Most of us know what it takes to manage one’s finances effectively; spend less, save consistently, set aside an emergency fund, and invest. However, how many people can honestly say that they follow this plan?
Not many. A quick internet check shows that over 40% of Americans have less than $1,000 saved and up to 80% are in debt.
You can get yourself out of this mess. But, it’ll take serious sacrifice. The following are four expert tips to get you started.
1. Forgive yourself for past financial mistakes
A common mistake people make that can leave you permanently stuck in financial misery is not forgiving yourself for past mistakes. No one can say that they’ve never made a financial mistake. For example, there are a lot of people dealing with bad credit and missed bill payments.
The first step to successful financial management is forgiving yourself for any past mistakes. Recognize that buying that overpriced pair of shoes might not have been your best decision and move on from the shame and guilt. Doing this will help you make room for better financial practices and allow you to develop a better attitude towards money.
2. Stop comparing yourself to others
This is why watching too much TV and spending all your free time on social media isn’t advisable. While both of these are good ways to pass time, it’s far too easy to get sucked into making comparisons. Before you know it, you’ll start feeling like your TV isn’t big enough, that you need that new designer handbag and all that.
To develop a healthy financial attitude, you must steer clear of these comparisons. Why? Because you don’t know how much those people on TV and social media make! What if they make 10x what you make? Surely, you can’t compete with that. So, stop comparing yourself to anyone. Instead, compete only with your goals.
3. Create and maintain good habits
And it’s not just spending habits we’re talking about here. Everything from the food you eat to how you spend your time has an impact on your finances.
Where to start? How about your budget? Do you even have one? If not, this is the time to create one. Write down everything you’re going to spend money on this month, how much you’re going to save, and how much to invest. This awareness will help you avoid impulse spending as well as help you determine where you can save more.
4. Be grateful for the little wins
Finally and most importantly, the happiest people on earth are those who are grateful for every little achievement. Whether it’s a good lunch or waking up feeling healthy, you need to recognize that your money is doing a good job.
So, don’t wait until you’ve built a successful business or drive a fancy sports car to be happy. If that happens at some point, fantastic! In the meantime, look around, recognize what the little money you have is doing to your life, and appreciate every moment of it.
Now, Your Turn
If you can follow these four tips, you’re on your way to a happy life with much welcome financial freedom.