Are you looking forward to April 15th? I now appreciate the process of filing income taxes, but that wasn’t always the case. Tax Day is a mirror for your relationship with money. If you stress, dread, and struggle with facing and completing your taxes, you’re hardly alone, but you’re probably living in thick money fog.
This vagueness and uncertainty can be managed and prevented through simple monthly personal finance routines. If filing taxes is manageable, satisfying, and even empowering, then your relationship with money is strong, grounded, and clear. For many people, taxes are their biggest expense of the year. See if you are a healthy taxpayer or may have a condition called Taxpayer Anxiety Disorder:
Characteristics of a healthy taxpayer
• Maintains a tax savings account
• Has a sense of control, calm and peace of mind while preparing taxes
• Uses an empowering, systematic approach to track personal and business expenses throughout the year
• Experiences a positive, easy and affirming relationship with an accountant based on trust and respect
• Takes time to reflect on what went well with taxes this year and what can be improved upon
• Makes necessary shifts now to set up for success next April
• Receives tax refunds
Characteristics of Taxpayer Anxiety Disorder
• Negative behavior related to tax matters: overspending, overeating, overworking, distraction, deprivation, isolation, dishonesty, imbalance, poor physical health, anxiety, loss of sleep, restlessness, irritability, or loss of appetite during tax season
• Owe back taxes
• Disempowered and uneducated about personal and business tax strategies, deductions and liabilities, a.k.a. “just signs the papers”
• Unexpectedly owe taxes
• Use credit cards, overdraft accounts or lines of credit to pay taxes
• Avoid tax related responsibilities: paperwork, mail or phone calls
• Experience behavioral paralysis and inability to address tax problems in a timely manner
• Having a frightening, threatening or disconnected relationship with an accountant
• Doing the same thing year after year, expecting different results
I didn’t know it at the time, but I had Taxpayer Anxiety Disorder for years. I used to be my CPA’s worst nightmare, not to mention the stress I felt about money that impeded relationships, my physical health, and left me feeling shame, remorse, and malaise. Before getting help from a money coach, I was terribly disorganized with my finances, which contradicted the Type-A tendencies in other areas of my life. I suffered through the tax preparation process by cobbling together somewhat reliable information based on boxes of receipts, scribbled notes in multiple notebooks, and reading bank statements line by line from multiple institutions.
Now, I am my accountant’s dream client. Ever since integrating a few simple financial wellness tools into my personal and business finances, all it takes is a few mouse clicks on the computer to generate exactly what I need. Amazingly, the discipline for staying in control of my money and out of the money fog takes only about 30 minutes a month.
Here are two key practices I adopted:
• To feel consistently confident in your financial life, you must have a personal bookkeeping system. Receiving bank statements by email is not enough. There are innumerable apps, software programs, bookkeepers, and even specialized bank accounts to help you track and analyze your spending, saving and earning. Choose one process and stick with it.
• Work on your mindset too. If you tend towards negative thinking about money, address it with money affirmations, journaling about money, and regular self-care. Such positive, healthy actions can help focus your mind and shift your perspective from survival to stability to affluence. When you’re thinking abundantly about and appreciating your money, you will attract other people who are healthy with their finances, find your way to higher-paying jobs, be able to maintain a cushion in your accounts, and sustain savings.
Healing my relationship with money was the best decision I ever made. Because of it, my life and business improve and expand, year after year.
Carrie Friedberg is a certified money coach and financial behavior specialist. Learn more about her holistic approach to personal finance at SF Money Coach.
Read: 3 last-minute tax breaks that could force early filers to file amended returns with the IRS