many of us carry so much stress. Then, when I moved into the online space, doing financial consulting, I started working with a lot of people who were solopreneurs, or small business owners who are more creative. It became clear that there was a lot of discomfort around money: These were people who were doing really great work in the world, who wanted to make a huge difference, but had so much stress and fear and discomfort around their finances."
Most of us have the tendency to get stressed about money issues, and then avoid them altogether. Maybe you’ve set up autopay on your credit card to pay the minimum every month, but when was the last time you addressed your balance? Maybe you have a 401K at work, but when was the last time you actually checked on it? “Most people try to take the stress out of money by just avoiding it altogether. But it doesn't really go away,” Lajoie says. “It’s this constant niggling in the back of your brain that’s always there. Imagine what you could do if your brain wasn't tied up in that space. What else could you focus your attention on if the money part wasn't eating up so much of your energy?” If you’re not just balancing a budget with your regular paycheck from your job but you’re also running your own business or working as a freelancer, it’s even more important to pay attention to your finances.
2. Try not to overcomplicate it
“It doesn’t have to be so hard,” says Lajoie. She suggests reframing money as something ordinary, rather than a more philosophical form of stress and meaning. "In reality, money is just a tool, but we turn it into something bigger, into this big monster that we don't want to face, and that can be damaging. Let’s make money feel boring. That’s the start to de-stressing the situation. Make it a tool, not something that carries emotional weight. I wanted to help people understand that no matter where you are financially, you can make money an easy, constant part of your daily conversations, so that you're not carrying that stress.”
3. Be a detective into your own habits
"There's always a little bit of stress when taking on any new habit, but making that initial commitment to actually pay attention to your money is a critical starting point,” says Lajoie. She recommends starting with taking stock: What’s in your accounts, what do you owe, and what are you spending on? Get a basic handle on where your finances are right now and how you naturally spend before you start making a budget. “Just watching that flow [of money] can help a lot of people realize that maybe things aren't as bad as they had built them up to be,” she adds. “It also helps by letting you understand that you have to get in the driver's seat and take control. We tend to think that money is happening to us, when really, we get to decide how we're using it."
Now that you have a better sense of how your money is being spent and where it’s coming from, it’s time to turn inward and consider how you think about money. Are you a natural spender or saver? Lajoie notes that neither of these is a bad character trait when channeled in the right way. “When it comes to figuring out how to use money that’s leftover in your account after your expenses are paid, that can be very emotionally driven,” she says. “My son is a spender: He will save, but he’ll only save in order to spend on something he wants. My daughter, on the other hand, is saver. She squirrels away cash. And so, the conversations I have with my son are very different from the conversations I have with our daughter in terms of maximizing their relationship with money. For my son, it’s about teaching him to live within his budget. For my daughter, it’s teaching her to not be scared of doing things with her money, rather than just hiding it in a piggy bank where it won’t be working for her."
4. Figure out what drives you
“It's important to understand who we are: We can change our habits around money if we’re aware of them, and we understand why we have the habits that we do have,” she says. “Figure out what’s important for you, without attaching any kind of value judgment to it. Does having two years worth of cash on hand make you feel confident? Great. That’s something you can work towards. But on the flip side, I have clients who consciously choose not to keep cash on hand, because if they feel low in cash, it's actually a driver for them to go out and get new clients and get more work, so we make sure that their available cash on hand doesn’t get too high.” (Note that this doesn’t mean spending all of your money on fancy dinners out — just putting the money in places that aren’t easy to access, like directly into a mortgage or retirement account.)
5. Make financial planning fun
While you don’t necessarily have to create a ritual around your weekly or monthly money check-ins, Lajoie says that, especially at first, making your finances feel like part of a soothing ritual can make them seem less daunting. “It can be as special as you want it to be: I know some people who will light candles and put on music, maybe have a glass of wine, when they look through finances. I have a friend who is very conscious about this in her relationship: She and her husband sit down once a month to review their finances to talk about future plans, and they treat it almost like a date night, they get a sitter, they have a glass of wine — they make it a nice ritual.” (Pro tip: If your finances include doing things like sending out invoices or filling out tax documents, maybe hold that glass of wine until the end as your celebration.)
6. Get your partner on board
Obviously, if you’re part of a family, it’s hard to organize your finances on your own. Your partner should be involved, though if he or she isn’t interested, don’t let that stop you from working towards financial order and calm. “Rarely are any of us on exactly the same page with money, and because of that, communication is key,” Lajoie says. “While you don’t have to share every single detail with a spouse if that’s not how you agree to operate, you shouldn’t have money secrets from each other. There’s a fine line between not sharing every detail of your new business with your partner and hiding the fact that you’re already in massive debt.” She also notes that you don’t need to combine your finances to make a healthy family budget: The goal isn’t to have everything perfectly in line, it’s to be open and working towards (roughly) the same goals while both being comfortable with your overall financial picture.
7. Seek professional help — but do the work first
A lot of people may read this article or Lajoie’s book and immediately decide that they need professional help. While a financial advisor can be hugely beneficial, Lajoie recommends starting with some work on your part first. Look at your spending for a few weeks, assess what you have in savings and debt, and make a list of goals and dreams before booking an appointment. “The biggest issue that I see is a lot of people want to just hand their finances off entirely, and not engage with it. But that’s still avoiding money. Being confident with your money management is incredibly liberating. The more you know about where your finances are right now — and how you feel about your money, the easier it is for a financial planner to help you tailor a plan to your specific needs. Everyone’s plan is going to be different: one person’s plan might include a bunch of savings and very limited spending. Somebody else's right financial fit might involve something completely different. And that's OK.”