The average person views their relationship with other human beings as the most important in their life. While this belief is not misplaced, it does ignore one of the most important relationships any person has; the relationship they have with money. A bad relationship with money can actually ruin many of your personal relationships with other people, and send your life spiraling off track in the process. How can you build a new relationship with money that sits on a firm foundation?
A Shift in Your Fundamental Mindset
Like every relationship in your life, the one you have with money has to reside within a proper domain in your life. Money should not be valued above everything else, it should be ranked in an appropriate place emotionally and mentally. When money resides in the proper place in your life, you will find yourself placing less emphasis on decisions involving money.
Recognize Your Monetary Habits
The University of Minnesota listed "notice your habits" as one of the top ways to improve your relationship with money. What does this mean exactly? Well, for starters you need to take the time to focus on how and where you are spending your money. What sort of patterns do you see when you analyze monetary habits? Are many of your purchases spur of the moment? Do you tend to save and pinch pennies? Analyzing your habits and tracking your patterns can help you establish a healthy relationship with money.
Face Your Fears
A lot of people do not fully understand money. They recognize how to use it for bills and that jobs pay a salary, but they do not comprehend how to make it work for them or how to prepare for the future. Educate yourself on the things your money can do for you; for example, investing it in stocks, bonds, and mutual funds
Also, take the time to create a budget. Look at your income, analyze your spending habits, and prioritize your wants against your needs. Once you have a budget, stick to it. Additionally, it is appropriate to adjust your goals over time if you find yourself earning more money, and equally important to adjust your spending habits should you find yourself with less money.
Take Care of Yourself First
If you tracked your spending habits and found you are unable to save your money, then set up automatic payments into your savings and investment accounts each month to force yourself into saving. It may not seem like fun, but when you have money in the future, you will thank your younger self for thinking ahead and paying yourself first.
At the same time, as you build out your budget, do not forget the joy you get from the fun and entertaining things you do in your life. Budget for those occurrences, but remember to keep it reasonable.
Keep a Long-Term Vision
Money can be here today and gone tomorrow. Just like some of your relationships can be seasonal; meaning they are exciting at times and not so exciting at times, the same is true of your money. Remember to remain balanced in your approach to spending and saving, giving your budget and spending habits the regular attention (analysis and revision) required to protect your finances for the long term.
Most importantly, as Forbes notes, do not forget to celebrate the good and forgive the bad. If you reach a milestone in your attempt to save, whether for a vacation or college tuition for a child, take a moment to revel in that achievement. On the flip side, do not be too hard on yourself if you go through a down time in earnings or find your investments providing mediocre returns. These are likely just blips in your relationship with money, not long-term trends.
Avoid Comparisons
Last but not least, stop worrying about the finances of others. If you spend your life comparing your income to that of your siblings, friends, and neighbors, you might find yourself on a never-ending treadmill of dissatisfaction. Set aside the necessary time to reflect upon your financial achievements, and celebrate the hard work that got you there and the experience gained along the way. Contact Manhattan Ridge Advisors for more help on how to gain control over your money.