Talking about money is viewed as taboo in many circles, but at the end of the day, money is what makes the world go ’round. Money pays for health appointments, housing and utilities, food, gifts, gadgets, and lifestyle expenses.Though it can feel burdensome to constantly be thinking about money, making a few changes to your existing habits and adopting positive new ones can ensure you’re financially secure at every point in your life.
1. Stop paying only minimums on your debt
Debt is a sensitive issue to tackle because not everyone can afford to pay off more than their minimum balance. However, debt is an important financial expense to pay as quickly as possible, because the longer you take to pay it off, the more you pay over time in interest.
If you can, try and find an area to cut back on or downsize, and with that money, choose one bill to increase payments on while continuing paying the minimum balance on your other bills. By eliminating one debt, you can get the morale boost and momentum you need to pay off all your debt as soon as possible.
2. Start exercising discipline
It’s easy to want to unwind on the weekends or after a long day of work with some retail therapy. However, this attitude and lifestyle cuts drastically into money you could be putting into savings, which can support you during intense times in your life when you go through a spell of unemployment or have an unforeseen windfall of large expenses. Rather than viewing your saving contributions as optional, prioritize saving and invest in your future.
3. Re-program your financial mindset
If you can’t imagine life without your credit card, it’s time to re-program your thinking and habits. Some financial planners recommend dipping your card in a bowl of water and literally freezing it for two to three months. This creates a physical obstacle to getting your credit card back, and makes it harder for you to call your plan off and simply throw your card into your purse on the way out of the house.
So how are you supposed to pay for things now? Cash and a debit card, which will force you to reason based on how much money you actually have to spend, instead of borrowing endlessly. If you don’t have the money for it, don’t buy it. Also, if you don’t have overdraft protection and your balance is negative, the bank will charge you high fees.
4. Being finance-phobic
If you’re clueless when it comes to finances and have no real foundation for growing your knowledge, it may stop you from investing, financial planning, and could lead to overspending or jeopardizing your potential to be prosperous.
Get educated and be strategic! Learn about budgeting, investing, and saving from MyBankTracker. You can also learn about banking tools and the best interest rates for whatever you’re in the market to borrow, whether it be a home loan, car loan, etc.
5. Buying because it’s on sale
Capitalizing on great sales can feel amazing. All that value, just for you! However, when you buy just for the sake of partaking in a sale, it isn’t worth it. If you were in the market for something specific, and you stumble upon exactly what you need for half the price, that’s a great deal. If you’re walking around in the mindset to shop and see something highly marked down and buy it just for that fiscal victory, that’s an impulse buy.
6. You’re psychologically driven
Our upbringing can affect us profoundly, and instill behaviors that last a lifetime. Perhaps you had frugal parents and now that you’re an adult, you’re spending freely now to compensate for your childhood years. Or, if your parents always spoiled you, you may be used to a lifestyle of luxury and are living beyond your means. Consider the psychological context surrounding your fiscal actions, and try and reconcile your issues.
7. Review your finances more often
Take a few moments daily or weekly to check your bank account balances and transactions so you can know how much you’ve spent, and refocus your actions for the near future in order to keep up with your savings goals and budgeting plans. Being vigilant about your account balace can also help you avoid getting hit with an overdraft fee.
8. Automate your savings
In order to keep up with your savings, set up an automatic transfer from your checking account to your savings. A bi-weekly account for instance, might be ideal for someone who gets paid on the middle and end of every month. Having your money deposit automatically is a painless and easy way of growing your savings.
We all have our vices, and though everyone wants to live comfortably and luxuriously, this mentality often results in living beyond our means. Take it as a challenge to try and shift your focus from acquiring a lot of “stuff” to building a life of financial freedom for the future.