Shownotes:

Today's episode is covering the top five toxic money habits that I see millennials making. And before I share these habits with you, I want to just begin by saying that if you can relate to any of these habits, topics, behaviors that I'm going to talk through, you are not alone. 

And just because you're currently practicing or relating to one of these habits does not mean that you are bad with money. I'm going to say that again. Just because you're currently practicing one of these habits does not mean that you are bad with money. 

What it means is that you're in a phase where you're focusing on building new and more positive financial habits and behaviors. And really building that solid foundation for your finances and building that financial education for yourself and that process. It can feel really overwhelming when first getting started. 

But the first step is to acknowledge behaviors that you want to let go of so that you can create space for the new positive habits that you want to establish going forward. Again, it does not mean that you're bad with money. And with me saying that, let's go ahead and get into it. 

Toxic Money Habit #1: Being too hard on yourself for past money mistakes

The first negative or toxic money habit that I see people making is hating on yourself or past money mistakes. 

A really great book about this topic is The Psychology of Money by Morgan Housel. I recently finished the book and it has easily become one of my favorite financial help books. My main takeaway from this book is this idea that no one intentionally makes a bad financial decision. We make a decision with our money that's based on the information available to us at the time about that financial decision. 

There's a lot of factors that go into that, right?

Since financial education isn’t really taught in schools to begin with, a lot of young adults either don't have a ton of information to begin with, or don’t know how to effectively process said information. Additionally, many factors such as life experiences, our current circumstances, and of course the state of the economy in general also play a part in making a financial decision.  

Also, people don’t really make a decision thinking, 

“Oh, this is going to be a huge mistake that I'm going to regret in a few years. Haha sorry, future me”.  

People just don't do that. 

As a result,  it's really important to remember that the decision felt like the best option for you at the time. And if it ended up being a mistake,  it's not beneficial in today's time to hold on to guilt, anger and resentment for that decision that was made in the past right because again, you made the best decision that felt best for you at the time. 

And you also can't change the past.

 But what you can do instead is start taking aligned action to get to where you would like to be in the future. And when reflecting on past financial mistakes with my clients. Some questions that I sort of walk them through are the following: 

• What did you learn from this mistake? Like what are some primary takeaways, and how can you apply this information going forward? 

• Are there any positive outcomes that did come from that mistake? Is there anything that you can be thankful for, in addition to what you might have learned? 

A really common scenario here is student loans. Student loans represent something that a lot of millennials are going through, and we frequently end up feeling a lot of frustration and resentment towards these student loans. 

My degrees are in music education and vocal performance, but even though I am running a financial literacy business today, that doesn’t mean that I regret my student loans.

Are they stressful? They sometimes have been.

But ultimately, I learned so much going through my undergraduate degree, even if I'm no longer pursuing a career as a performer or as a music educator. 

I had huge lessons that came through my undergrad. I also made lifelong friends. I had some amazing experiences. I got to study abroad in Italy, in China, I got to do some awesome things. 

But also what I learned going forward is to really think about what is my future self going to appreciate when taking on a loan, right like or not necessarily appreciate or feel comfortable with when it comes to a future loan payment? Am I going to be comfortable paying off alone for X number of years? And that's just a question that a lot of 17 1819 year olds are not prepared to answer. 

So it took a lot for me to forgive my 18 year old self for the student loans that I took on at that time. But I ultimately had to say it is okay. All I can do is start focusing on what I can do going forward. 

And remember that whatever financial situation that you're in right now, based on a past financial mistake that you might have made, it probably won't happen overnight for you to get out of that mistake, right. 

A lot of times people don't get into this financial situation that they're in currently within a day or night or whatever, and it'll likely take some time to see that progress going forward, which is totally normal and Okay, personal finance is a lifelong journey. 

Moral of the story: don't hold on to that guilt, anger and frustration from past financial mistakes. I know it's easier said than done, but focus instead on the positive and aligned action that you can take going forward. 

Toxic Money Habit #2: Comparing your financial success to that of others

With social media applications such as Instagram, Tik Tok, and LinkedIn, we are constantly surrounded by posts of other people’s success. Whenever I'm on LinkedIn, for example,I see countless posts about promotions, new jobs, and great stories of financial success.

Of course, these achievements are awesome, and I want to congratulate these people. But at the same time, these posts can cause this feeling of insecurity in me. I start to think, 

“Oh my gosh, they're doing such amazing things. I have to keep up with them.” 

But at the end of the day, you have no idea what the context is behind the experiences or things that people are buying. 

As a financial counselor, I've worked with multiple people who made multiple six figure salaries a year that are living totally paycheck to paycheck. 

And the bottom line is that you don't know what's happening behind the scenes of someone's financial picture. If someone goes on a luxurious vacation or they buy a new luxurious item or whatever, they could have bought that and been really, really comfortable with that purchase. That's amazing for them and we can celebrate that. It also might have been funded with debt.

The important thing to think about and takeaway here is that when you compare your financial success to others when you don't even really know what their financial “success” might look like. 

Because again, financial success is a very subjective word, and it’s going to look wildly different for different people. 

It is just not beneficial to live life comparing yourself to others. 

I know that it’s easier said than done, but thinking about how you can grow and take steps that are aligned with your values is the most important thing. 

Toxic Money Habit #3: Spending all of your income

A lot of times this toxic money habit is fueled by Toxic Money Habit #2, the tendency to compare your financial success to that of someone else. 

When someone finds out that they're spending all of their income it can happen for a couple of reasons. However, one of the main reasons is having this fear of really checking in with where their financial situation currently is.

And I know that getting your finances in order and checking all those numbers can be scary. 

A lot of times this spending comes down to a fear of checking in, and basically an avoidant behavior. Basically we ignore the problem and pretend like it’s not there. We tell ourselves that we will worry about it at a different time. 

Then when we don't know where we are starting out or what our money is doing, it is so easy to spend the entirety of our income for instant gratification. It is hard to build up the habit of saving money and thinking about setting this financial foundation for your future self as well. 

But if you find that you're spending all of your income, what I would definitely recommend doing is going through and doing a 30 day spending audit and seeing where all of your money is going and finding ways that you can make modifications to have your spending be more aligned with your core values. 

Toxic Money Habit #4: Emotional Spending 

Sometimes when we’re feeling big emotions, the only thing that seems like it will help is to make some kind of big purchase.

One thing that I want to kind of call out here is society's glamorization of shopping as a form of self care. 

You'll hear me say this all the time that it is absolutely okay to treat yourself. 

It's totally fine to go to Starbucks or Target or wherever to treat yourself, as long as what you’re spending is in your budget and it’s aligned with your values and the things that are important to you. 

But where this starts to get a little tricky is when treating yourself becomes a fallback, excuse or justification for spending in a way that ultimately is going to make you feel stressed or guilty after swiping your card.

I'll say this again and again. 

It is okay to spend money like that. 

I'm not saying that you should never spend your money on things. It is okay to spend money. Money is meant to be spent. But when you do spend, you want to make sure that it's in a way that's in alignment with your values, goals and financial situations so that you feel good about the purchase. 

That's when spending becomes a true form of self care, and not something where you want it to be self care.. but then you swipe your card and you feel worse than you did before making that purchase. 

So if you find that you emotionally spend frequently, the first thing to do is figure out what your spending triggers are. 

Some common spending triggers are stress, fatigue, fear of missing out, or also the fear of missing out on a good deal (like when there are some really big sales going on and you don’t want to miss it). 

Once you know what that spending trigger is, you will be able to take some preventative measures to prevent emotional spending. 

When it comes to emotional or impulsive spending, I have three questions that I ask myself to determine if  this is a purchase that I really want right now. 

How do I want this purchase to make me feel, and will it actually do that for me? 

If you want this purchase to make you feel happier or more confident or whatever, will that purchase actually make you feel that way after you swipe your card? 

This situation kind of happened when I would go to Ulta and buy a bunch of makeup on the weekends, which I did like every weekend, and I used to have a ton of makeup. Ask anyone that I went to college with and the reason why I would buy so much makeup is because I was in a really not great place and I was very self conscious. 

I was feeling very down and stressed and I would go shopping for makeup as a way to make myself feel better. But as soon as I would swipe the card I would end up feeling worse than I did and before making the purchase because then I would think about if I really had the money in my account to afford that item.

Is this purchase in alignment with my financial goals? 

In other words, have you created space in your budget or your spending plan to be able to make this purchase comfortably? 

This goes back to this idea that we talked about at the beginning of this point: it is totally okay to spend money on yourself as long as it fits into your budget and you feel good about the purchase. 

We don't want to have guilt associated with spending, because that's not positive, just like we talked about at the beginning. That's not a positive way to feel when it comes to spending money in general.

Do I need this thing right now? Or can it wait a couple days, weeks, months or whatever? 

How urgent is this purchase? And then once you've kind of walked through those three questions, then you're able to start filtering down like is this something that I want to buy today? Or can it wait? 

And after asking myself these questions with my spending, I have seen just such a dramatic change in my spending overall.

And now when I do spend, I've been able to cut back on impulsive spending in general. 

And when I do spend, I'm able to do it in a way that feels so aligned with my values. 

It's basically completely taken away the guilt that I feel whenever I'm spending money. Which again, we're going to have to spend money during our life. Money is also a tool to live a life in alignment with our values, but you're going to have to spend money along the way. So it's important to make sure that emotional spending and impulsive spending doesn't get in the way and create an experience where you feel guilty whenever you spend. 

Toxic Money Habit #5: Not Talking about Money

This toxic money habit is actually one of the big reasons why I wanted to start this podcast. In our society, we are socialized to believe that money is a very taboo topic to talk about. 

And I believe that this is even more heightened with women. 

And because it's such a taboo topic, we don't talk about it.

When we don't talk about money, it ultimately puts us in a more disadvantaged situation because it limits the amount of information that is available for us to learn from–and that can pretty much cycle into all of the negative habits that we've talked about so far. 

If someone doesn't have adequate information to make really confident and empowered financial decisions, that can lead to future financial mistakes. It can also lead to comparing your financial success to others because you don't know what other people's situations look like. 

You don't have any information to use as a reference point. This can lead you to spending above your income because you are in this like keeping up with the Jones’s mentality.  Again, I think that women are even more socialized to think that money is a taboo thing to talk about. 

Whereas I do truly feel that men are often encouraged to share ideas and insights about their investments and careers more than women are. 

An example that I had recently and posted on Instagram happened after going to 3 weddings last summer. It kind of cracks me up because at every single one of them, my boyfriend could very quickly find a random group of men that were total strangers before the wedding, but they later huddled together and ended up in these conversations about their finances, their investments, cryptocurrencies. All of these things. 

And I would ask each time,  how do you all know each other? And they would say, oh, we just met. And I think that really is a great example of how differently men and women are brought up to think and talk about money. 

What can talking about money help you with?

It can help you learn new budgeting tools. It can help you determine if you're being compensated fairly at your position, which is huge. You want to make sure that you are being compensated in a way that is equitable to the other people and at your field that have the same level of qualifications, work experience and education. You also can have support and encouragement from friends and family on your financial journey while also supporting them on their own financial journeys. 

Additionally, if you're in a partnership, it is so important to talk about finances together. Money is a tool to live in alignment with your values. It's so important to make sure that you and your partner are on the same page financially so that you can both be working towards living in alignment with your values together. And there's going to be another episode that's totally devoted to this topic in a couple of weeks. 

So, keep an eye out, and make sure that you have notifications on for this podcast and that you are subscribed.

Finally, when we talk about money, we're able to destigmatize the topic of personal finances and that's huge for me and again, like the big reason why I started this podcast is because knowledge is power. 

And when you have solid information and knowledge to work from, that's when you're able to make aligned empowered and motivated decisions for your finances. And see the positive effect that those decisions have on your life. So those are my five toxic habits and I see millennials making. They were hating on their past self for past money mistakes, comparing their financial successes to others, spending all of their income, emotional or impulsive spending, andnot talking about money. 

FINAL THOUGHTS

So that is a wrap on those toxic money habits!

Remember, if you can relate to any of those topics, you are not alone. 

Just because you're currently practicing one of these habits does not mean that you're bad with money again, it can feel overwhelming when first getting started. But the first step is to acknowledge the habits that you have currently, so that you can focus on letting them go and building more positive habits and behaviors going forward. 

As always, I can't wait to see the progress that you make with your finances. 

Let me know if there are any points that really resonated with you today. Send me a message on Instagram. 

I love hearing from you and I can't wait to chat in our next episode. Before you go. I have a huge favor to ask if you're enjoying listening to this podcast as much as I love making it. Please take a couple of minutes to leave a positive review!

It can be tough to break toxic money habits, but one of the first steps is to acknowledge the habit so you can create space for building new, positive habits instead. In this episode, I'm sharing five toxic money habits that I see among millennials and steps you can take to let go of that habit this year.

This post contains affiliate links that, at no additional cost to you, I may earn a small commission.

The Psychology of Money by Morgan Housel

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Music written by Chris Glassman.

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