Five tips to start your journey toward feeling good about money.
People who say that they are not good with money usually have some of the same things going on. They have debt. They live paycheck to paycheck. They don’t have any savings. They are pretty much depressed about their situation and carry feelings of shame and guilt. They prefer to not look at their bank and credit card statements. They are numb.
What can be done? To be good with money you have to be ready for a life change. You must get rid of the habits that make you feel bad about your finances and adopt new ones that will take you where you want to be.
Bottom line. Take charge of your life and your finances. No more feeling sorry for yourself.
By adopting healthy money habits, you are saying yes to more money, less stress and anxiety, and higher life satisfaction.
There are many things you can do to improve your financial well-being. Let’s start with five.
- Only carry debt if other people are paying for it
Consumer debt is the dream killer. It takes a long time to pay off and you end up resenting what you purchased. Debt is one of the greatest causes of stress in households along with work. If you had no debt, you could quit the job you hate while you look for another one.
By carrying debt that other people are paying for we are talking about Assets. Real Estate Rentals. Motor home rentals. House Hacking. Not all debt is bad.
2. Have a fully funded emergency fund
Do you want to feel free? Your emergency fund’s purpose is to bring you peace.
Knowing that you have this cushion makes you feel braver in life. You take more risks knowing that if you fail you have something to fall back on for a few months.
3. Pay yourself first
Invest in yourself. Take the class. Buy the book. Hire the coach. Designate a number that you will invest monthly or yearly. Allocate this money every month or at the beginning of the year. If you are waiting to invest in something specific then put this money in a High Yield Savings account.
After you pay yourself first, focus on your other expenses. If you feel that you are coming up short after you pay yourself, then look over your expenses and see if all your spending aligns with your values. If you can’t or don’t want to make cuts, focus on increasing your income. Some ways you can do this are by using credit cards that give cash back, getting a higher paying job, being more strategic with your taxes, or having another source of income.
4. Have a system in place for how you track your spending, income and investments
for your household.
Every home needs multiple systems. Systems for keeping it clean and organized and systems to pay bills on time each month.
In addition to these there needs to be a system in place where you feel in control of your money. That can be by creating a monthly budget, having quarterly money check-ins with your spouse, always having money goals with action steps.
5. Talk about money like if you’re talking about what you did over the weekend.
Let’s make money a less taboo subject. Talk about it at home. Talk about it with people whose financial situation you admire. Share your financial dilemma’s and ask for guidance toward getting to a better place from a coach or someone you trust.
You have so much to learn by engaging in money conversations. You can also learn by being in a group with people who have similar interests when it comes to money.
It’s not easy to change our ways. We have been conditioned by our parents, our environment, and experiences to feel and think a certain way about money. It will take time (about 3 months) to develop new habits if we stick with it. You owe yourself that.