5 Tips for Building a Better Relationship with Money
Whether you love or hate money, it is something that everyone needs to survive in life. After all, homes, cars, clothes, and food aren't free. Like your friends and family, you need to cultivate a positive relationship with money in order to avoid creating unnecessary stress in your life. For some people this is difficult. If you struggle to manage your money, you may find the following tips helpful in building a better relationship between yourself and your finances.
Track Your Money
There is a large segment of the population, in America and around the globe, which feels like they never have enough money. The most important step you can take in building a better relationship with money is to track it. How much money is coming in to your account each month? How much is going out? It seems simple, but creating a visual path that allows you to clearly see how much you make and how much you spend will set you on a better path in the long run.
Learn Your Spending Habits
With the path of income and spending charted in the previous step, you're ready to go a little deeper and learn how you are spending all of your money. Look over the rough budget/chart you established in the first step, and begin comparing the sources of expenditures in your life. Is all of your money going toward rent, grocery, utility bills, and car payments? Are there any expenses in there you can cut out?
Build a Budget
A budget will help you begin to cutout the expenditures you are wasting money on each month. Everyone wants to have luxuries in life and feel a little pampered, but those extras should never come at the expense of necessities that really make your life comfortable. Look for expenditures you can do without, such as cable TV, dining out, concerts, and other outlets of emotional spending (such as unnecessary shopping sprees).
In this case, SMART means setting Specific, Measurable, Achievable, Results-focused, and Time-bound goals for your money. For example, don't simply set a goal to cut spending by $500 each month or save $1,000. How are you going to cut $500 from your spending? What are you saving the $1,000 for and how long do you have to meet that goal?
An example of SMART goals would be saving for a vacation. Once you determine how much your vacation will cost, use that as a specific and measurable goal. Determine how long it will take you to reasonably achieve that goal (time-bound), and then look for ways to save money (results-focused).
Consult a Financial Planner
Not everyone can call themselves a math whiz. If money just isn't your thing, consider taking the step of consulting a financial planner. By working with a financial planner, you get honest opinions and neutral comments that will help you construct a reasonable budget to live by and give you goals to reach for in the future, such as saving for retirement or establishing a college fund for a child.
When choosing a Financial Planner it’s good to remember that CERTIFIED FINANCIAL PLANNER™ Professionals are the golden standard when it comes to the credentials one can possess for financial planning. CFP® professionals must meet education, examination, experience, and ethics requirements. Working with a CFP® means entrusting your money to someone who knows more about financial planning than you do.
Money can be a source of stress in your life, but it doesn't have to be. Follow these tips and you'll find it easier to deal with your money in a constructive way that eliminates your finances as a source of stress. For more help building a better relationship with money contact Indian River Financial Group today and get started changing your money habits and your life.