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Spending money can stem from an emotional place, and even just one month of overspending can put you in financial trouble.

While it’s good to develop conscious, healthy spending habits, the notion of saving money and frugality is dependent on your relationship with money — and how you value where your income goes. 

 talks about emotional spending, and how to build a healthy relationship between you and your money. 

Here are some key moments from the conversation.

The following transcript has been edited for length and clarity. Click the audio player above to listen to the full conversation.

What does a good relationship with money look like?

The best relationships with money are when people are able to use money to achieve their goals. They feel that they are in control of their financial decisions, and they have the resources to cover all of their needs, and also some of their wants. That's pretty much it in a nutshell.

The relationship with money changes all the time. Money represents different things to us at different times. We expect what we buy to do something for us right away and we expect what we saved to do something for us later. Some of us, I think, discount the future too much and some of us don't enjoy the present enough. The key thing is really understanding what's most important to you, developing a philosophy around that, and then creating habits that will help you get to that philosophy.

It is about having enough to meet your goals and being able to make choices around your spending so that you can still save and and meet those goals. I agree it changes all the time with our status, relationship status, parental status. It's not stagnant.

 I am no stranger to impulse buying. In fact, recently, I've been struggling with bringing my phone to bed at night and then thinking: “Oh, that's right, I was going to look up this pair of shoes,” and just scrolling through the retail sites, and wanting much more than what I actually needed. It's really easy to click your phone and buy something, even more than what you had planned to buy. One of the things I have to do is realize I have to charge my phone in the other room and I also take a cooling off period. I take a few deep breaths, try to put my phone down and say: “If I'm still feeling like this in the morning, maybe I can get them, but for now I'm going to delay that.” 

 Money management is like other habits that require a certain degree of self control, like exercise, health and nutrition. It also requires understanding that we all have a certain amount of willpower each day, and as we go through the day, we deplete it. It is important to acknowledge there are the times when we have the least amount of willpower, then we should be working on our decision making, as well as understanding where our weaknesses lie. There are also many tools we can use these days to help support us during those times of weakness, for instance setting up some extra steps before you can get to your money to pay for things instead of it being automatic. 

All of us have done things in the past that we've regretted, like buying things we shouldn’t have, and a lot of us get stuck in what we did. The more we stay there, the less able we are to move on with our life. I've discovered that moving on doesn't mean ignoring what happened, but trying to understand what caused it. If you stay in the past, you're a prisoner to a past decision, and you're never going to change the past.

What can you control when you're thinking about your finances?

: Saving is something that you can always do, hopefully, even if it's a very small amount. You can establish habits that will continue to keep you in financial health. You can use very simple tools like a spending tracker to know exactly where your money is going, so things don't seem so mysterious. You can also begin to say to yourself: “Given what's going on in the economy, what should I be deciding to spend on right now? What should I hold off?” That gives people a greater sense of security and a feeling they're in control of where their money's going. It is a pretty good time for you to get a savings account. Remember whatever the situation is, there are different ways to play to your strengths, keep a calm head and try to be strategic.

 I always like to tell people to set their goals and to think where they want to be in five years. If you've set those goals, and you have a metric for checking in, that can help a lot. If you are trying to save more money or pay down debt, don't check in on a daily basis. Same with retirement accounts; don't look at your balance every day. Look at those smaller numbers and celebrate those little successes. That can help you feel more in control, because you do feel like you're making progress and the choices that you're making are making a difference in your life.

One of the things that it's useful to understand is what control represents. In order to be an investor, you should know volatility is the fee that you have to pay in order to get above cash returns over long periods of time. The reason I say that is because if markets were inherently stable, you wouldn't get a return on them, but because markets are unstable, you have a better chance of getting returns over time. Markets will continue to grow due to inflation, dividends and economic growth and the only control that you have is how you process what you're looking at. Amazingly, savings rates are close to 4 percent, so you could have some money working there. If you want to have a mortgage, you can look at what you're paying down on that mortgage each month, so there you're going to have little wins regardless of what the markets are doing. Sometimes you're going to have big wins if you're an investor and the markets are doing well.

How do you teach kids to save living in an environment with low interest rates?

: One thing I like to use with young people is a calculator that shows this isn't specifically about savings but anything with an interest rate. If you start putting aside money at 18, by the time you are 65, it's always a pretty impressive amount. I would go for the wow factor to start. Secondly, you can build modeling savings into the life you live with your child, pointing out to them like: “Hey, we got to go on this trip, because we saved up for it.” Even doing something very obvious, like having a change jar and going together to the bank and to change out the money. It's always impressive, again, more wow factor. 

: I can tell you an experience I had with my daughter when she was young. When she was about seven or eight years old, I would give her $1 and we could go to the store and get a treat or she could save it. I was slyly trying to teach her about opportunity costs. At first it was really hard, she wanted her treat. I'd even put $1 in here and there just to get her motivated. The more money that was in that jar, the more motivated she got. I think depending on the kid’s age, you have to make it real and tangible so that they can see that money growing and how savings builds over time. 

How to invest long-term money and not worry about retirement?

When you're in your 30s, you've got a long time horizon for which to invest. The best thing that can happen for you in your 30s is for the market to be horrible for the next 25 years, and then suddenly rebound at the time that you need your money. The key thing to remember is, time is your friend. If your 401k doesn't allow government bonds, well a government bond index was down 14 percent last year. Government bonds fall as well. Everything needs to match your time horizon, if it is long, you can accept more risk, if it is short, you need to be in cash for things that are going to pay you a lot for keeping your money safe. 

 One of the things that I hear most often is: “I worry I'm not going to have enough money to retire,” and in this case for people of all ages. If you have a long time, you're gonna be okay, but we should consider the emotional side of it. Many people lost trust in the system and are anxious about being able to actually retire and have enough money to live off of in the future. I don't have a good answer for how to handle that anxiety, outside of really trying to normalize these conversations about finance, and opening up to others and talking about how we're all feeling about it.

The only thing I would add to this great advice already is that it's important to consider risk tolerance that not everybody has to be an aggressive investor. But in order to make those decisions, I think it's a great idea to speak with a financial advisor. Even if you have a retirement program through your work, you can work with someone to help you make decisions and explain what would probably be the safest and most advantageous for this period of your life. You don't have to go it alone.

Listeners called into the show and shared their stories. Here are a few of them.

I'm 66 and a single dad with four kids. When I was 54 or 55, one of my sons and I thought about starting a business. In order to finance it, I'd have to take out a mortgage on my house, which wasn't paid for and maybe use some of my money from my 401k. I worked with two different bankers, two different banks, one in rural Minnesota and one in south Minneapolis. But both of them said at my age it is too risky to start a business. Don't do it, don't mortgage, don't cash in your 401k. I guess what I want to say is you got to trust your banker, you got to listen to him, whether you're 25 or 55. I did take their advice. We still started the business on a smaller level and it has done very well. I'm not retired, don't plan to retire, but I'm enjoying life a little bit more from the help I got from bankers. 

I'm 64 but I had the portfolio of a much younger woman because I take more risks, and I'm comfortable with them. I've been managing my portfolio since 2006 and the more investment decisions I make, decisions come easier. I'm not cocky. Things can happen, it's gonna happen to me and to everyone else too. I remember my first $3,000 loss. Oh my god, I had a three day mope but I got over it. Now I lost $145,000 and that's the way it goes. Those $3,000 stressed me out more than the $145,000. 

“It frustrates me not knowing what to do”

Me and my husband, we're in our mid 30s, late 30s. Currently, we have no college loans, no car payments, just the mortgage payment. Personally, I am a saver, but I'm sitting here wanting to build a new garage and I'd love to get a new bathroom upstairs. I don't want to go and get another loan just for this but I also don't want to not have it. I also want to get rid of the mortgage payment, but interest rates are really low on that, which I understand from the Credit Bureau. It's just really frustrating for me. 

I am very risk averse and right before I retired, I decided to put most of my traditional IRAs -individual retirement account- into a CD. I thought that was a smart thing to do and now I'm realizing when the CD matures, it'll be an incredible income that I'll have to pay taxes on all at one shot. I was hoping there'd be a way I can withdraw the money slowly, just a little bit each year so I'm not paying taxes on a big withdrawal. It is in a retirement account, just a traditional IRA. I wonder if there is something I can do to avoid paying taxes on it.

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Are you having relationship problems with your money? MPR News guest host Chris Farrell talks about healthy spending habits and emotional spending.

MPR News guest host Chris Farrell talks about emotional spending, and how to build a healthy relationship between you and your money.

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