The way we see money has a big impact on our happiness and stress levels. Some of us constantly worry about finances, whereas others tend to spend on impulse, only to regret our rash decisions later. Let’s look at four strategies to change our mindset when it comes to money, so it can work for us instead of the other way around.
Get Over Your Past Money Mistakes
What is done is done. You can’t change how much, or how foolishly, you spent in the past, but you can certainly assess your spending habits and modify your buying behavior accordingly. Go through your monthly bills and see where your money is going and figure out where you can cut down on expenses. Take this opportunity to organize your financial records. Toss out or shred any bills and receipts you don’t need any longer and digitize all your important documents for easier access and retrieval.
Live Within Your Means
Being an overspender and looking for instant gratification without a care for tomorrow often leads to financial stress when the bills come due and your bank account is empty. If you fall into that category, creating and sticking to a budget is a must. Add up all your sources of income to assess how much you bring in each month and subtract your living expenses and monthly bills from that amount. Then, save a percentage and spend what’s left over. We also recommend you use that extra cash to pay down loans or credit card debt, which will improve your financial health and raise your credit score.
Focus on Your Long-Term Goals
Having financial goals will give you the motivation you need to start saving toward them. Whether you want to buy a new car or purchase your first home, dedicate a set amount of money from your paycheck to go directly into a separate savings fund. You’ll be less tempted to spend it if it’s not easily accessible via your debit or credit cards. If you’re looking for a savings product with a higher interest rate to make your money work harder for you, investing in a CD, or certificate of deposit, is a great option as long as you don’t need to take the funds out of the account before a fixed period of time, even in case of an emergency or a change in life circumstances.
Earn Additional Income
You’ve cut down on unnecessary spending, but you’d still like to have money on hand for extras? Freelancing on the side as a tutor, CPA, blogger, pet sitter, or selling homemade goods at local craft fairs can bring you the extra income you need to take your family on a nice vacation or get all your home renovation projects finally completed.
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Work With a Financial Planner
Hiring a financial planner can be an advantageous decision, as they provide sound and practical advice when it comes to your finances. Purposeful Financial and Legacy Planning has the expertise to help you build a personalized strategy that aligns with your goals and provides clarity on any complex financial issues you may be facing. Moreover, they understand the individual needs of their clients better than anyone else, helping you make intelligent decisions related to investments, budgeting, retirement planning, and more.
Feeling financially secure is one big way to prevent stress and anxiety. So work your way toward a bright financial future by planning a realistic monthly budget and putting money aside to spend on the things that matter most to you and your family. And if you’re looking for extra ways to make money, update your resume and CV and find freelancing work.
Thanks to guest author, Becky Frost, of single-saving.com, for the information in this post.