Do you have a healthy relationship with money? Do you need a money health check? More importantly, do you have a healthy relationship with your money? Whether you like thinking about money, or do everything you can to avoid the subject, there is no doubt that money is at the heart of society.
The amount of money that you have can make a massive difference in the way that you live your life. If you are continually worrying about how you are going to make it through until your next paycheck, you may feel perpetually anxious about money. However, if you are someone that likes to splash the cash, you may believe that money makes you feel good about yourself and gives you enjoyment.
Regardless of how you feel about money, performing a money health check now will allow you to be in charge of your finances and find ways to improve your financial situation.
Change Your Financial Mindset
Continuing to spend and ignoring your financial situation is how many people end up in debt. If you are a person that doesn’t like to think about their money at all, you could very easily find yourself in a difficult situation. Changing your attitude towards your finances is an important way to develop a healthier relationship with money.
Ironically, avoiding thinking about your money now will likely mean that you need to think about it a lot more seriously in the future, especially if you find yourself in financial difficulty.
Try to see money from a practical perspective, rather than an emotional standpoint. At its most basic level, you work to earn money, the money that you earn then covers the cost of your food, bills, car, and rent or mortgage. At this basic level, it is easy to see money as merely a transaction between working to earn it, and then spending it on the essentials.
Negative attitudes towards money emerge when you begin to focus on material goods in life and place high importance on having the latest items such as clothes, cars, phones, and so on. When you are always chasing the latest must-have items, resentment can build-up, and you can find yourself negatively comparing yourself to others.
Breaking free from negative attitudes towards money is the first step to a healthier relationship with your finances. Once you start to view money in a practical sense, you can begin to take action to get your finances into better shape.
Spend it Wisely
Do you love a bit of retail therapy? If so, you probably enjoy the buzz of heading out to the mall in search of something new. However, once you have bought the item and the initial buzz has worn off you may be left with something that you never use.
Before you buy anything, it is a good idea to pause for a moment and allow yourself to think about it before leaping into making impulse purchases. Ask yourself, ‘do I really need this?’ before you take it over to the counter and part with your hard-earned cash. If the answer is no, simply put it back and congratulate yourself on the money that you have just saved because saving money can feel good too!
As well as reducing your number of impulse buys in the mall, you can also reduce the amount of money that you spend on essentials too. Shopping for groceries is an excellent example of an easy way to save money each week. Instead of always visiting the same store for your groceries, why not change your habit and switch to shopping in a store that offers greater value for money.
Even the simplest changes to your spending habits can add up to significant savings over time. Why not keep track of how much money you are saving each week from your new spending habits so that you can keep track of the progress you are making? You could then put this money towards paying for something that you really want or need.
Make the Most of Your Money
Wasting your hard-earned cash is a situation that you need to avoid. As part of your money health check, you should go through your bank statements to keep track of what you are spending and how that can be reduced. Regularly checking your statements in this way will ensure that you aren’t wasting money, and will enable you to get a clear idea of how much you spend over the course of a typical month.
As bills take up a large chunk of most people’s income, it is well worth going through your bills to see if you can save some cash on them. Instead of continually using the same insurer, try looking for a cheap auto insurance company near me to see how much you can save on your vehicle insurance. This same logic applies to all of your service providers, so it is well worth looking into as you could make some significant savings.
While checking through your finances, you should also look out for any regular debits that are no longer needed so that they can be canceled. Monthly payments for memberships and subscriptions that you no longer need should be canceled, but just be sure to read the small print to make sure you don’t incur costly cancelation fees.
You may be surprised to find that you actually have quite a few small amounts regularly leaving your bank account that you had forgotten about. Canceling these can represent a significant saving over the course of a year.
Prepare for the Unexpected
Life has a habit of throwing a curveball at times it is least expected. Unfortunately, situations such as unexpected bills, accidents, illness, or losing a job can happen at any time. While no one can see into the future, it is useful to protect yourself as best as you can against whatever life throws at you.
Having a healthy savings account is your best means of protecting yourself against unforeseen circumstances. Ringfencing some money in your savings account to be used as an emergency fund will help to ease the pressure on you should something unexpected happen. Many experts suggest saving enough money to cover six months worth of outgoings.
However, depending on your individual circumstances, you may choose to save more than this if you can afford to set aside a more substantial sum for savings and your emergency fund each month.
It is useful to set up a regular payment so that your savings and emergency fund money goes straight into the correct accounts each month. Trying to remember to move the money yourself every month can become confusing, and you may forget to do it.
Make More Money
If performing your health check has shown you that your outgoings are bigger than your monthly earnings, now is the time to take action. The longer that you ignore the situation, the worse that it will become. Addressing this issue should help to take away those nagging money worries at the back of your mind.
There are several options available to you if you find that your outgoings are exceeding your earnings. The first option is to reduce your outgoings, by implementing the changes recommended above, such as changing to cheaper suppliers for your bills, cutting the cost of your grocery shopping, and reducing your everyday spending.
Along with reducing your spending, you may also want to look into ways that you can increase your income. Now maybe the time to put yourself forward for a promotion, or perhaps your boss would be amenable to giving you a wage rise.
Lots of people earn extra cash by taking on a side hustle alongside their day job. A side hustle can be a useful way to add an additional income stream, and some people find that their side hustles are so successful that they can leave their regular jobs. There are all sorts of side hustle ideas out there, but if you have a particular talent or interest, you may want to put it to use.
If you love animals, maybe you could be a dog walker or pet sitter. If you are a budding artist, perhaps you could list your works of art on an online selling site. There are just so many possibilities out there for taking on a side hustle.
You may find that your side hustle becomes something that you really enjoy, as well as a means of making you more money. Don’t forget to look into the tax implications that earning extra money may have for you, before getting started on your new money-making project.
Think About the Future
Keeping your finances healthy is essential, but it is vital to think about your future too. Make sure that you plan for your retirement so that you can continue to live a life that is financially secure in your later years also. Saving for your retirement will provide you with added peace of mind and the freedom to enjoy your life.