Financial success is all about making your money and using it in ways that help you build wealth. This simple strategy, however, becomes complicated for millions of people which explains why most of them struggle with money. If you have been struggling financially, there are tips you can use to be good with money.
You did not come on this earth only to struggle financially and live a miserable life. You have a purpose and chasing money is probably not that purpose. In order to fulfill your dreams no matter what they are, you must figure out ways to take care of money problems first. Money is not the answer to every problem but most problems have something to do with money.
The question is: How can you be good with money in an era where everything around you is designed to take it away before you even make it?
The answer to this question is what I will be discussing with you in this article.
Interesting money tips to keep in mind before you learn about how to be good with money
- Money does not have emotions, does not care about who owns it, or how you spend or save it.
- If you choose to make it work for you, it will work for you. Matter of fact, money is the greatest employee. Your money can work 24/7 and 365 days without complaining. Let me know if you find another employee who can do that.
- Savers are losers, just like Robert Kiyosaki said in his famous book: “Rich Dad Poor Dad”. You should read it. It is one of the best personal finance books ever written by a human being. I am not being paid to tell you this. My goal is to help you succeed with resources that I know they work. If you can turn your life around, then I would have achieved the goal of this website, my goal.
- You cannot build wealth through savings alone. Saving is one of the steps you must take when building wealth.
- Millions of people are struggling financially and you could be one of them if you are not careful. Millions are also being rich every day and you can be one of them if you take action.
- The only way to make money is to let go of the money you have. Even if you put your money in a piggy and hide it somewhere, inflation will eat it slowly. According to the U.S. Bureau of Labor Statistics, the inflation rate is currently at 7.9%. This rate is higher than the average returns you will get from many investments including long-term government bonds which are between 5% to 6%, according to CNN. Did you know that you could buy a brand new car with only a couple of grand many years ago? Today, you cannot even buy tires with that amount! Money loses value and if yours is not being used to make more, you will lose it.
How to be good with money?
This is not a new question. Millions of people have asked this question before and it seems like it never gets answered. Or maybe people never get it. Being good with money have nothing to do with education. So, if you were thinking about going to school, forget about it. Your education level has nothing to do with how you handle money.
According to Debt.org, the amount of debts Americans owe increases in relation to their education levels. People with less than a high school diploma owe around $30,784 on average whereas people with doctorate degrees owe $97,916 on average. The more education you get, the more debt you carry. Carrying debt does not mean you are bad with money. But it does not mean you are good either.
Struggling financially has nothing to do with how much you make. There are thousands of people with high incomes, and yet, are struggling financially.
So, what is missing? Is it possible to be good with money regardless of your income level, education, gender, ethnicity, etc? Yes, you can be good with money and it all starts with habits and tips I will share with you in a few minutes.
Without further ado, the following are 6 tips to help you turn your life around and be good with money.
1. Manage your money through budgeting
If you thought that I was going to start with something other than budgeting, I have to apologize. A budget is probably the greatest tool to help you manage your finances and avoid costly financial decisions.
With a budget, you decide where your money goes and how much. If something that is not in the budget comes up, you act like you did not see it.
What if it is an emergency? Then you use the money you saved in your emergency fund. That is why you have it. If you don’t have an emergency account with at least six months worth of expenses, you should start one right away. I have put together a list of tips you can use to save for emergency funds fast. This way, you will not spend a penny over budget.
Creating a budget is not writing numbers in an excel sheet and calling it good. Budgeting goes beyond this. Creating the budget is one step. Respecting and following the numbers you wrote down is an equally important step. Millions of people create budgets but fail to follow them due to costly budgeting mistakes that make it difficult to follow their budgets.
You must be stronger and better than everyone else. Know the reason you need to be good with money and create a budget that fits that specific goal. That is how you take care of your finances and be good with your money while everyone is losing it.
More budgeting tips:
- How to talk to your spouse about budgeting?
- 6 important tips to create a balanced budget in 2022
- What is budgeting and how does it really work?
- 8 Budgeting Mistakes you need to avoid at all cost
- 8 clever ways to live on a tight budget
2. Practice saving habits
The purpose of a budget is not to see if you can create rules for yourself and follow them. Instead, the budget is there to help you spend what you can afford to spend and allocate the remaining amount toward other financial purposes.
The remaining amount you did not spend each month will be your savings. Saving is so important that you will NEVER achieve your financial goals without saving money. You have got to save money starting from today if you did not start yesterday.
Why would you worry about saving mong? Before we talk about saving, let’s talk about your financial goals.
Do you want to,
- Travel the world and enjoy God’s creations without a string attached?
- Retire early?
- Stop begging your boss to take a day off so that you can take your kids to school?
- Spend time with your family?
- Live in your dream house or drive your childhood dream car?
- Make decisions you want in life without asking anyone or begging?
If the answer to any of these questions is yes, then you need to start saving. The money you save will be the foundation for these goals. After saving the money, you will figure out a way to use those savings in ways that will benefit you later. More details on how you can use those savings will be covered in a few minutes.
If you want to be good with money, reduce your expenses and increase your savings. What makes all the difference, is not how much you make. Instead, it is how much you keep that makes the difference.
Related: 20 clever ways to reduce expenses and increase savings
3. Have goals in place
Your struggle with money might not be due to a lack of a budget or savings. What you are facing is probably the lack of a financial goal. You can’t just save.
The money saved without a financial goal for it can easily be spent. The moment you see a flashy car, your mind will turn to your savings. To avoid spending your savings on random things, have a financial goal.
A financial goal is something you want to achieve no matter what it takes. Let’s assume that you want to save for a down payment and save for retirement at the same time.
In this case, your savings account should focus on allocating your savings into your retirement accounts and down payment account. This is very important. It is like every dollar has a specific spot where it must go. No cheating yourself and no emotions. It is just you and your financial goals.
This will keep spending temptations away and make you good with money just like rich people do.
Related: How to set up goals and execute them fast?
4. Create a financial plan
A saving goal also requires a plan that accompanies it. You can’t just say that you are saving for a down payment without knowing how much your 20% will be or how much you need before you retire.
Without a financial plan, You could end up buying a more expensive house, retiring without enough money to cover your expense, etc. In addition, you could not know when you have saved enough.
This is why you must create a financial plan to help you understand exactly what you want and how to achieve it step by step. Your financial plan is like your blueprint on how to achieve your goals. If you want to be good with money, start a financial plan and follow it no matter the cost.
You will be surprised at how much difference you will make in your own life without having someone to babysit you.
Related: 9 important steps to build a financial plan that works
5. Automate your money
One of the greatest ways to be good with money is to automate your funds in different accounts. Why does automation matter? Let’s take one step back.
Do you know what most people do when they get their paychecks? I know people who eat at inexpensive restaurants and drink expensive wines. That is only what I know. What about what I don’t know about?
Think of those who head straight to the mall to buy expensive jewelry! If they could purchase them on credit they would have done it two weeks before.
If you become broke the same day you received a paycheck, you are not alone. There are millions of people who do the same thing.
This is a problem of mindset and bad habits. Before you become good with money and take control of your finances, you need to come up with a winning strategy.
The good news is that I have a plan for you. You can overwhelm these spending temptations and be good with money like you are meant to be.
How to be good with money and avoid spending temptations?
Having your money in a checking account or cash in your hands can make you spend more. What if you did not have access to these funds? What would happen? The quick answer is that you cannot spend the money you don’t have.
This is where automation comes in. Automation is the process of sending funds into particular accounts as a deposit or payment automatically. To apply the same principle, your company will deposit parts of your paycheck in the accounts you specified. This way, the only thing that will come your way is what you know for sure is going to be spent. Focus on improving your methodology, and start automating your money.
6. Treat your money as your employees
This is probably one of the most important tips you must work on if you want to be good with money. You need to start making your money work for you. Sent it to work and correct returns.
What I am saying is that you must invest your money in order to be good with it. Earlier, I mentioned that money does not care who has it and who does not. It has no soul or emotions.
If you want more money, you will get it. But, you must be willing to give it up to make more of it. Sending your money to work will multiply it. That is how wealth is created. As you invest your money through different investments, you will understand it better and master it.
On the other hand, if you try to chase money and save it for life, you will never get it. You can’t save your way to wealth. The only formula that works is to invest your money and let it work for you.
It is a time that you take a break and let your money take over. The good news is that your money does not complain about working longer hours, bonuses, vacations, etc. It just works. The only way to be good with money is to let go of what you made and put it to work. You will never regret this decision.
Related: Where to invest money: An Investment guide
