When it comes to money management, the rules are simple, spend a little less than what you save. You should also save for an emergency fund, or think about investing for your retirement. We know we have got it right all down to the basics, but the truth is, how many of us follow it? Money management isn’t difficult if you are disciplined about it.
And the cons of discipline is people very often get bored of discipline and tend to fall off the wagon. Fortunately, some easy ways can help eliminate the negative issues associated with money and finances. It would instill a more positive mindset and build some great habits. Here are a few ways you can do that.
Even if You Make Small Mistakes, Forgive Yourself
Let’s get this straight, only a handful of people can proudly say that they never committed financial mistakes. We have always ended up spending too much on clothes or raided our savings without any reason.
We have all been there, done that, and it’s time to forgive ourselves. When you forgive yourself now for your past financial mistakes, you will be in a better state of mind, and only then will you be able to move forward.
Don’t Compare Yourself With Others
We know what social media does to the best of us. We get drawn to comparisons and more comparisons, till you beat your self-esteem to death. At the same time, you may think that the others may be doing great financially. And going by their social posts, right from their clothes and fabulous holidays in exotic locales, the scene truth may be far from great.
Yes, they may be in a debt trap for all you know. Being sad about the great things happening in other people’s lives may divert you away from your real focus, of staying true to your money aspirations. Celebrate your wins and stay happy and positive in whatever state you may be in.
Nurture Good Habits
Once you have your goals sorted, it is time to meet them. The only way of meeting them is by delving into your income and creating a reasonable budget for that. When you know exactly where you are spending money, you will understand where you can save more. This will help you focus on your success and build it up from there.
Set a time for yourself, an hour or so every week, to evaluate your finances and determine where you stand. For some people, one hour seems a lot, so start small and gradually increase your time evaluating money matters. You can seek help from various money apps, and spreadsheets to review your money matters.
Budget Without Restrictions
Thinking of a budget can make people nervous. So, set gentle boundaries for yourself. Know, exactly where you are spending money. When you have more knowledge about the money you are spending and where you are spending, you will be more empowered. This awareness will help direct your spending to more meaningful investments.
Sometimes we end up spending on things that ultimately do not make us happy. Maybe it makes us happy for the time being, but it (the happiness) soon fizzles out. We need to figure out how much we are earning are as per our goals. If you are doing something, is it giving you the happiness you think it will provide you with?
Budgeting as per Norms
If you are thinking of budgeting, always consider the 50/30/20 rule. The major chunk of your earnings (50% of your earnings) goes for essentials like housing, food, gas, medicines. The next 30% should go on vacations or things you want to do. And the last 20% will be for savings.
If you have debt, then spend 20% of it, paying that off first. If you keep aside the 30% and 20%, separate it from the 50%, and you’ll be okay. This won’t need you to spend on an itemized basis every month. Also, with the remaining 30%, you can spend on anything you have wanted to own for a long time.
Always be grateful and practice the art of gratitude. Whenever you feel overwhelmed with situations, you can go back to your gratitude journal to draw strength from them. This will help you keep you positive for the journey ahead.