A healthy relationship with money is an important component of a happy life, but owning a large amount of money is not. Concerns about finances often poison life. But the reason for this is our attitude to money, and not objective economic reality.
We involuntarily draw money into all significant spheres of life, our dreams and goals, in relations with others and security issues, and we begin to measure their own freedom and significance with them. Emotional truth, economic reality and financial freedom will help get out of the trap.
Polina is working hard, denying herself a vacation and a weekend. Its goal is to accumulate so much that you can calmly retire and spend all the time with your family: “I don’t want my children to make their way in life, like me, to be ashamed of their unfashionable clothes and wretched apartment, so that they work two jobs, paying for their studies at the university. “
She is successful in her career, but it seems to her that the eight-digit amount in her bank account is not enough. Her need for financial security is so great that she is ready to sacrifice her life values for her. But she will never have enough money to feel protected.
Emotional truth means an accurate understanding of how much money is enough, and the ability to distinguish between the desired and the necessary. There will always be more spacious apartments and more expensive cars, but if we fall into the circle of endless desires, we will never be satisfied. Nothing prevents sometimes using shopping or going to restaurants as short-term psychotherapy, but constant overeating and shopaholism are a sign of self-doubt, an attempt to solve your problems with the help of money.
Everyone can painlessly reduce their monthly expenses by at least 10%
Distinguish needs from desires. Needs are finite and desires are endless. We are sure that with big money everything will be fine with us, this is not true.
The real reason for our financial unrest is not because our incomes are too small, but because we get used to spending more than necessary. That is why many people with high incomes have serious financial problems, and most lottery winners return within five years to the financial situation in which they were at the time of winning, or even go broke.
What is your current financial situation? You, of course, know how much you earn, but do you have information about your expenses? Do you clearly understand where the money goes? Can they calculate their net worth? Financial illiteracy is not blissful ignorance. These are sleepless nights, fear of entering a PIN code, inability to find an error in a letter from the tax office.
Olga admits that “it was easier to lose 5 kg of weight and give up alcohol, it’s easier to put up with the fact that she will never have children than to learn how to manage her money,” but that changed her whole life.
Olga is a financial director, and her salary is 300 thousand rubles, but she did not know how to manage her finances.
She needed to meet with the coach in order to get to the bottom and realize: her financial situation does not depend on how much she receives, but on how much money she has left: “My expenses increased with each increase in salary, with each bonus. I calculated and found out that almost 60% of my salary was spent on things that were not needed. ”
If you spend everything you earned before the ruble, you are trapping yourself. Take urgent action to reduce costs. Each of us can reduce monthly expenses by at least 10% relatively painlessly.
According to the Public Opinion Foundation, 29% of Russian citizens have a bank loan. The most popular type of loans is consumer credit in the store (13%), followed by emergency loans: medicine, repairs, weddings, etc. (10%). Mortgage in 3% of respondents. Almost every third Russian with a small salary chronically “lives on credit.”
Obligate yourself to cross out debts, loans and loans from your life. Surely your lender listed all the benefits that you receive by borrowing money from him. But he certainly didn’t mention the price you pay for this benefit in a debt trap. As for the mortgage, it can also be planned and organized with minimal losses.
When they realized that each ruble taken in a mortgage had to be returned in a larger amount, Anna and her husband Sergey reduced all family expenses to a minimum. “We tried to pay 10-15 thousand more monthly than it was established, and if we received premiums or some other additional money, we all gave back to repay the loan,” Anna explains. “They didn’t go to the movies and cafes, they bought the most necessary things and even didn’t really repair them.”
As a result, they paid a mortgage of 1 million rubles instead of 8 years for 3 years with a slight overpayment. “I now know for sure that money does not matter much,” Anna concludes. “It’s all about discipline and self-confidence.”
Of course, at first it was not easy for Anna to limit herself to everything. But she is sure that financial freedom is worth the sacrifice in the form of depriving herself of the little pleasures that she and her husband brought in these three years. Very quickly, the benefits of your new healthy money habits become tangible, and dreams turn out to be achievable goals.
Relations with money can be called healthy when we no longer care about the idea of getting rich
The clash of emotional and economic reality is a truth that liberates. Money is just a tool, a means to an end. Financial freedom requires determining the ultimate goal, priorities. For a specific purpose, you can make a plan.
You invest money wisely, including in yourself: by developing concentration, discipline, you learn to act based on values, not momentary pleasures. These skills bring success in other areas of life, allowing you to make life choices that give a sense of freedom and security.
Relations with money can be called healthy when we no longer care about the idea of getting rich; when we know that money is not security, freedom and power. This is just money.
The source of wealth lies in the ability to value what we have, give thanks for gifts, invest wisely and share freely. Ultimately, life is the only wealth.
How to develop healthy financial habits
1. Unzip your emotional baggage. What was your first childhood experience with money? Is it connected with a feeling of pleasure or guilt, with embarrassment, with a feeling of scarcity or abundance, with some kind of fear or conflict? Awakening these memories will help you better understand your current relationship with money.
2. Look at money as a tool, not as a weapon. Draw in your imagination a picture of how you will heal if you have as much time and money as you need (and not how much you want!). It should be a clear and definite picture. For example, imagine that you devote all your time to writing a novel without worrying about income. The image must be attractive in order to motivate you to specific actions.
3. Forget that “a large sum of money would solve all the problems.” The real reason people are experiencing financial stress is not in low incomes, but because they spend too much.
4. Identify 10 regular purchases that cannot be called necessary. Among them may be daily coffee, glossy magazines, cut salads in vacuum packaging and even too luxurious a hotel in which you prefer to relax every summer. Remember that in each family there will be from 10 to 25% of optional expenses that can be safely cut back.
5. Determine what you will not do for money. Money is a valuable resource. So is our time and relationship. We are doing too much for money; try changing this balance. Suppose you do not like the job. But you do not consider it possible to change it to a less paid one in order to spend more time with your family. Try to take the first step – take one day off at your own expense every three weeks. Such small steps can lead to big changes in the future.
How to manage money
- Keep all financial papers in one place, dividing them into sections.
- Make a list of your assets and liabilities, keep records of income and expenses.
- Pay bills on time.
Get out of debt
- Get help from a financial coach.
- Pay off debts with a high interest rate first.
- Save only one credit card for emergency use.
To save money
- Cut costs from 10% to 40%.
- Save money in proportion to income. Start with one percent and increase the percentage of savings by one percent per month throughout the year.
- Create a cash reserve in the amount of two to three monthly expenses.
- Do not allow yourself to increase expenses while increasing income. Transfer additional profits to a savings account.
- Get a notebook in which you will write down everything you spend during the month. It is a motivator for the formation of new habits.
About the author: Janey Haul – psychologist, business consultant, financial coach.
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