- Education

How To Improve Your Relationship With Money

Our relationship with money is based on how much we have and how much we need. But, improving our relationship with money can be far more universal.

1. Improve Your Relationship With Money

To improve your relationship with money, we need to relate wisely to money so it’s much less about the actual numbers and more about our mindset.

Separate wants from needs

Even if you already have a good idea of where is your money going, you can always benefit from tracking your money more diligently. Although it’s completely natural to look out for pleasures that we think make life worthwhile, sometimes we get caught in the idea that money buys happiness only to find out this isn’t the case. We end up spending money on things we don’t need in order to satisfy a deeper longing for pleasure, escape, a desire to detox, or connect with others. Things bought with money are usually short-lived and don’t bring long-lasting satisfaction.

Create a new system

Do you need to reward yourself with a new bag? Do you need a $6 Starbucks coffee to inspire yourself enough to get your ass to work every day? How about meditating in the morning so you kick start the day being more mindful so you ultimately build a life that you will look forward waking up to. Buy experiences instead of material goods.

Don’t compare yourself to others

We tend to compare our income to others and only be satisfied if it is relatively higher. We need a good income to feel worthwhile, only to end up on an endless treadmill of dissatisfaction. You need to deliberately step away from running like a hamster in a wheel and assess your true values. Your money is only one resource and is certainly not your most valuable possession. The world could use more kindness and authentic people who share their gifts with the world.

Align your financial goals with your life goals

Humans have a tendency to adjust our expectations upward as our income goes up.  Do you really need more expensive things and more of them? Do you really need a bigger house? How about sharing or making someone else happy?

2. Common Financial Mistakes

Steering clear of these mistakes will keep you away from financial hardship.

Excessive spending

Great fortunes are often lost one dollar at a time. Getting a takeaway caramel macchiato every day can add up quickly.

Never-ending subscriptions

Do you really need cable, Netflix or a fancy membership month after month, year after year? A leaner lifestyle can go a long way in boosting your savings account.

Living on borrowed money

Living on credit cards has become somewhat normal as we treat this money as our asset, when it is in fact a liability. Living beyond means can never end well.

Living month to month

If you live paycheck to paycheck, an unforeseen problem can easily become a disaster if you are not prepared.

Not having a plan

If you don’t have a strategy in place, how do you plan to achieve your life goals as they are usually interlinked with your financial goals?

3. Personal Finance Tips

We can all benefit from some universal steps toward having a more secure and balanced relationship with money. Here are a few of those pearls of wisdom.

Track your net worth

Even if you don’t have to rebuild your finances, tracking your net worth which is the difference between your assets and debt gives you the big picture of where you stand. It helps you track your progress towards your goals as well as provides you with red flags if you’re getting behind.

Budget like a pro

Learning how to budget is key for financial success. Having a budget helps you meet your obligations on time such as your rent, West Penn utilities, food, insurance. It also serves as a roadmap towards your financial goals and helps you identify any unhealthy money habits.

Change the way you think about money

A mindset can make a difference between a good and a bad day and the same applies to your finances. Try a cash-free diet to conquer your fears. Take a daily money minute to track your finances every day. Challenge yourself to spend only on necessities for a month. The point of every challenge is to show you that you hold the power over money, not vice versa. Draft a financial goals vision board to help yourself stay on track. Banish toxic thoughts as they are a self-fulfilling prophecy and replace them with a positive spending mantra that works for you. Above all, love yourself and savor every moment as you will discover that the best things in life are free.

Takeaway – As with everything in life, take what works for you and ignore what doesn’t. Like any relationship, having a good relationship with money takes work. In a nutshell, money should serve us and help us improve our lives and the lives of others, but not control us. Remember, you hold the power.