Financial freedom can help reduce your stress levels immensely. That doesn’t mean you need to be living a life of luxury, but you do need to ensure that your finances are under control.
According to Will Smith, “Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.” Being around some of the richest people in Hollywood and having a net worth of 250 million last 2016, he probably knows what he’s talking about.
For the past few years that I have spent delving into adulthood, I learned that it’s extremely vital to know how to manage personal finances and save money.
I’m no expert, but here are some personal financial management tips I’ve learned:
1. Create a financial vision board.
Visualization is a powerful tool to reaching your goals. When you know exactly what you want, it keeps you focused on what you have to do to achieve it. A vision board will help you keep track of where you want to be in the future, so you can keep moving forward.
I tend to forget my lifelong dreams and aspirations when I fall into a low episode, so I created a vision board a while back. I can honestly say it has motivated me at certain times when the future looked dim for me.
It’s really simple to make. Just collect photos that represent what you want in life, and create a collage. For my vision board, I used photocollage.com.
2. Practice self-discipline.
As you grow older, you’ll realize the blessings and responsibilities of being an adult. Personally, I need to make sure that I always pay the basic necessities on time. Otherwise, I will be the one left to without electricity, water, or a house to live in. So I need to learn how to manage finances effectively.
I admire parents who teach their kids financial literacy at an early age, because they will reap the benefits of that when they grow older. It could be as simple as learning how to save a few coins at a time to buy a toy eventually.
It’s better to invest and save now, and reap the benefits in the future.
3. Avoid falling into the credit card hole.
We need to remember that using a credit card means we will be paying for things we purchase with our future earnings. If you can save and pay for something with cash, do so. Be careful with how you use your credit card, and make sure that you are not biting off more than you can chew.
4. Spend money on skills and experiences.
Things get broken but memories can last forever. When you hear a dying person’s last words, it’s never about their luxurious car or mansion. People remember the happy times or things they could have experienced or still want to do. So why not invest on relationships with your loved ones or building skills for personal development instead of splurging on material things? Have dinner out with family. Visit a theme park with friends. Travel to different places. Learn something new. Use your resources to build a life without regrets.
5. Track your expenses.
I can’t count how many times I’ve felt broke and asked myself, “Where’d all my money go?” That’s probably the reason why I don’t have much savings at this time. But I want to change that, so I created the Daily Warriors Budgeting Spreadsheet. I know there are different Financial Management spreadsheets online, but making one myself made it easier for me to understand. I’m not a pro, so it’s as simple as typing in expenses (rent/water/electricity/internet/personal care) and income. This would help in tracking a pattern on spending habits and make any necessary lifestyle changes.
You can check it out here, and create a copy for yourself if you’d like to try it out. 🙂
I’ve also found a Budget & Bill Organizer at my church’s bookstore, and it has pockets to keep receipts. I purchased it today, and I’m so excited to use it!
Ultimately, discipline with finances has a lot to do with wise decisions and delayed gratification. When you’re struck with the urge to buy something, ask yourself, “Do I really need this?” If the answer is no, then you might be better off without it.
- Have you attained financial freedom?
- Are you under a lot of stress due to debts or lack of money?
- What can you do to have better spending habits?
P.S. Financial management is part of my major goals for 2017. I’ve already opened a savings account, and now I need to establish good spending habits. How’s your progress with your goals for this year?