We all certainly know about the fundamentals of the money management mindset. Think about earning more than you’re spending, having an emergency fund, etc. However, maintaining these habits are easier said than done.
Surely, everyone knows that part of responsible adulting is being able to manage your finances. However, it is a common scenario to still see yourself living “paycheck-to-paycheck”. You may ask yourself, “What could be wrong?”Don’t worry because you are not alone in this kind of money management dilemma…
Understanding Financial Responsibility
Financial responsibility is such a complicated term. In a nutshell, it refers to the process of properly managing your money or assets. This means that your ways must be productive and must serve your best interest. While a lot of us actually understand the basics of it, many still end up with zero savings and countless debt. Thus, the need to seriously address the problem and develop the right money management mindset.
Money Management Mindset Tip #1: Acknowledge Your Money Mistakes and Forgive Yourself
Have you ever missed a credit card or bill payment? Have you overspent on something? How about raiding your savings for no valid reason? I think we’re all guilty of any or all of these at one or some points in our lives. Nonetheless, it’s time to forgive ourselves about these financial fails. Besides, forgiveness sets us free from being prisoners of our wrong decisions. When we forgive ourselves, we enable adopting a healthier attitude and better practices on money matters. Make apologies to yourself and then move on. This is the first step you need to do in order to start right.
Money Management Mindset Tip #2: Make a Budget and Commit to it
A lot of people are scared of the word “budget” because of the restrictions that they think comes with it. However, this is among the initial things that you have to deal with if you are really serious about changing your money management mindset.
Create your budget at the beginning of each month. You can start one by breaking it down into categories. For example, you can have (1) the must-spend, (2) the essentials, and (3) the optional. The must-spend includes your rent/mortgage, utilities, debt/loans, and savings. The essentials include your groceries and transportation costs. Lastly, the optional expenditures include shopping, travel, and other leisure activities. You can add inclusions to each of these categories depending on your financial needs and obligations.
Come to think of this – not knowing where your money goes is scarier than having a budget, right?
Money Management Mindset Tip #3: Cut Emotional Spending
Did you know that spending is actually more of an emotional than a rational decision? This is where impulsive buying comes in. What you may not realize is that your spending habits are driven by your present circumstances. Can you recall times when you splurge on shopping because you were stressed at work or at home? I bet you can! This is actually a common scenario. Money is power. So, when life throws a few curveballs and you feel powerless, you see yourself using it to regain control or ease the pain. Stress reliever, doesn’t it?
Money Management Mindset Tip #4: Don’t Compare Your Financial Journey with Others
This is another money management pitfall that you better cut off from your habits. You tend to be ungrateful for what you have when you keep comparing yourself to others. Social media play a huge part in this. You see your friends, relatives, or colleagues celebrating their job promotion, buying a new car, etc. All these can make you doubt your financial journey. This is not a good way to spend your time and map out your money management plans. Comparison may only make you feel like you don’t have enough, hence taking your focus away from your financial goals. Why don’t you just create attainable financial aspirations and keep your focus?
Money Management Mindset Tip #5: Develop Good Money Habits and Practice it Throughout Your Lifetime
Developing the right money management mindset is just like any other skill. You start small and keep practicing until it becomes a part of you. It doesn’t have to be overwhelming. You just have to be committed to it so you can reap the rewards of having the right attitude towards money.
Here are some tips to develop the right money management mindset:
- Practice gratitude and thank God for all that you have right now.
- Refrain from saying negative remarks about money. Avoid phrases like “I don’t have money”, or “I can’t afford it.”
- Have an abundance mindset. Believe that you can achieve your financial goals. You’ll get there with determination and by religiously following your newly-adopted money management habits.
- Save no matter how little or how big you are earning.
- Pay off your debts. It doens’t matter if it’ll take you years to completely wipe your debt as long as you don’t skip payments.
- Think multiple times before buying something new. Do you really need it? Can you live without it? If you have doubts with your answer, don’t buy it.
- Reward yourself once in a while. The best practices when it comes to money management does not include totally depriving yourself. Besides, you deserve occasional rewards for your hard work.
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