Nothing can be more depleting than worrying about finances. Transform your relationship with money to revive flagging spirits—and bank accounts.
By Elizabeth Marglin

Can anything make you feel more out of control than watching your nest egg get snatched up in the ravenous jaws of a recession? Amid the gloom, many people feel pressed to reexamine their attitude toward money, along with their financial priorities. Even the fashionistas among us are being forced to don the hair shirt of frugality as layoffs become rampant, bankruptcy commonplace, and fat 401(k)s a quaint memory. But as dire as all this may feel, taking a closer look at how you spend isn’t necessarily a bad thing. “The gift of the recession may be that we can learn to live a richer life with less,” says April Lane Benson, PhD, a psychologist and author of To Buy or Not to Buy (Trumpeter Books, 2008), “and rediscover the nonfinancial assets that make our hearts sing: communion, nature, community, service.”
The first step toward learning to live with less, though, involves understanding why we want more. A rash of recent books examines the emotional or psychological component of money and emphasizes working with our core financial beliefs. “Most of us had a money initiation of some sort when we were between five and seven,” says Spencer Sherman, MBA and author of The Cure for Money Madness (Broadway Books, 2009). “Because the subject was so emotional for the adults, what got transmitted gave us a warped perspective regarding money that continues to guide our behavior.” Delving into the ghosts of allowances past—what Sherman calls your money history—gets at something far beyond merely sticking to a budget.

As someone who’s always been a bit of a Pollyanna about money, preferring to look the other way when it comes to finances and hope for the best, I’m a prime candidate for some self-analysis. When a friend raved about a telecourse she had taken called conscious bookkeeping (consciousbookkeeping.com)—taught by former mind-body therapist Bari Tessler—I jumped at the chance. The bookkeeping part sounded too much like number crunching for my taste, but conscious suggested more of an exploration of wallet and psyche, a mix that intrigued me. I called Tessler and signed up for the nine-session course, curious to delve into my wounded inner comptroller, which was, unbeknownst to me, clutching my purse strings in the fetal position.

Tessler’s approach to developing a conscious relationship to money involves a three-part path: financial therapy, values-based bookkeeping, and what she refers to as life visioning. Financial therapy focuses on the scripts about money that we learned at a very young age from our parents and grandparents. “Understanding what your money story is, whether it be the patterns you adopted or the ones you rebelled against, is the first step to recognition,” she says. “To know where a belief comes from is to also know when that belief no longer serves you.”

Emotional spending
In my case, I grew up resisting saving—which I associated with a tightwad ethic. Money equaled love (on my mother’s side), and saving meant withholding that love (my father’s legacy). Later, I linked saving money with an inability to live in the present. If all we have is the here and now, what’s the use of saving for the future? When I did earn a chunk of change in my twenties, I bought a piece of art rather than invest it in a CD or money market. A mixture of naïveté and idealism formed my delusion that financial proficiency and spiritual authenticity were mutually exclusive.

Having a child—and turning 40—changed all that. Suddenly not having a will, any retirement savings, or a nest egg set aside to cover my son’s potential braces, never mind college, seemed stupid, irresponsible, and short-sighted—the opposite of spiritual. I needed to get my financial house in order, but without feeling deprived. That meant finding a balance between immediate and deferred gratification; abundance and simplicity.

“We fill money with emotions and use it to play out our dramas,” says Susan McCarthy, author of The Value of Money, (Tarcher/Penguin, 2008). “But really money is neutral—just a vehicle to make inquiries.”

Take compulsive shopping for example. For Benson, compulsive shopping––the high of the buy—can be broken by pausing, even mid-checkout line, to ask yourself six key questions: Why am I here? How do I feel? Do I need this? What if I wait? How will I pay for it? Where will I put it? These questions create a needed mindful pause if your shopping tends to be impulsive, as most overshopping is. Look at the internal force that impelled you to shop. Was it entitlement, tension, boredom, insecurity, or jealousy?

Catching your breath
Knowing our money triggers is crucial, but it’s only half the battle. We also have to tackle our current behavior—how we go about our day-to-day transactions. The practical—the bookkeeping aspect—translates understanding into action. Each deposit and withdrawal, charge and check, purchase and return, offers an opportunity to be present and make changes. Applying the discipline of bookkeeping to your personal life involves a basic concept: determining how much you earn each month, what you spend, and where it goes. Now that may sound obvious, but the results can be revelatory, as well as a little freaky. I had never sat down with those stark numbers before. Doing so reminded me of the courage needed to finally get on a scale when you know you have gained weight but aren’t really sure you want to know how much. When I did the final calculations, absolute clarity struck, and a stunning silence reverberated. Each month I spent at least $150 more than I earned, and as a result, I had no savings account, no 401(k), and no college fund for my son. Even though I had no debt yet (I was running through an extra cushion I had earned from some side work), I clearly was headed in that direction. This epiphany of numbers made one thing crystal clear: Something had to give, and it might not be pretty.

Though I felt like I had the wind knocked out of me, I was eager to stay the course. So I made a budget that seemed simultaneously awfully close to deprivation (bye-bye waxing) and strangely liberating. In learning to see spending and saving money as a reflection of values, I could feel the stirrings of a sea change.

Many of the money experts I talked to say simply that money is a mirror. Tessler quotes feminist icon Gloria Steinem to drive the point home, “We can tell our values by looking at our checkbook stubs.” If you died, and the only way anyone could know about you was by tracking your checks, what would they think? That you were a clotheshorse? A massage junkie? A gourmand? A philanthropist? What we do with our money speaks volumes about our priorities. I was ready for my checkbook to show less bling and more bang, less frivolity and more frugality.

Matching funds to purpose
That readiness came from having a better grasp of the big picture. To start tracking spending, a key part of any financial makeover, Tessler led us through creating a budget. But to make the number crunching more playful, Tessler encouraged each of us to personalize our chart of accounts, which she refers to as a “map of intention.” We were asked to rename the conventional categories, such as rent, utilities, gas, so they more accurately reflected what they mean to us. Thus, rent may become “sanctuary for the goddess; gas, “fuel for accessing the world”; and utilities, a “light and energy matrix.” Even taxes could acquire a more positive spin; one person in the course called them “contribution to helping my community run well.” In this light, bookkeeping becomes a surprisingly creative act, a way of naming—and owning—our passions, intentions, and most cherished values. “We will only willingly learn the practical stuff if there’s something fun and meaningful that we get out of it,” says Tessler.

I loved categorizing my accounts in a language I could relate to and seeing what I was—and wasn’t—giving energy to each month. During the second month of the course, a friend of mine was singing in a concert. The tickets cost $20, and even though I was indulging myself in other ways (clothes are my bête noire), I wasn’t big on spending on entertainment. But when I thought of that spending in terms of supporting my connection to my friend, I gladly bought my ticket.

Tracking money mindfully calls for a daily and weekly commitment. Tessler recommends saving all your receipts and then every few days, or at least once a week, entering those expenses into your accounts. She advises thinking of bookkeeping as a sacred ritual or practice, “a way of grounding, taking inventory, checking in, and getting current.” By taking responsibility for our spending, rather than pleading ignorance, we learn the grown-up art of discrimination. As financial advisor Brent Kessel, author of It’s Not About the Money (HarperOne, 2008), points out, “the wanting mind thrives on not being accountable.” Doing our accounts helps us cultivate a sense of enoughness and allows us to observe our wanting, and its consequences, with a cool head.

Who moved my dreams?
So now you save all your receipts and track them in your budget. What more can you possibly do?

Working hand in glove with the budget—your map of intention—Tessler gets you to take your plan a step further by challenging you to ask the big questions: What’s my purpose? What are my dreams? Where am I going?

If anything, a recession like the one we’re in can be a golden opportunity to hunker down and reevaluate our priorities and see them in a new light. “Boom times makes people numb to others’ suffering and their own real joy,” says Kessel. “But now we are opened up, vulnerable, and can really feel our own fear. There’s a sense that we are all in this together, more connected than we imagined, and we have to acknowledge our true interdependence.”

In my own grand vision, my son Jordan plays a starring role. When he gets older, there’s so much I want to teach him about money, lessons that I am only now starting to grasp. About how money is both more and less important than we think. How it helps or hinders our ability to realize our dreams. How it connects us to others and demonstrates that what goes around more often than not comes around.

Even though I am far from financially savvy—let alone secure—I can no longer play dumb. I know there are things I can’t have and don’t really need, things I must wait for, and things worth saving up for. After this course, and spurred on by my watershed birthday, I took a few steps that at least signal maturity. I started, humble allocations notwithstanding, a 401(k). I also created an account for Jordie, which I call his “dharma fund.” I skipped waxing my legs this winter and have made my painful peace with hirsuteness. And finally, because I now save all those annoying receipts, I was able to exchange a belt that had broken a few months after I bought it.

I needed that replacement, believe me—all this belt-tightening can take it out of a girl. I even needed to downsize it, but of course I’m not complaining about that.