Taking Control of Your Finances
As adults we deal with money daily, yet many find it hard and struggle with their finances. The most common excuses for people are by the reasons of “I just don’t understand. I don’t make enough. The economy is terrible now. Money is the root of all evil. I will think about retirement funds in X years.” In fact, the term “evaporating money” came about by the concept that money just magically disappears with you having no idea where it went. I mean you most definitely did spend it anyhow, am I right?
Whether it’s because the economy is in a recession, things are getting too expensive to get by, or thinking that money is not to go hand in hand with spirituality. You have to stop playing the victim card. Money will not make you fulfilled, but it does play an important part in our lives. Humans are irrational creatures and you are not as rational as you think you might be. We are inherently emotional, and our preconceived notions and beliefs often distorts reality. If humans are indeed rational, government adding taxes on cigarettes would have deter all smokers.
“You do not rise to the level of your goals. You fall to the level of your systems.” ― James Clear, Atomic Habits: An Easy & Proven Way to Build Good Habits & Break Bad Ones
The Psychology of Starting
The hardest part of doing anything is to start doing it and knowing where to start helps. To manage and keep your finances under control isn’t about investing 5k immediately in a share only to find yourself selling at a loss weeks later as you have an emergency need and ran out of funds. It isn’t about saving 50% of your income in one month only to find yourself in debt the next month as you went on a shopping spree. It is about fighting the urge to run fast and planning for the long run ahead.
When you incorporate small changes and make it a habit, it becomes a system that you can fall back to. A day becomes a week becomes a month. If money management is something foreign to you, start first by understanding your expenses. Commit to only tracking one bank account (works the same for credit card or cash) that you use most frequently. Have the expenses allocated into simple categories that can be summarized into a one pager.
The next step is to commit a time that is specifically dedicated to reviewing the expenses. If you think a weekly review is too demanding, opt for a fortnightly or monthly review. Once you have this routine in place, commit an extra 10 minutes each time to read and learn more about financial literacy. As a beginner, aim to increase the frequency rather than duration as this will allow you more time to reflect and improve thought process. Once you are comfortable with the system in place, you can slowly increase the duration of each session.
Get a clear mindset, take actions and above all, do not lie to yourself.
