Managing one’s finances is one of the most important skills any person could have. Being able to do well in this area translates to a better lifestyle. Many issues or inconveniences could disappear if one knows how to handle their money. It is not about amassing a hefty amount to be able to live a comfortable life. It is more of getting the most of what a person has at the moment.
There are basic strategies to take control of one’s money. Budgeting, paying off debt, and saving are among the most famous examples. But it does not hurt to learn more. Here are some practical strategies that will help you grow your money.
Start by Educating Yourself
Most people think that financial literacy is only for a selected few. They feel overwhelmed with the many terms and ideas that come with handling money. But the truth is anyone can learn these concepts.
Many available resources explain financial concepts in layman’s terms. Topics like investments and how mortgages work do not need to overwhelm anyone. One can start with books, articles on the internet, or podcasts. If you are more of a conversationalist, you may find a professional or a friend who can explain things to you. Having a deep understanding of how your finances work can help you feel more secured and in control.
Practice Some “Creative” Saving
Saving is an integral part of financial security. But only a few are willing to have an upfront saving. Some find it hard to separate a percentage of their income as savings. To help you start, you can try some creative ways to do it.
- The five-dollar trick: Every time you come upon $5, do not spend it. Have a special container for all those $5. You might get surprised how much you can save in a month or a year
- Reduced spending: Have a specific budget for your essentials such as your utilities. This is an estimate of your usual consumption. Then, start practicing some cost-cutting changes. Whatever amount you save from your typical bill goes to your savings.
- Save your financial gifts: It is your birthday, and you received a small amount as a gift maybe from an old relative or your boss. Do not think of what you will buy from this amount. Instead, save it. This also applies to any unexpected income such as a bonus or commissions. It would be better to have a separate account for this purpose.
Establish a Healthy Lifestyle
You may not realize it, but your greatest investment to the road of financial success is yourself. You need to take care of yourself. When you are healthy, you can be more productive at work. Also, you save on unnecessary hospital bills when you have a healthy lifestyle. On another note, vices such as cigarettes and alcohol can also make a big dent in your budget. You can never go wrong with healthy food choices, an exercise regimen, and a good night’s sleep. These are affordable ways to help you gain financial security.
Normalize Treating Yourself
One mistake that people make is to go on extreme ends on the subject of treating themselves. Some people have no control over this area. They do not set a limit to what they spend for their rewards. The other end of the spectrum are people who think that treating themselves is a crime. They deprive themselves for a long time of any fun. Thus, when they do give in, they splurge in excess.
The key to this issue is to find the balance. Set aside a reasonable amount of your income to spend on things and activities you enjoy. You can also make a big reward as a goal to save. You will find joy in saving as you look forward to that vacation that you are dreaming of.
Do Not Succumb to an Inflation Lifestyle
Imagine this scenario- You got a promotion. You are very excited that you would now have the chance to build your wealth. But as months passed, you notice that you are not saving anything. On the contrary, you seem to be spending more than before. Chances are, you have succumbed to an inflation lifestyle.
You may need some upgrades with the new position that you hold. But be vigilant on what you truly need versus what you think you need. If a new set of clothes will help you gain the confidence of your clients, then allow yourself some new pieces. If these clothes are only to prove that you can now buy signature pieces, it is better to postpone your purchase.
Better financial health is a combination of the right mindset and the right actions. When you pursue your financial goals the proper way, you will see your wealth grow.