An insufficient wallet is a reality that many have to bear. Your paycheck never gets to see the next paycheck. If you find yourself in this situation, what is the problem?
In this article, we shall explore some ideas that you can use to get to the bottom of your financial shortcomings.
The beginning of addressing any problem is assessment. That is where you need to start too to get your finances in order.
Assessing your relationship with money is an important step toward improving your financial well-being.
Here are some steps to help you evaluate your relationship with money.
Your relationship with money does not start when you get the money in your hand or when you find yourself lacking it. Your relationship with money is preceded by your thoughts, beliefs, and attitudes toward money.
That is why it is always a good idea to start assessing your thoughts, beliefs, and ideas about money.
Ask yourself these questions
These questions will help you understand what is your attitude about money. Before getting through the article you will be able to piece together what is the optimum way to think about money.
Read Also: How to Build Your Financial Well Being
After doing your mental assessment and understanding your attitudes, thoughts, and beliefs about money, you need to assess your behavior when it comes to your money.
First of all, you need to examine your financial patterns. For instance, if you are living paycheck to paycheck, when does the money run out? In your current situation would it help if you cut back on some expenses or are you living on a bare minimum? If you are living on a bare minimum and still your ends do not meet then you need to find another source of income or get a better paying job.
But your money patterns cut deeper than when you run out of money. When you get paid, what is the first thing you do? Is it spoiling yourself or do you pay your bills or do you save first? Books such as Rich Dad Poor Dad teach that you should set aside your portion first.
Studying your money patterns will help you understand where you are bleeding money and in what areas of your life you can optimize to reduce spending. It will also allow you to allocate your money more intentionally.
Read Also: 7 Ways to Stop Stressing Over Money
After doing the mental assessment of your perception of money and your money patterns it is time to start taking control of your money.
Setting financial goals and values is the first step to start reclaiming control of your money.
Start by asking yourself, what you want to do with your money. What are the ultimate goals you want to achieve with your money? This might be to retire early, it might be to travel the world, or build a rural retirement home. Whatever it is, it is time you were clear about what that goal is.
After determining what your goal is, that should guide your money values. The goals should dictate how much you save, how you spend, how many vacations you take, how hard you work, and so on.
Your money values should help you achieve your ultimate goal in the period you have set for yourself.
To achieve the goal you have set for yourself and be able to adhere to the financial values that you have set for yourself you need a mindset shift.
I like the word mindset because the meaning is in the word. A mindset is the way your mind is set. You get your mindset by referring to your thoughts, attitudes, and beliefs about money.
To achieve your goal you need to set your mind differently. You need to think about money differently. You need to have a different attitude towards money and you need different beliefs about money.
Changing our mindset is always difficult because it needs us to think independently and not rely upon the community around us. You need to earn and use your money how you see fit despite what the people around you think. This is not always easy.
But again maybe the reason you are always broke is because you do things the way they expect you to do things. It is time to take charge.
A good mindset to adopt is an abundant mindset. An abundant mindset is a growth mindset where instead of seeing limitations and being driven by fear, you are driven by possibility and you only see growth. Being positive and optimistic is what allows you to push yourself some more to get your goal.
Read Also: Money Mindset Shifts that Pay Off
This is a hard pill to swallow for many people. You are always broke because you emotionally spend your money. Spending money emotionally means that you do not have a plan on how you will spend your money and if you do, you do not keep to it.
A crucial piece of having money is being strict and diligent with the way you spend your money. You have to learn to say no more times than you say yes. You have to sacrifice time with your peers. You have to sacrifice that craving you have, and you have to pass on that purchase that is calling unto you in your mother tongue.
To avoid or overcome emotional spending, you have to have a budget. Then be disciplined to the T to ensure you stick to the budget like your bible.
Read Also: How to Curb Emotional Spending
A great improvement to your bank account is not just the zeros. Usually, the zeros are preceded by compounding knowledge. Kudos to you for reading this article thus far. This means that you are thirsty for education about money.
Constantly educating yourself on topics around money matters will make you more competent to make more money and manage the money more efficiently.
Financial literacy can be just keeping up with blogs and articles on money matters, or reading books that cover the subject. You can also use social media by following experts on money and finances to get nuggets as you browse through.
In addition, you can take personal finance classes where you are taught about personal finance in a structured, detailed and practical way.
The more you learn the more you find areas you can keep improving your financial capabilities. Meaning the more you learn about money and how to manage it the more you are likely to be less broke.
If your broke-ness is more chronic you might need to bring a financial adviser on board. This is an expert who will take you through your finances. Help you set financial goals, change your financial mindset, and help you establish positive behaviors that will get you off the financial ditch you would be in and start moving you towards financial freedom.
An attitude that will sustain you as you work hard to defeat brokenness in your life is gratitude. Being thankful for all that you have, and all that you are yet to make will shape your thoughts and beliefs towards a positive future.
Being able to see a positive future will give you hope. Hope is all we need to start moving in the right direction. Therefore make gratitude a core part of your daily life.
The journey towards the goal you set will not be a smooth ride. Because of the nature of life, there are times you will be required to pivot. There are other times you will be required to speed up or slow down.
Therefore you need to have regular check-ins to assess where you are and what you need to adjust to keep moving towards your target.
Let the check-ins be regular to avoid being caught flatfooted by any scenario.
Assessing your relationship with money is an ongoing process. Start with small steps and make gradual improvements over time. The goal is to develop a healthier and more positive relationship with money that aligns with your values and contributes to your overall well-being.