Always Avoid Checking Your Bank Account? Here's How To Get Better About It
Have you ever declined a receipt at the ATM just because you didn't want to be reminded of your balance? What about quickly signed the check for a meal so you didn't have to grapple with how pricey it was? You're not alone. Academia even has a name for this tendency to avoid negative financial news: the Ostrich Effect. The idea, first applied to investors, is that this knee-jerk reaction to remain blissfully unaware of our bank balance mimics the way ostriches allegedly stick their heads in the sand to block out danger.
While turning a blind eye every once in a while is probably OK, it shouldn't become a habit—especially if your finances aren't where you want them to be.
"You’re only hurting yourself if you avoid acknowledging your money issues," says Nicole Lapin, a personal finance expert and founder of The Money School. "Burying your head in the sand will get you nowhere, and it could potentially get you into a more difficult financial situation the longer you put off checking your balances."
How can I get over the fear and be more confident about my personal finances?
If forging a healthier relationship with your finances is on your to-do list for the year (as we're betting it is for a lot of people!), the first step is to ask yourself what money means to you in the first place. According to a number of financial planners and therapists, this will require going back in time—like, way back.
"It's easy to say 'just do it,' but it's important to think about why the anxiety is coming up," says financial therapist Megan McCoy. "Did your parents fight about money all the time? Were you really in a poor financial situation?"
Remind yourself that these dated, ingrained beliefs don't have to dictate your current financial experience, and then you can start to move on. Before you remove that head from the sand and start to hold it up high once and for all, Lapin says to ask yourself two more questions: "What do you want out of life? And what money do you need to make that happen?"
And with that baseline, you're ready to follow her three-step plan for becoming less money-avoidant:
1. Start by taking a financial "selfie."
"The first step in any recovery program is to admit you have a problem and look it in the eye," Lapin says. "In order to get your financial life in order, you have to know where you're starting from–this means taking a look at your assets (what you have), your liabilities (what you owe), and your monthly expenses (yes, even those $5 app subscriptions need to be counted!)."
A financial diet is a lot like a regular diet. If you don’t allow yourself indulgences, you’ll end up bingeing.
2. Create a spending plan.
Putting a realistic plan in place will make you feel like a more active player in your financial life. It will also encourage you to keep checking in with your balances to make sure you're sticking to the deal you made with yourself. "Taking these larger financial projects step-by-step will not only remove some of the anxiety and pressure but make you feel good about the progress you're making. Results are the best motivator," Lapin says. She suggests starting with a very basic plan that looks something like this:
- 15 percent of your monthly income should go toward retirement
- 15 percent should go toward extras (AKA vacations, concerts, clothes etc.)
- 70 percent should go toward day-to-day expenses (rent, food, transportation, etc.)
3. Be kind to yourself.
OK, so now you've faced your financial roadblocks head-on and charted your way forward. The only thing left to do is remember that things rarely go exactly according to plan, and that's OK. Allow for some wiggle room, and don't be shy about taking a cue from Marie Kondo and spending that "extras" fund on things that bring you joy.
"A financial diet is a lot like a regular diet. If you don't allow yourself indulgences, you'll end up bingeing," Lapine says. "It's about making changes that are sustainable, and allow the extras that keep you motivated and happy to stick to a plan."
Emma Loewe is the Sustainability and Health Director at mindbodygreen and the author of Return to Nature: The New Science of How Natural Landscapes Restore Us. She is also the co-author of The Spirit Almanac: A Modern Guide To Ancient Self Care, which she wrote alongside Lindsay Kellner.
Emma received her B.A. in Environmental Science & Policy with a specialty in environmental communications from Duke University. In addition to penning over 1,000 mbg articles on topics from the water crisis in California to the rise of urban beekeeping, her work has appeared on Grist, Bloomberg News, Bustle, and Forbes. She's spoken about the intersection of self-care and sustainability on podcasts and live events alongside environmental thought leaders like Marci Zaroff, Gay Browne, and Summer Rayne Oakes.