22 Warning Signs Your Relationship With Money Is Toxic and How to Fix It

Are you finding it challenging to save money? Do you often find yourself anxiously checking your account balance or relying on your debit card with a hopeful swipe? Is your budget always stretched thin?

The key to overcoming these financial hurdles lies in strengthening your relationship with money, a journey that starts with understanding the driving forces behind your financial beliefs and behaviors.

Please trust me, you’re not alone. After analyzing surveys and statistics, a research team at MarketWatch Guides determined that only 57% of Americans are financially literate. Over 40% were unfamiliar with money market accounts, high-yield savings accounts, and Roth IRAs. And close to 70% don’t use their 401(k)s, despite having them.

Those statistics are frightening indicators of why so many Americans struggle from paycheck to paycheck. I’m not ignoring individual circumstances or generalizing the entire American population. However, some people would benefit from developing and cultivating a healthy relationship with money.

What Does a Healthy Relationship With Money Look Like?

A healthy money relationship starts when you understand and accept that money is a tool to improve your quality of life and not a goal, status, or stressor. It means knowing exactly how much money you have and how you spend it and spending it doesn’t cause you unnecessary financial hardships.

How Do You Know When Your Relationship With Money Is Toxic?

Numerous signs point to an unhealthy or damaging money relationship. A significant tell is avoiding your finances. From not budgeting your money to spending without caution, here are some of the most common indicators of a problematic relationship with money.

1. You Feel Guilty When You Spend Money

Do you feel guilty after spending money on things like basic needs? Feeling guilty about your spending habits can worsen them. Guilt may prevent you from examining your habits, facing them, and making necessary changes to evolve financially.

Financial avoidance often arises from a clash with our deeply ingrained beliefs about money. These beliefs are universal, as Jodi Coochise, PhD, explains to Fidelity: “We all have core beliefs around money. If our thinking or behavior diverges from those mental models, we may experience feelings of guilt.”

So, if your core beliefs include that you shouldn’t spend money unless it’s on something important and you’re spending frivolously, you’ll likely experience guilt. Accessing your beliefs, shifting your thinking, and becoming more calculated with your spending is important.

2. You Spend Carelessly

Spending carelessly is another sign that you have a toxic relationship with money. When I think back to my serving and bartending years, I wasted so much money having cash in hand.

It was easy to spend carelessly because I worked for tips. My subconscious reasoning was that I would make more tomorrow to justify today’s spending.

This is unhealthy thinking that traps you with a poverty mindset and an empty wallet. It translates to living above your means. Budgeting and tracking expenses is imperative to stop this habit.

3. You Frequently Regret Your Purchases

Do you retreat many of your purchases? Some ways to help are to remove shopping apps from your phone, stop saving card payment information online, unsubscribe to retail and marketing emails, and keep your financial goals at the forefront of your mind.

Setting and working toward financial goals is crucial for economic health. Creating a vision board with your money goals to visually remind you of the bigger picture is another great tool for aiding your success.

4. You Have a Shopping Addiction

Sometimes, poor spending is more than making impulsive purchases. Do you constantly desire to spend, spend, spend? Have you admitted to yourself that you have a compulsive buying disorder (shopping addiction), or do you joke about the reality of being a “shopaholic?”

As a former heroin addict in recovery, I can assure you that addiction is addiction, regardless of joke dismissals or how you spin it. They all come with different life consequences, but they always involve a toxic money relationship.

From gambling, overeating, and drinking to stock trading and fantasy football, there are numerous ways addiction can create an unhealthy relationship with money, but the root issue is the same.

Admitting that you have an addiction is the first step; the next is addressing the problem. Find spending boundaries that work for you, seek professional help, and pray about it to overcome addictions.

5. You Fear Checking Your Bank Account Balances

Are you afraid to check your bank account balances? Do you spend without knowing what’s in your bank account? You know that old swipe quickly and then quietly pray to God that the transaction is approved? This practice translates to never knowing how much money you even have.

You’re not alone, but that’s a terrible behavior that will keep you poor for the rest of your life. You need to track your expenses and create a monthly budget to stop the fear and gain control over your finances.

6. You Speak Negatively About Money

Do you understand the power you hold in your tongue? It’s your most powerful instrument, but saying negative things — only speaks them into existence. Stop talking negatively about money. Avoid vocalizing statements such as “I’m always broke,” “I never have any money,” and “Everything is so expensive.”

As the Bible tells us: “From the fruit of their mouth, a person’s stomach is filled; with the harvest of their lips, they are satisfied. The tongue has the power of life and death, and those who love it will eat its fruit.” — Proverbs 18:20-21 NIV.

This ancient wisdom underscores our words’ profound influence on our lives, including our financial well-being. Instead, speak positive money affirmations over your life and finances.

7. You Spend Money Before You Receive It

Another Hallmark of a poor relationship with money is spending it before it even hits your account. A bigger example of this is probably around tax time. People are expecting a return and they start spending before it shows up.

When I managed a cell phone store, we couldn’t wait for those types of people to come in. They were always eager to sign up for all the add-ons. You should never spend money before you have it; the way to fix that is to set and enforce that money boundary.

8. You Make Minimum Payments on Maxed Out Credit Cards

Or even ones with smaller balances. Paying minimum payments on credit cards is a suckers bet, and the house (credit card company) always wins.

There are two types of people: those who can use credit cards responsibly and those who don’t. I’ve been both in my lifetime, and the latter is a neverending cycle of high-interest debts. Don’t use credit cards if you cannot carry a balance you pay off in full before the bill’s due date.

The credit companies and bureaus love that, but carrying balances with interest is a literal waste of your money, and a high credit utilization ratio (CUR) will negatively impact your score.

9. You Don’t Pay Your Bills on Time

I’m not talking about you not paying something because you simply don’t have the money. How many times have you had to pay a late fee on a bill because you didn’t open your mail, never set up autopay, and have no financial organization holding you accountable, like a basic budget?

10. You Stop Opening Your Bills

Do you refrain from checking the mail or at least not opening your bills? That’s a significant red flag of a bad money relationship. Ignoring bills leads to excessive late fees, penalties, and other possible negatives.

For example, pending state laws, ignoring a toll fee bill may result in a suspended driver’s license, and ignoring a court fee might result in a warrant for your arrest. I understand those are extreme scenarios, but even piling on more money can be regarded as such.

Always open your mail and handle bills accordingly. Avoiding and ignoring them won’t make them disappear, and matters will always worsen.

11. You Don’t Like Talking About Money

Talking about money is important for developing a healthier relationship with it. It allows you to create a budget and plan for the unknown and is crucial for solid communication in a relationship. Not discussing finances with your partner may lead to spending mishaps and arguments.

12. You Refuse to Educate Yourself About Money

But you have no problem blaming a public school system that failed you however many years ago. Take control of your finances by educating yourself about money — now.

Hundreds of books are filled with valuable information to help you budget, earn, spend wisely, invest, and build your retirement. There are many incredible finance blogs with free resources at your fingertips.

Free YouTube videos will walk you through everything from how to write a check to making your first investment. No excuses. Teach yourself, or spend your entire life struggling. The decision is yours.

13. You Repeatedly Fall for Get Rich Quick Financial Scams

If you frequently fall for get-rich-quick schemes and other financial scams, you’re in a toxic relationship with money. Raise your hand if you’ve ever been victimized by multi-level marketing (MLM) copy/paste direct messages filled with emojis and nonsense from people you’ve not seen or spoken to in two decades.

Did you fall for it? Oof. Many years ago, I did so without knowing anything about network marketing, and I quickly learned how absurd the scheme is. According to research at the FTC, 99% of recruited sellers lose money in their MLM ventures.

That means a meager 1% turn a profit. This is a common financial scam that people fall for daily while scrolling their social media feeds, and another reason why educating yourself financially is so important. 

14. You Don’t Set Clear Financial Goals

And work toward them! If you never set money goals, how will you get ahead financially? If you don’t already have an emergency fund, start by making that your first money goal and work toward saving three months worth of expenses.

Once you hit it, celebrate your win, then double it as your next goal. Other money goals to set and achieve include paying off debt and saving for a vacation, home, college funds, and retirement.

15. You Play the Blame Game

Have you fallen into the trap of no accountability? It involves blaming other people or situations for why we never have any money. Do you find blaming circumstances on why you’re unable to save money? Is that true, or have you never committed to making a savings plan and working toward it?

If you’ve never budgeted your money, automated savings deposits, and worked toward financial goals, that’s a real problem. You need to budget life, even factoring in unforeseen expenses.

16. You Resent the Rich

If you resent the rich, you’ll never be rich, and why would you desire to struggle instead? I’m not suggesting you aspire to be the next C. Montgomery Burns type billionaire, but there is a balance.

I want to remind you that your words have power. So, if you walk around vocalizing the generalized belief that rich people are evil, you’re spreading a false ideology while blocking yourself from obtaining wealth.

17. You Act Like You Don’t Desire Wealth for Yourself

Nobody wants to be poor and struggle every day of their life, so why do people pretend that they don’t want the financial freedom and security of a comfortable life, retirement, with something left over to leave their children? Are you one of those people who says you don’t care about money and money doesn’t buy happiness?

Is it a deflection from not taking the responsibility to educate yourself and pull yourself out of your current conditions? Money doesn’t buy happiness, but it gives you financial freedom, and that happiness reduces the immense stress that people who don’t have it face daily.

18. You Lie About Your Finances

I’m not suggesting you walk around telling everyone about your financial business—don’t do that. You shouldn’t be advertising what people might want to take from you. But having real conversations about money and being honest with yourself and your spouse is a sign of a healthy relationship with money.

Lying to yourself feeds back into financial avoidance and behavior like not checking your account balance and swiping on a prayer.

19. You Are Fearful of Money

What does it mean to be afraid of money? There are different fears associated with it, including fear of failure and even fear of success. Some people fear spending, others investing, but as with any fear, facing and overcoming is for your benefit. Educating yourself with financial books, blogs, and podcasts is the quickest way to eliminate that fear.

20. You Compare Financial Situations

It is unhealthy to compare your finances against those of others, but it has never been easier with social media. People do it unintentionally, but the consequences are real.

This behavior can lead to keeping up with the Joneses, a term coined to refer to how people continuously compare themselves to their neighbors and strive to accumulate the same material goods.

More than neighbors, people are in debt, keeping up with celebrities and even influencers. Prioritizing shiny new things over savings, investments, and generational wealth indicates an unhealthy money relationship.

21. You See Nothing But Dollar Signs

If all you care about or ever talk about is money, that’s a problem. There is more to life than money. Certain professions tend to attract these people. They are your friend one day, and the next, you’re a potential customer, and they see you as nothing more than a dollar sign, desperate to monetize every aspect of their life, including your friendship.

If you only want to talk business to make money off your family, friends, coworkers, customer service representatives, and retail workers, your behavior is tacky, inauthentic, and insincere.

22. You See Money as a Status and Not a Tool

One of my favorite money mindset quotes is: “Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.” — Ayn Rand.

Money is a tool that can help us achieve goals. Still, you shouldn’t mistake it as the sole component of your worth or purpose.

Viewing money as status while aspiring to obtain it to inflate that false ideology of needing fancy cars, homes, jewelry, and all life’s bling to be successful or give off that image will financially ruin you. It’s part of why so many professional athletes and musicians go bankrupt maintaining an image instead of their finances.

Fixing Your Relationship With Money

If you identify with some or all of this list — there is hope. Changing your money mindset is the first step in developing a healthy money relationship. Find motivators like money quotes that speak to you and hang them everywhere to reinforce your transition.