I often like to use maps as a way to help people visualize a situation. Even for people who are primarily auditory learners, maps can help you know where to start or stop a conversation or lesson.
Today I’m going to show you how to create and use a Financial Relationship Map. A Financial Relationship Map not only gives you a current snapshot of your financial situation, it also gauges how you feel about your current financial relationships (people you owe and people who owe you money). It’s a powerful tool, especially if you notice financial trends or conflicts you may have previously overlooked. If you’re doing this with a spouse/partner, I suggest each of you create your own Financial Relationship Map.
Get out a sheet of paper. At the top write “My Financial Relationship Map” and date it. Now, draw a circle in the middle of the paper and write “ME” in the middle of that circle. Draw a line from the top middle to where your circle is. Do the same from the bottom middle up. This separates the sheet into 2 parts with your “ME” circle in the middle.
Next, on the left hand side of the sheet of paper, draw a circle for every bill, debt, expense or other payment you’re supposed to pay. It may be helpful to draw a bigger circle to represent the bigger debts or payments you make (such as rent/mortgage, car payment, etc.). You will probably end up with a few big circles and many small ones. Inside each of those circles, write a name, initials or some other code to identify what it is. At the bottom of this side of the paper write “$ I OWE” or something similar.
On the right hand side of the paper, draw a square for every source of income you receive. Don’t worry if you have more circles than squares- it’s completely normal. Many people only have one square to represent the income from their job. Just like you did on the left side of the page- write a name, initials or some other code inside each square so you know what type of income it represents. At the bottom of this side of the paper write “$ I RECEIVE” or something similar.
Once you’ve completed the above steps, you should have something that looks like this:
Next, starting with the left side of the paper, use lines to represent the type of financial relationship you’ve had with each of the circles. If you’ve paid that bill, debt, expense or other payment with no problems over the last 12-24 months- draw a straight line from it to the “ME” circle in the middle. If you usually have no problems paying one of the circle, but have had one or two issues over the last 12-24 months- draw a fairly straight line that is slightly wavy. If on numerous occasions over the last 2 years you’ve had a hard time making the payments represented by one of the circles- draw a wavy line from it to the “ME” circle in the middle. And if you haven’t made a payment or refuse to make a payment because of bad service, disagreement or other issue- draw a jagged line.
Your Financial Relationship Map should now look something like this:
Look closely to each of the circles and each of the lines you drew. Consistently jagged or wavy lines could point to a potential money problem or be a warning sign of an unresolved or escalating financial conflict. If you’re doing this with a spouse/partner, look to see if the lines match or not. You may find out that each of you have a different opinion about how a specific financial relationship is perceived. If most of the lines are different, you may want to discuss each circle, one at a time, to understand why you feel so differently.
Now, draw the same kind of lines (straight, slightly wavy, wavy or jagged) from each of your income squares to the “ME” circle in the middle using the same metrics (always receive, hard to receive, barely receive, never receive) as above. You should now have a Financial Relationship Map that looks similar to this:
Don’t be discouraged by the existence of wavy or jagged lines on your Financial Relationship Map. Even the most frugal and consistent budgeters will experience ups and downs over time. Something as simple as an unexpected medical expense, car repair or other life events can curve a line or two on the map.
The point of building your Financial Relationship Map is to identify potential problems (slightly wavy lines) before they get out of hand as well as recurring financial conflicts (consistently jagged lines) in your financial life. Knowing you don’t always pay a bill, debt or expense on time is one thing- seeing it on your piece of paper gives you a visual representation of the financial issues you face. This information gives you a starting point for internal reflection, fact-finding or, if you’re in a relationship, for financial discussions and planning.
You can use a Financial Relationship Map to identify potential financial conflicts within a business or organization, too.
So what have you learned about your Financial Relationships? Were you surprised by the types of lines drawn from certain circles or squares, or did your Financial Relationship Map turn out how you expected? Please share your results, comments or questions below. If you have a question you’d like to ask privately- please email me at coach AT financialconflictcoach DOT com or send me a private message on Twitter (@MoneyConflicts) and I’ll respond to you as quickly as I can.
Ready to work with me, have questions or want to talk before you make a commitment? Call me at 972-900-6185, email me at coach AT financialconflictcoach DOT com or fill out the Contact Form.