10/29/2014 08:11 EDT | Updated 12/29/2014 05:59 EST

How to Make Peace with Your Financial Situation

Sun star through symbol of Peace.
Sun star through symbol of Peace.

When I look back at all the various stages my finances have been in over the past four years, I see one troubling and recurring theme: I am constantly dissatisfied with whatever situation I'm in. Of course, this made sense when I realized I was maxed out; that was my financial rock-bottom -- the worst situation to be in. But even as I was digging myself out of debt, all I could feel was the weight of the bad situation I'd first put myself in. I couldn't "see" or really celebrate the milestones: $10,000 paid off, $17,000 paid off, $25,000 paid off, etc. Instead, I was always mad at myself for living in denial as long as I did. I was mad at my debt for forcing me to miss out on fun opportunities. And I felt stupid. I was a smart person. Why had I done this to myself?

You'd think that after being debt-free for nearly 18 months I'd be on the totally opposite end of the scale, but I'm not. Sure, I feel happy when I don't owe anyone money on payday and I don't lose sleep over my financial situation anymore, but I often still feel like I'm very slowly chugging along with my savings goals.

When I add up my numbers at the end of each month, I usually look at the amounts I've saved and feel as though I could've done better. I see the current balances of all my investments and wish I hadn't screwed everything up before so I could be further along now. I'll even admit (because it's human nature, whether we like it or not) that I sometimes feel jealous when I read about people who are younger than me that have more money saved than I do. The jealousy swings back to me just being mad at myself again, though, and the cycle of chronic self-punishment continues.

One line in David Cain's newest book, You Are Here, explained these motions perfectly: "Virtually every day of our lives, we're trained to lean towards something we don't have, which essentially trains us to be dissatisfied with where we already are." (Read that two or three times, so it really sinks in.) Based on hundreds of conversations I've had with people about money, I'd say it's probably more common than not for us to wish we were in better financial situations, which makes us hate the ones we're currently in. We want less debt, more savings, larger salaries, bigger bonuses and so on. To some degree, there's nothing wrong with this. We should set new goals and push ourselves to go after them all the time. But I'm finally realizing that it's equally (and maybe even more) important for us to make peace with our current financial situations, before we try to move forward with new goals.

Want to give it a try?

  1. Stop what you're doing and take 10 minutes to add up your numbers. If it helps, draw a line down the middle of a piece of paper, and write down all your debts on one side and any amounts you have in your bank accounts (including all savings and investments) on the other side. Add up your debts, then add up what you have in the bank. This is your financial situation.
  2. Breathe. Take a few deep breaths, if you need to.
  3. Remember all the positive steps you've taken to change your situation, so far. If you're just now coming to grips with the fact that you have debt and you want/need to turn your financial situation around, Step #1 (giving up the denial and adding up the numbers) is a great start. If you're partway through your journey, reflect on some of your efforts to date. And if you're debt-free and now in savings mode, do the same. I have a bad habit of forgetting all the little steps I took to pay down my debt and build up my savings. I cancelled my cable, decreased my restaurant budget, brought lunches to work... and started a yearlong shopping ban! Take stock of every "no spend week" you had, every coffee you made at home and every bill you slashed. You're doing great, so far.
  4. Accept your current financial situation. You know your numbers, and you know which steps you've taken to improve them... and that's all you can do, in this exact moment. This step isn't about coming up with a debt repayment plan, or savings plan or anything like that; it's just about accepting where you are. I'm still learning that success isn't just what you see when you cross the finish line; it's every morning you wake up in a slightly better position than you were in the day before. I may not have the same amount in savings than what's in my personal finance fantasies, but I'm debt-free, I'm saving money every month, I'm learning more about investing each week and I'm watching my net worth grow. This is my current financial situation, and it's ok.

I've pulled so many quotes and thoughts out of David's book, but overall it's a guide about how to live in the present, which is something I don't think we practice in finance often enough. We're constantly working towards goals and thinking about all the steps it'll take for us to accomplish them. However, once in a while, you must stop and make peace with your current financial situation, because that's the one you're in. It is what it is - and that's not meant to sound like tough love, it's just a fact that can't be changed overnight. So, whenever you feel stressed or anxious about your financial goals, take those breaths and just accept where you are. In finally accepting my own financial situation for what it is in this exact moment, I also aim to remove all the guilt from mistakes I made in the past and just move forward from where I am right now. I hope some of you can do the same.