It would be pretty sweet to finally be someone that other people look up to because you are good with money. A lot of people continually find themselves wishing they had a better habit when it comes to money, but they just can’t change their everyday actions. Well, here is the good news: you can transform your money habits and become good with money.
People are not inherently bad or good with their finances. But we have bad and good practices when it comes to our finances, and that is what makes the difference between individuals who seem to manage their finances well and individuals who are always struggling when it comes to their finances.
Instead of feeling like you have to beat up or change yourself for what you think are shortcomings or weaknesses, you can simply focus on improving your money habits. Good habits do take a lot of effort and time to build, and it is not that easy to change human behavior. But even if it is hard, it is still possible, to do with you put your heart and mind to it. Listed below are some activities people can do to build better financial habits in 2020.
To find out more about money and the psychology behind it, check out https://www.forbes.com/sites/prudygourguechon/2019/02/25/the-psychology-of-money-what-you-need-to-know-to-have-a-relatively-fearless-financial-life/#2b11d505dfe8 for more information.
Assess recent transactions
It is hard to build good money habits when the necessary actions to do it seems like not enjoyable at all. Take budgeting, for instance, or spending less. Budgeting is an excellent way to track and manage your money. It can help with achieving people’s goal of spending less.
But most individuals associate both habits with being losing out or deprived of something, even not getting enough of what they really want. If people feel that way when it comes to financial habits, there is not much motivation in your body to develop. That is why financial experts share this exercise with their clients to help them manage their finances without feeling stripped or deprived – like they cannot spend their cash on things that they want. Listed below are some ways to do it.
People need to pull up their credit card and bank transactions from the last three months and go through every line item to:
Highlight in yellow all the things of value, but do not feel incredibly excited about.
Highlight in green the spending of value, and that makes them feel good.
Highlight in red anything that makes them a little regretful or cynical about.
Identify the purchases that are highlighted in red. These are items or things people avoid spending their money on since these items do not bring value or things that they regret spending money on. It is an easy way to remove or eliminate what is not worth the cost.
To know more about account history, click here for more details.
The next thing to do is to take a closer look at the things highlighted in yellow. These items are harder to take care of because these things might be pretty substantial, but they are not the essential items in people’s spending. It is why these types of exercises every three to six months can help people get a good look and understanding about their spending habits, as well as how and where they spend their cash that makes them fulfilled or happy.
As people do this regularly, they might get a clearer picture of the items that are highlighted in yellow could be put in the category highlighted in red. Individuals might also solidify their understanding of their priorities, which can be a big help when making better financial decisions in the near future.
And lastly, doing this activity even once is an excellent way to bring in awareness of their spending. Awareness is a vital key in building a better financial habit. If you want to find out more about financial practices, click here for more information and details about this subject.
Do not willpower your way to attain success
There are a lot of aspects in life that require better discipline to reach a particular accomplishment or goal. Building good financial habits is undoubtedly one of the elements of life. Individuals who succeed in establishing new and improved habits are not necessarily people who resist the temptations that cause them to steer off their course.
Very disciplined individuals used to be the same people who do not have a lot of temptations or distractions to deal with in their path to success. It is not that they are better at turning down cakes when they are trying to lose some weight. It is that they do not put themselves in situations where it will require them to say no to cakes in the first place. Maybe they can avoid places that sell cakes so it cannot tempt them.
It is not that they are far more superior in forcing themselves through a series of hard exercises at five in the morning when they are trying to get fit or get stronger. It is that they remove a lot of friction from the process of waking-up-early-and-go-to-the-gym as possible and make sure to automate as much as they can. Instead of relying on sheer willpower, try to manipulate your environment, your routine, or your schedule so that you do not have to engage directly with a lot of temptations and distractions that can make you lose your focus.