Money - means different things to different people. It implies power for some but security to others, independence for some but a means to an end for the others. Whatever the meaning, the common overriding factor is that our entire lives revolve around it. However, Money is a complicated and highly emotional subject. Not many of us are comfortable talking about it or really understand it. We tend to have a kind of 'insecure' feeling when discussing money.

If you are one of those who feel insecure about your money, you need to get your mindset right. It is important to understand your behaviour and attitude towards money because it can help you:

It is now being increasingly realized that our sub-conscious feelings, beliefs, expectations and attitudes play a very important role in the way we relate to money and how we earn, spend, invest, save and enjoy it to the extent of shaping our financial destiny - Prosperity or Poverty.

The way to a sound financial plan follows three steps:

Let us first explore the psychological perspective of money.

To understand money, you should realise it is like a kaleidoscope. The basic things remain the same but each one of us sees a different picture. Some of these pictures are driven by social constraints while others are driven by more realistic expectations from money. Let's look at some of these pictures or 'perceptions'.

Money is a state of mind

'Wealth' or 'Being Rich' is a state of mind. How much money a person has does not matter. A person with INR 100,000 may feel rich but another person may feel poor even if he has INR 10,000,000.

Money is just a means to an end

One should appreciate that we do not desire money for the sake it. Money by itself is nothing but it is the purchasing power of money, which is important. It helps us convert our dreams and aspirations into reality. It is therefore a means to an end and not the end in itself.

Hence, if you have limited dreams and aspirations, even a lakh of rupees would make you feel 'rich'. On the other hand if one's dreams and aspirations are very high, then even a crore of rupees would fall short thus making a person feel 'poor'.

Money defines our social standing

Our beliefs and attitudes have given a lot more importance to money, which goes beyond its' pure and simple 'purchasing power'. It is seen as the symbol of success, pride, power and social standing.

Money is security

To many of us money signifies security. It's a security against hunger, a security to buy clothing, shelter and other basic necessities in life.

These are of course just a few examples of varied perspectives and this variety is to some extent responsible for lack of proper understanding of money. Money is one subject, which we learn through trial & error and not through a formal training.

These perspectives affect a person's attitude towards money. On one hand we find people who earn well but due to the 'insecure feeling' tend to hoard money rather than spend and enjoy it. They constantly worry about money. They tend to distrust their financial advisors. They find it difficult in taking normal risks due to fear of loss.

On the other hand there are those who spend whatever they earn as if there were no tomorrow. They take aggressive and irrational risks with their money. They, therefore struggle from one pay cheque to another and face problems when they need money in an emergency.

The psychology of money helps us to identify and consciously analyze our illogical financial behaviour. It helps us to understand why we need money and what we ought to do with it.

Once this happens, we start changing the way we react to various financial situations. Our behaviour becomes more rational, logical and judicious. It improves our self-esteem and we become more money-confident.

So the first step would be to list down why you need money and what are the goals you want to achieve with money. That will give you a clearer perspective and help you understand your money needs better.