Yahoo Finance 7 Money Habits to Improve Your Spending Skills and Stop Wasting Money
If you want to improve your relationship with money, start by changing your habits. Consider how often you make impulse purchases or struggle to stick to a budget.
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Next, imagine the financial goals you can achieve by knowing exactly where your money goes each month, having a solid savings plan and practicing the right kind of mindset. The difference is huge, but you can’t get there if you don’t put in the work. Here are seven strategies to help you strengthen your relationship with money.
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Get Comfortable With Delayed Gratification
Tom Holtam, vice president, senior regional delivery manager at UMB Bank, said that one of the most important aspects of having a positive relationship with your money is to become disciplined in your spending.
“When you identify something that is nice to have, take some time before making the purchase,” he said. “Your feelings may change during this time; meanwhile, you may have allowed your money to earn more and work for you.”
Create a Monthly Budget
“Map out your monthly budget — and stick to it,” said Holtam. “Having a budget in place will help you see where your money is actually going and tells you what you can spend each month between the nice-to-have and the need-to-have.”
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Create and Implement a Savings Plan
Holtam said that it’s ideal to have between three to six months of your monthly expenses in a savings account that you don’t regularly access.
“Having this protects you in case of an emergency and can provide some wiggle room as you work on your budget,” he explained.
Learn To Practice Financial Mindfulness
“While different types of bank accounts, credit and lending options are all part of a solid financial foundation, financial mindfulness is much more personal,” Holtam said. “It’s an important tool that can help guide your financial strategy throughout your life.”
He said that the essential first step to financial mindfulness is to determine the type of life you want to live.
“To find your lifestyle fit, try this exercise: Look honestly at your current job and the salary or wages you’re being paid,” he suggested. “Then, think about what is going to make you happy — whether that is in the short-term or years down the road. Then, using your budget outlined, find what is left over for your vision of a life that would make you happy.”
Holtam laid out the following example: “If traveling brings you joy, you may be willing to cut costs on groceries and other variable expenses to afford plane tickets and hotels. In contrast, if you’re a homebody who loves to cook, your budget for groceries may be significantly higher each month.”
Depersonalize What You’re Feeling and the Moral Attachment to Money
Nicole Stanley, owner and head money coach at Arise Financial Coaching, said that one of the most powerful mindset shifts you can make with your personal finances is realizing that every financial problem is fixable.
“Take a step back and see your financial challenges as external problems,” she suggested. “Your worth does not revolve around money. Your debt does not make you a ‘bad’ person. Your past money mistakes do not define your financial future. Remember: anything that happens to you financially is fixable.”
Adopt an Attitude of Gratitude
Stanley posed the question, “When money leaves your hands is it with reluctance, or are you able to spend it with gratitude?”
She explained that half of money management is spending it, and suggested that instead of automatically having a negative reaction to spending it, you should attempt being grateful for what you’re spending it on, even if it’s “boring.”
Here are some mantras to keep in mind in order to be grateful, according to Stanley:
I’m grateful to pay my rent, because I have a safe home.
I’m grateful I paid for this checkup, because now I know I’m in good health.
I’m grateful I got a full tank of gas, because I can make it to work reliably.
“Infuse gratitude into your spending,” she said. “You’ll find you have a different, more positive relationship with money.”
Budget for the Worse-Case Scenario
Stanley said that most people budget with the best-case scenario in mind. She said that instead, you should shift to budgeting for your worst-case scenario.
“For example: what was your highest energy bill this year?” she said. “Try budgeting that figure each month for your electric bill.”
Stanley said that by using this budgeting strategy, you can accomplish the following two things:
“When you pay the bill and it’s lower than the worst-case scenario you planned for, you’ll feel a sense of financial abundance,” she explained. “You paid less than what you planned.”
“You will have a rush of dopamine to your brain, because you’re not living in a state of lack. You’re preparing for the worst already and are benefitting from being under budget.”
Use these tips to improve your relationship with money, and you may just find that other relationships in your life will also improve.
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This article originally appeared on GOBankingRates.com: 7 Money Habits to Improve Your Spending Skills and Stop Wasting Money
