One of the keys to financial health is keeping a purposeful and conscious relationship with money. It involves having reasonable debt (if any), spending money based on your values, having a safety net such as insurance, saving and investing money to meet your future goals. Regardless of your relationship with money, several steps can be taken to enhance it.
The following steps will help you create a better relationship with money.
1. Take note of your money habits
First, take time to evaluate how and where you spend money on a monthly basis. For example, list the top things you spend too much on and then rank them in the order of what makes you happy the most and what least appeals to you.
Ask yourself. What motivates you to spend money on certain areas? What are my triggers? Am I an impulsive buyer?
Note that your relationship with money is largely enclosed in your character. By paying close attention to your behavior around money in terms of income streams, you can get a deeper understanding of yourself then use the knowledge to enhance your financial habits.
2. Putting it all together
Improving your relationship with money also stems from making a fundamental change in your mindset. Having a good relationship with money is not necessarily about earning a huge income or working overtime. But it is about placing less emphasis on decisions where money is involved. There will not be pressure to take up a job or a career where money is not the primary factor.
3. Adjust your goals
Watch your budget closely and only spend what you comfortably could afford. Most of the people tend to spend more and more as their income increases. Instead of increasing your spending, it is wise to increase your savings. The best way to help you emphasize your goals and spend less is by establishing incentives that will motivate you to watch your budget.
4. Focus on saving
Credit cards are very enticing since they separate spending from the pains of payments that need to be made. The best way to do this is to set a default savings transfer your bank account or paycheck. It is well-advised to focus on your hard-earned money and use it to invest in the business and use it to invest in the business, buy a house, and opening saving accounts.
5. Get started now
Many people have an unhealthy relationship with money. For you to change your financial status, first change your paradigm about money and then act on it. Building a good relationship with money is important if you want to live the best life possible now and in the future.
This article was first published on MoneyCompass.