The path towards financial stability is rough since the future is uncertain. You won’t know what’ll happen next until you get there. This also affects your spending habits and your ability to save up money in the future.
It’s not enough to just live from one paycheck to the next. You need to think about your long-term goals and how you want to live your life in the future. Don’t worry if you don’t know where to start on this journey to financial literacy. We got you covered here at Slide Up.
Browse through the website and this article to understand how you can manage your finances the easy way!
Why do you need to practice financial management?
Money makes the world go round and that shouldn’t be taken as a negative mindset. There’s truth to that statement because you can’t survive without having a stable source of income.
This is where financial management comes into play. You need to be smart about your spending habits so you can have a cushion just in case a rainy day comes. Moreover, you also have to secure your financial standing in the long run so your future self can live comfortably.
The goal is to do all the hard work while you are young, energetic and inspired. Once you’ve laid down the foundation to be financially stable, your older self will thank you for it.
The right attitude to adopt when managing your finances
There’s a right attitude that you need to embody when managing your finances. It isn’t simply having a positive mindset to achieve your goals. This is more about following through with your strategies to get to the pinnacle of your success.
Here are some tips on how you can set your mindset to the right attitude when it comes to your finances and spending habits:
Never compare yourself to others’ financially
Comparison is never healthy, especially if it’s fuelled by negative emotions. Just like what American poet Max Ehrmann said in his poem Desiderata that if you compare yourself with others, you will become vain or bitter because there’s always a person that’s greater or lesser than yourself.
This rings true even in your financial standing. Everyone has different experiences and paths towards success. Comparing yourself to their success isn’t only unfair to you but it’s also a toxic mindset that would bring you further down.
Your journey to financial stability is valid and is customised on what your experience and class standing is. Struggling doesn’t make you any less of a person because everyone experiences a similar journey.
Start thinking about yourself
Make yourself the number one priority in your life. Yes, some people rely on your financial and emotional capabilities but that doesn’t mean that you should put their needs ahead of yours.
Think about your needs when setting up a budget. Even if it’s a small portion of your salary, you deserve to dedicate it to little luxuries that will make you happy. This can help make you feel motivated to strive even better in life.
Always be thankful for what you have
Gratitude changes your perspective drastically. It’s okay to demand what’s rightfully yours but you also need to be thankful for the things you have. Not only will this help you feel content with your life but it can also give you peace of mind as you go through your journey to financial stability.
Practice good habits
It’s important to give yourself joy every once in a while but overindulging won’t lead you anywhere near to financial stability. Practising good spending habits will help you gradually gain your footing when it comes to your finances. This will also prepare you for what lies ahead in the future whether it be good or bad.
Set a budget for your happiness
Living your life to the fullest doesn’t mean you have to get all the materialistic things that are trending in social media today. Your happiness is also affected by your life choices. Whether it’s investing for your future or ensuring your health, these factors should be part of what makes you happy in the long run.
Aside from that, you should also give yourself luxurious purchases once in a while. These may either be things that you need that you’re too afraid to purchase for yourself or things that you’ve wanted for a long time.
However, make sure that you understand the difference between rewarding yourself for hard work and overspending.
Forgive yourself for financial mistakes of the past
Every person will commit a financial mistake at least once in their life. Although it can be devastating when it happens, you need to forgive yourself and learn from those mistakes. This way, you won’t delve too deeply into it thus helping you recover and move on.
Spending huge amounts of money on something you need isn’t considered a financial mistake. Know the difference between something that sets you back from the financial decisions that made your life more liveable.
Tips to improve your financial stability
Learn how you can be financially stable at a young age when you follow these tips below:
Set up a monthly budget
Most of the time, your salary drops monthly. This allows you to make the necessary planning on how you can spend your money properly. There’s a limit to your payslip so it’s best to make the most out of it by setting up a monthly budget.
Organise your finances by compiling all your expenses and categorising them according to importance. Your bills and other necessities should come first before anything else. This way, you won’t necessarily spend your money on non-essential things.
Track your spending
Every time you withdraw money from your bank account should be recorded accordingly. This goes to your purchases as well. You need to track how much money you spend so you won’t go over budget on other things.
One of the best ways to do this is by setting aside your savings so that you won’t accidentally spend it on something else. Moreover, once you’ve set aside your savings, divide the remaining money into your necessities.
Live within your means
Celebrities and influencers showcase gorgeous lifestyles on social media. They make it appear as if they are living the dream. However, this kind of lifestyle is expensive and necessary. You have to consider how much you are earning to know how you’re going to enjoy your life without compromising your survival.
Living within your means does not mean that you have to strictly be frugal. This just means that you have to consider how much you are earning before you spend on unnecessary things. You can still enjoy life to the fullest if you know how to be smart about it.
Budgeting your expenses comes in handy when you’re establishing your lifestyle. This just means that you can set aside enough money to spend for yourself.
Avoid borrowing money
Unless it’s an emergency, never borrow money from other people. This includes funding luxurious purchases such as devices, clothes and other non-essential items, especially if you still have working items.
Developing a habit of borrowing money can push you downward into debt. It’s hard to recover from that, especially if you don’t have a good stream of income.
There’s also a social impact in constantly borrowing from people. This can isolate you from the people that care about you, especially when you don’t pay your dues.
Organising your budget and living within your means can help you avoid constantly borrowing money just to get by. This also helps you save up for a rainy day.
Learn more about financial literacy
Arming yourself with ample knowledge about financial literacy can help save your life and future. It doesn’t mean you need to take courses on investing and business. You just have to research how you can maximise the money you have so you can stay afloat.
Tons of resources are available on the internet that’s just one search engine away. Make use of this, especially since most of these resources are free.
Financial literacy can also help establish your money in the long run. It’s not about earning tons of money but more about how you can sustain your lifestyle without running into debt. Moreover, it will also help you learn how to save up for your future even with the current salary you are earning.
Know what your short-term and long-term goals are
When learning how to manage your finances, it’s important to consider your long-term and short-term goals. This will help you categorise and plan your strategy for the future.
Long-term investments include your retirement plans, real estate investments and business ventures. These are big commitments that require plenty of capital to achieve. Having a plan can help you achieve these goals faster.
On the other hand, your short-term goals can be expenses that need saving up. From vacations to expensive home equipment, these goals are hard to attain if you don’t have a good plan.