For our physical health we eat our fruits and veggies and we make time for the gym. Like our physical health, our financial well-being needs regular TLC too. We use savings apps and try hacks like freezing credit cards or paying with cash, but practicing financial health starts with identifying your financial personality.
Be True to Yourself
Spending less and saving more comes down to living within your means. If you’re accustomed to a certain way of life, the concept of being true to yourself and your bank account can be hard to accept, particularly in terms of living expenses.
As an example, if you’re looking to move from a small town in Nebraska to Washington, D.C., your cost of living will increase substantially. Research the average cost of apartments in D.C. and set a budget before making any decisions. As you look through listings, determine if location or the offered amenities are most important to you. Use CNN’s Cost of Living calculator to determine the difference in cost of housing, groceries, utilities and transportation. If living in a specific location is the priority, you may need to make adjustments to other areas of your budget.
Be Honest with Loved Ones
Relationship and social obligations can take a toll on our wallets. Weddings, in particular, are steep expenses that can cost each guest nearly $1,000 (unless you’re in the wedding party, in which case your roles require an additional set of expenses). Airfare, car rental, hotel accommodations, a wedding gift, dining out and attire add up quickly.
If you don’t have hundreds of dollars at your disposal, put yourself (and your financial health) first. Make it a personal rule to not attend out-of-town weddings and be honest with the bride and groom for why you RSVP’d no. A 33-year-old Washingtonian who practices this policy told the Washington Post that none of her friendships have been ruined. Kindly send a card and gift, but don’t create more debt for yourself to avoid an awkward conversation.
Don’t Try to Keep Up with the Joneses
Sometimes the solution to better financial health may seem like it’s to earn more money. There’s always room for more, especially if you compare yourself to family, friends, co-workers, even acquaintances and strangers on social media. Trying to “keep up with the Joneses” may only leave you burnt out and penniless.
Remember, their wealth is a perception through your eyes, and you don’t see the dark realities that may exist, like stacks of bills and growing debt. The “My Money” blog by U.S. News reminds us that financial security impacts happiness, not necessarily “stuff.” Someone will always have more and better than you. It’s your choice to relieve yourself of the pressure and set personal financial expectations without any external influences.
Determine what is most important to you. Maybe going out with friends is what makes your week bearable. If it’s important to you to have the newest iPhone on the day it comes out, build this purchase into your budget. Stay true to your wants and needs and prioritize your money accordingly.
This may mean you need to cut back on other things which are less important to you. If you’re not fashion-forward and don’t care to be, invest in a few basics and call it a day. If tech isn’t your thing, don’t spluge on that flat-screen TV, even if it is a good deal. Without the pressure to keep up with the Joneses, you can save your money for what you really want to spend it on.
Make Mini Commitments
Setting goals like reaching $10,000 in your savings or paying off your credit card by a certain date can actually set you up for failure. In life, unexpected expenses — a car repair or a health problem — are inevitable. Instead of setting lofty goals, make mini commitments toward better savings.
If you get overwhelmed easily with all things financial, mini goals are a good fit for you. Determine a small amount that you can have automatically transferred from each paycheck deposit. If you don’t see it in your account, you can’t spend it.
Before you make a large purchase, take time to weigh the pros and cons. Create a waiting period for yourself for non-essential purchases (two weeks or a month). This way you’ll keep yourself from impulse buying, and when you do purchase, you’ll have done the research and be confident in your decision.
Approach your savings plan like a set of small building blocks. Focus on one block at a time. Maybe you put money into an emergency fund for a few months, then switch the priority to home improvement or a vacation. Set mini goals for yourself and reward yourself when you reach them.
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