Do you often feel frustrated on how to manage your money?
Do you feel anxious about your future finances?
Are you looking for ways to improve your money management?
Do you want to improve your money mindset?
Are you reflecting on your past financial decisions?
If you have answered yes to any of these questions, this blog will help you sort through your finances.
Better money management will lead you to improve your ability to invest and save. As a result you will achieve all your financial goals.
The trick is learning various ways to manage your spending and save money. You have already read the power of habits, the same goes for your financial habits. By introducing positive money habits, you will become better with money.
You need to start by breaking bad habits that influence your money mindset. The bad habits influence how you treat money on a daily basis.
Remember that when looking to improve your finances there’s no one-size-fits-all model. What works for one person might not work for someone else. In this blog you will find tools and tips that you can use to sort out your finances and learn how to act smart about money.
Personal finance management is a concrete, learnable skill, like cycling, or walking. You have to get beyond the mindset and habits roadblocks that prevent you from improving.
Here are 5 tips and tools to improve your financial management:
1 - Work on your money mindset
In a previous blog post about money mindset, you have learned in detail about what your money mindset is and how to improve it. In my course, Hack Your Mindset, you will find a chapter dedicated to money mindset. Empowering yourself to succeed on your finances is the starting point. Improve your money mindset by recognizing limiting beliefs that you have around money. Start by writing a money journal, note down all your experiences related to money. This can be writing down your emotions when buying, or your desires.
Include in your daily routine affirmations for money like: “I attract money to me easily and effortlessly”, “I am open to receiving money in my life”. These are all ways to keep your mindset in check.
2 - Educate yourself on financial management
The most important investment you can make is investing in yourself and perhaps one of the best ways to do that is learning about personal finance. Think of your financial health like your physical health.
Join a community, get a mentor to learn more about financial literacy. Discuss learnings and experiences from peers related to money. Read books about money and finances. The book you can start with is “The Psychology of Money” by Morgan Housel. In this book you will learn more about financial decision making. And important factors that influence your money decisions.
Commit to educating yourself about your finances, and in the future you will thank yourself for it.
3 - Understand where you stand
You have heard many times about budgeting, right? A budget is a crucial part of financial success. Without a budget, it will be hard to know where you stand financially. The budget will allow you to track how much money you are earning, saving, and investing.
Budgeting will help you have a better understanding of where your finances stand. Budget means to have a plan for your money. To set goals for your money. To analyze and see your current state and where you want to be, and in which timeline.
4 - Build up on your savings program
You should have enough money saved to cover your living expenses for at least three to six months. And you must build up on it monthly, even if you put away a very small amount. Depositing money into a savings account each month is important to build.
Create an account dedicated to savings, or create a vault in your existing account where small amounts from your daily exchanges will be saved there. For example, I have created a vault on a digital bank, where all the exchanges from my transactions are going there. If I pay 10,40$ to have breakfast, then automatically 0,60$ will be saved in my vault. You will be surprised how small amounts accumulate!
Further, you need to be strict with this account, never draw money without an emergency or in a serious case. This account will help you feel calmer and safer.
5 - Be on top of your finances
When you are financially aware, you will be able to make smarter financial decisions. You will be able to assess where to invest. This skill will even help you on the simplest choices in your everyday life. By experience, you will become better at understanding where and when you should spend your money.
This is financial discipline. Financial discipline is the act of setting specific monetary (spending and saving) goals and measuring oneself against how well they are achieved. Being disciplined on your finances will improve your decision making and maturity on spending and saving.
The journey to better finances starts with changing your money habits. Some of these changes will be easier than others, and other periods easier than others, but it is important to stay committed to this change. By being committed to improve your financial mindset you will improve your financial management skills and you will understand which strategies might work better for you.
If you would like to become a member of a like minded community, to share your experiences, learn from others and build a support system, you can join my Free Facebook Community.