Money is a crucial part of our everyday lives. Though we have seen a rise on financial literacy, there are still challenges for personal wealth management. How do you really balance your current needs (expenses) with your ability to save every month?
To tackle saving and the habit of it, we need to understand that this is a mindset, a personal discipline. People who are able to save have the ability control their impulses to buy and to look at the bigger picture. They know that if they can discipline themselves to save more, they would have the ability to plan for the future and buy the things that would bring not only immediate satisfaction, but also lasting fulfillment.
However, just like mastering any other skill, being able to look at money and the act of savings as a positive discipline may take time and practice. But, this doesn’t mean you can’t start today. Here are some simple starters for you to have that money mindset shift.
Forgive Your Past Mistakes
We are our worst foe. The world may have a lot of opinion about us, but it is our own voices that bear the biggest weights. If you keep on going back to when go went broke or when you overspent because of binge or impulsive shopping, you would never get out of that loop. You would be stuck with that image of yourself as being undisciplined with money and you can never open that possibility for change.
Start seeing yourself in a new light and accept the fact that you are simply human. You make mistakes and this time, you are going to mak it right.
According to Certified Financial Planner and Founder of Financially Wise Women Brittney Castro, self-forgiveness is a big first step for shifting your mindset about money.
“Forgiveness is a powerful tool because it prevents us from being a prisoner to our past. If we shift our focus away from shame we can make room for better practices and a healthier attitude towards money.”
Instead of dwelling, try moving forward. Lastly Castro reminds everyone that we are not our mistakes.
Practice, Rinse, Repeat
Just like any another new habit that you are trying to develop, money habits take time to form. The next reminder talks about the actual work of managing your money. It will not come as easy as you’d expect it to be. If you have a habit of spending all your salary all the way up to the last cent for the last years, you can’t expect yourself to make to drastic changes. If you do, you will just get back to your original state of impulsiveness because you are suppressing your impulses without practice.
It also helps to create a plan first so you know why you are saving and what the end result is for.
“Understanding where you’re spending your money will help you determine where you can save more, if that’s your goal. This awareness will also help you pick goals that are achievable – even if they’re a stretch – so that you can build on your success rather than end up paralyzed by defeat,” according to Mint.
One other way to track your practice pace is to allot at least one hour per week to go over your finances and review if you have been on track with your goals. Do you see a trajectory towards your saving goals? Was there a “down” week where you spent on something you didn’t plan on? What are you weak points as a smart saver and how can you prevent these from happening again?
To be honest, an hour a week is not a big deal. In fact, according to Entrepreneur, millionaires have “money dates” for about 8.4 hours per week! So, if you are on track to reaching that millionaire status, you might as well develop a habit of setting date time to review your finances.