What kind of relationship do you have with your money?

Do you hold tight to your money? Strew it around? Stay as far away from it as you can? Fantasize about what it could do for you?

Understanding the nature of your relationship with money can be helpful in making decisions that affect how you plan for your financial future, especially as you think about your retirement savings strategy and retirement income strategy.

As Olivia Mellan, a nationally known “money coach” and author, put it, “We all have a relationship with money similar to our relationship with a person.” When you think of it that way, it can give you a new perspective into your attitudes and behaviors toward money, and how you may be able to improve them.

In fact, I’d like to share with you an exercise called a “money dialogue” that Mellan devised to help people better manage their money. It’s a fun and enlightening way to discover irrationalities that may be blocking you from using money as wisely as you could be.

How to create a money dialogue

This exercise may seem a little far out, but personifying Money and describing your relationship with it can actually produce insights you hadn’t considered before. If you’re game for imagining and writing down your own money dialogue, follow these steps:

1. Imagine you’re having a heart-to-heart conversation with your money. What does he/she/it look like? Like a monster? A kindly uncle? A traffic cop? Something else? Whatever Money looks like to you, picture the two of you talking over cups of coffee. Or to gain a little more distance, imagine you and Money are being interviewed on a talk show. The topic of discussion: How you treat Money.

4. Think about what Money would say about the way you treat it. If you’re a spender, for example, Money might say, “You throw me around; you don’t treat me with respect.” If you’re a hoarder, Money might complain, “You hold me so tight, I can’t breathe!” How would you respond? If Money suggested a way you could treat it better, what would it be?

5. Talk about where you see your relationship with Money going in the future. Do you want to have fun with it in retirement? Do you worry about Money not being around anymore? Have you thought about what will happen to Money after you’re gone?

6. Imagine what your mother would say about your relationship with Money. What would your father say? If neither parent has anything to say, that’s significant too.

7. Imagine the comments of any other powerful influences from your past—a spouse or ex-spouse, a grandparent or godparent, a religious teacher, your best friend—anyone who influenced your relationship with money.

8. Finally, have God, or your Higher Power, or your voice of inner wisdom comment on the dialogue you’ve written.

Your dialogue will help you see how you think and act around money, what influences may have contributed to these beliefs and behaviors, and what steps you might consider taking in order to develop a more balanced relationship with your money, especially as you plan for retirement. By following through on the insights you glean, you may be able to gradually reshape the relationship into one that fulfills your true needs. That, in turn, may help you clarify your financial goals and reach them more quickly and easily.

There are no wrong ways to do a money dialogue—so try writing one and see what it tells you. If you have a partner, write your dialogues separately and then share them with each other. Whatever you come up with will help you become more aware of your attitudes toward money. I think you’ll enjoy this imaginative exercise. Have fun with it!

Your Retirement Reality Sherpa