How would you describe your relationship with money? The unfortunate truth is many of us struggle with finances, creating more complex relationships with cash over the years. Sometimes, something as small as a bad spending habit can lead to a dangerously problematic relationship with money over time, which paves the way for debt, stress, and countless other issues.
Fortunately, it’s never too late to start working on your connection with your finances and cultivating a healthier relationship. A few simple steps could be all it takes to completely transform your situation and improve your chances of long-term financial success.
1. Budget Regularly
Many see budgeting as restrictive and time consuming, but it’s actually a great way to declutter your funds and one of the most important things you could do to improve your financial health. Creating a budget means sitting down and looking at both your incoming money and outgoing expenses, to ensure you have a thorough understanding of where your earnings are going each month.
Budgeting not just once, but on a regular bi-monthly basis, will help you to keep on top of changes to your situation, so you can continue to reach your savings goals. Set aside a time every couple of months where you can sit down with your financial statements and actually get to know your spending habits on a deeper level.
2. Be Proactive About Saving
No one’s going to save for your future on your behalf. If you want to accomplish your financial goals and become independent, you need to be proactive about reaching your targets. You can start by looking for simple ways to cut the costs of various monthly bills.
Something as simple as student loan refinancing can be enough to give you an incredible amount of extra income to yourself each month. At the same time, you can look for other simple ways to cut costs on a regular basis, like comparing the costs of different utility and insurance providers to see whether you’re getting the best deal or changing where you shop for food to lower your monthly grocery bills.
Taking the time to actively look for ways to save cash can ensure you get the most out of every purchase you make. You can even be more proactive when shopping online, and use plugin tools to automatically add coupons to carts.
3. Know Your Financial Values
Finally, if you want to strengthen your relationship with money, you need to develop a better idea of where your financial values lie. Think about what matters most to you when you receive your income on a monthly basis, and whether you’re spending in a way that allows you to achieve your goals.
Understanding your financial values will help you to adapt your saving strategy to suit your own priorities. You might decide you’d rather have more money in your emergency savings account than you do in your car savings fund to begin with.
Or perhaps you want to spend more money on food each month than you do on entertainment. It’s up to you to create a budget that makes more sense for you.
