Money comes and money goes, but your relationship with it can all be determined by having a positive outlook. Most of us see money as income and expenses. The problem is that there is much more to that. Learning about what to do with money is important especially when you have a low income.
A lot of people focus on income and never consider expenses. You could easily live a decent life with a low income as long as your expenses were very little. If you are matching your expenses with your income you are set up for financial failure.
A good rule of thumb is to put 50% of your income into a savings account, 25% towards expenses, and 25% on yourself. Living like this is a great way to set yourself up for financial success in the near future.
It is very possible to live a more financially fulfilling life, you just need proper motivation and to want it bad enough.
Commitment Is Fundamental
The only way you will change your thoughts and relationship with money is but full commitment. Playing with finances and not preparing properly for the future is not something you do for a few weeks. This is not a dieting situation where you need to shred a few pounds for the summer, but rather a strict, daily routine that goes on indefinitely.
It all comes down to wanting it bad enough that you will do everything it takes. Be prepared to eliminate some of your favorite things. Sacrificing some things now will better you in the future. Do not use the mentality that you could die tomorrow. Of course, you could die tomorrow, but you could have died yesterday too. Stop making excuses and just start saving. Even having $100 is still better than nothing.
If you want a great retirement then you must know what to spend your money on. Money can be your best friend or your worst enemy. Imagine having your money work for you instead of just spending it on useless things that get you nothing in return.
Change Your Habits
Habits, both good and bad, are formed through repetition. The more you do something, the more likely you are to do it again in the future. This is why it is important to be intentional about the habits you form.
Good habits will yield positive results affecting you emotionally, physically, or psychologically. They can help you to be healthier, happier, and more successful. Some examples of good habits include eating healthy foods, exercising regularly, and learning new things. Your goal here is to add saving money to your good habit list.
Feel good about saving any extra change or cash lying around. Check your couch cushions and inside your vehicle. Put all loose change and paper money into a jar to save indefinitely. Do this for 6 months and see how much you have accumulated.
On the other hand, bad habits tend to lead to negative results including health problems, emotional distress, and financial difficulties. Some bad habits, such as excessive spending, need to be replaced with healthier behaviors. Sacrificing bad habits can help you save money and live a healthier life.
Stay away from gambling and wasting your money in the hopes of striking it big. Most people have no idea what to do with substantial amounts of money like that anyway. Best to stay away from casinos and lottery tickets as these are bad habits.
If you and truly serious about wanting to change for the better then you must commit every single day. Make saving a part of your lifestyle and always be thinking about the future. Force yourself to love saving money and get into the habit of saving any chance you get!
Needs vs Wants
Anytime you have extra money to purchase something consider asking if it is something you need or something you want. If it is something you absolutely need then make sure to budget accordingly. Sometimes we need things and must give up our wants to afford them. This only gives us more self-discipline which not very many people have.
Putting your financial priorities first will assist in your relationship with money. Some people may think waiting an extra month is two while some could easily wait a year. As long as a priority list is maintained there should be no issue with making financial decisions.
It is imperative you make these decisions in a wise manner and avoid being impatient to buy something impulsively. Wait a few months and reassess your financial situation. Ask yourself again if it is something you need or want.
Sometimes we buy things because we deserve them. There is nothing wrong with that at all just be sure you make a smart decision based on your current financial situation. Exercise caution in your purchases, especially if you are trying to save and already live below your means.
Make Extra Income
Making extra money on the side can be addicting and more rewarding than your current job. Plenty of people have successful side gigs or jobs and use that money to help with finances or purely for saving. In the meantime, however, there are quick ways to make money, like selling personal items.
If you have something that you no longer use consider selling it to somebody who will. No point having something lying around and in the way. You could always buy it again in the future if you really wanted but for now, sell it and put the money into your savings account.
Selling items that you no longer use can be a great way to make extra money. It can be hard to get rid of items, especially those with sentimental value, but focus on the positive. Justify letting go of materialistic items because your hobby is now saving money and you need to love it.
Income like this is quick and easy but rather short-lived. Although this is a good way to begin saving try aiming for something more lucrative.
Once you see the money start coming in it may motivate you to seek other ways for extra income, such as starting a side gig.
Start A Side Gig
Starting a side gig is extremely popular and is a must if you want to get ahead financially. You can use this extra income to put towards some bills or simply save it for the future. Regardless, it may be time to start a side gig of your own. There are plenty of things to do that could easily make you some quick cash.
Think of something you are great at and could teach others. If you excel at html design and website management then offer your services via social media or job offering websites. There are plenty of people who need help setting up a website but want more of a one-on-one approach. Also, building custom computers or teaching people how to use computers can bring in money.
Another great way to make extra money would be washing windows and/or cleaning gutters. Advertise yourself with some flyers or go knocking door to door. There is very little startup cost to either of these jobs and you would be shocked at how much money you can make. Consider how many people in your neighborhood offer either one of these services and the competition you would not have.
Having a side gig is your goal and may prove to have longevity and is a great way to gain extra income on your own terms. Start something on the side and add an employee or two once you become established. You may even be able to quit your job, start your own business, and live a life of financial freedom.
Always a great idea to have your own individual retirement account, too.
Multiple Finance Accounts
Many people have one checking account that they use on a regular basis. Instead, try having two accounts where 90% of your pay goes into your primary account and the other 10% goes into your savings. This is a great way to put aside money and force yourself to adapt to saving. It may seem like a lot or a little depending on your financial situation but this is a good place to start financial discipline.
It will be hard at first if you are already struggling, but you will be surprised how quickly your spending habits change. Not only that, but the money you would normally be spending, is now being saved. Avoid dipping into any savings unless you absolutely have to. Imagine it not even being there.
Consider having a couple of online banking accounts like PayPal or GPay and keep a minimum balance in there at all times. Put money in each account every chance you get extra income and give it time. Avoid touching it for no less than six months. This tip may help avoid the temptation of dipping into your savings and help maintain control of spending.
Having multiple accounts will help to organize where your money goes. For instance, have an emergency fund for medical, vet bills, car repair, etc., and another for future expenses or early retirement.
It is best to ask a financial advisor for advice when setting up a savings account because they can help you set your goals and give ideas. Talking to a professional will assure you are making the right choices and give you comfort.
No Excuses
Give yourself no reason to not commit. It is your responsibility to push yourself and do whatever it takes to achieve your financial goals. Tell yourself there should be no excuses for not loving your new favorite hobby, saving money.
Save as much as you can when you are able and maintain financial discipline. Establish a proper rhythm for saving the way you feel most comfortable. Changing your relationship and idealogy with money will give you more confidence from a financial standpoint.
“The only person you are destined to become is the person you decide to be.” – Ralph Waldo Emerson
-Ralph Waldo Emerson
Start slow and give it time. You will feel good knowing you are saving for the very important and near future. Most importantly, do not give up on yourself.
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