Five Tips to Improve Your Relationship with Money

Let’s talk finances…

You may love them, hate them, or fall somewhere in between, but in a country where 77% of households have some sort of debt, and the average debt per adult is $58,604 (source), finances are certainly a topic that is under addressed.

Many people are not raised with a lot of knowledge around finances and how to manage them well. While I am thankful that from the time I was little, I was instilled with the importance of both giving and saving a percentage of all my income, I have certainly had to work hard to obtain knowledge about smart financial habits that allow a household to thrive rather than just get by. It takes trial and error to determine your individual path forward on the road of financial literacy, and having guidance along the way it invaluable. While we can all understand the simple concept that taking on debt is bad and having a savings is good, it is easy to fall into the trap of living beyond your means. Setting yourself up for a successful financial future will require some lifestyle changes and creativity.

My best advice:

If you want to improve your financial literacy and relationship to finances, but are uncertain of how to start, you are in the right place. I have been in a years long pursuit of knowledge on the topic of wise financial management, and today I will be sharing with you my favorite simple money tips that are sustainable for the long term and will set you up for financial success.

Tip #1: Know your financial situation.

As the saying goes, “Knowledge is power.”

Many people avoid taking a comprehensive look at their financial situation because of fear of what they will find. This is probably the worst thing one can do; if you do not know where you stand financially, there is very little chance that you can make actual progress in kicking debt, saving money, or improving your financial situation.

The first step to getting a grasp on your financial standing it to keep tabs on where things stand. To stay in the know, I recommend making a habit of performing a monthly financial check-in. I usually do this around the first of the month.

A financial check-in consists of taking a look at all of the household’s incoming and outgoing expenses, checking statements, and taking note of expenses for the month. This is also a great opportunity to make any payments that are due, tithe, and monitor the previous month’s income so that the budget can be adjusted accordingly.

Tip #2: Learn your budget.

Whether you have failed or succeeded in following a budget in the past, having at least a loose understanding of what you can spend within your means keeps you in alignment with your goals and is pivotal in establishing financial literacy. I have personally never been successful in strictly budgeting every dollar of income, but I do set and stay aware of my targeted amounts for spending in each area. This keeps me conscientious in my finances and protects me from overspending.

My method for a very basic budget is to write out all monthly expenses that are required: rent, bills, gas, groceries etc.; all non-essential expenses: shopping, entertainment, dining out; all savings goals; and all monthly income. Take a look at your bank statements or utility accounts from the last few months to get a realistic perspective. Then, compare the spending and saving goals with the income, adjusting the budget as needed to create general guidelines that aligns your spending with your goals in a way that is attainable and sustainable. If your spending exceeds your income, then it is clear that a change is required.

Tip #3: Find satisfaction in where you are.

It’s easy to get stuck in a cycle of dreaming that one day you’ll have all the money you could ever want; it’s also easy to get caught in the trap of needing to buy more, do more, or see more to feel that you are fulfilled. However, we don’t need to buy into the consumerist mentality that is sold on every street corner. Having enough begins with realizing that you have enough, as odd as that may sound. Do you have clothes to put on? Do you have a roof above your head? Do you have food to eat? Then, you do, in fact, already have enough. Even if you have none of that, but you are in this moment living and breathing, then for the time being you also have enough (but you might want to figure out some dinner and clothing soon).

The ability to find satisfaction in where you are in life, no matter whether you have a little or a lot, will save you from creating issues of overspending and overworking, and allow you to focus less on the amount of money or things that you have and more on stewarding those things well.

Tip #4: Be prudent in your spending.

Being prudent with regard to finances means acting with consideration for the future. As a society, we have a tendency to embrace a mentality of living only for the moment. While I certainly believe that being in full presence in life’s moments is vital, I think that doing so goes hand in hand with embracing prudence in your decision making, as this sustainably supports your ability to continue to choose presence in all of the life you will live. Therefore, prudence with regard to finance is of the utmost importance as it establishes a foundation of financial awareness that lasts a lifetime.

Some good ways to start practicing financial prudence in daily life are:

Waiting to purchase something until you can invest in a quality item that will last, without taking out debt to do so, rather than buying something cheap that will need replacing.
Spending money on items that are reusable, and will thus save money in the long term, rather than items that have a lower upfront cost, but cannot be reused.
Planning ahead in both small things, such as bringing food or planning meals to avoid spending on takeout; and bigger things, like saving for a house or car.

Tip #5: Be willing to put in the work.

One of my generation’s biggest issues today is that we want it all, but we don’t want to work for it. Sure, it sounds nice to have lots of money without expending effort to obtain it, but the reality is that, even if life worked that way, it would probably never feel like enough.

Putting in work and effort to obtain the income you need to live in the way that you choose is valuable, and makes that income all the more valuable to you. I find that often the ones who obtain wealth without having to put in effort (such as lottery winners or children of wealthy families) tend to be flippant with their money, spending, and even their job. This can result in them quickly losing one or all of these things. However, when we choose to put in effort, to work hard, to spend the extra time and go the extra mile, that is when the money we earn for doing so becomes truly valuable.

If you want to succeed financially, then you have to work to improve your financial habits, you have to work to get out and stay out of debt, and you have to work to bring in an income that can satisfy your financial requirements. There’s just no way around it. The sooner you are willing to put in the work necessary to accomplish your goals, financial or otherwise, the sooner you will accomplish them.

I hope these simple tips help you to find areas in your life that you can make efforts to improve your financial situation in a sustainable fashion that can benefit you and generations to come.

What are your best tips for financial success? Do you love money or hate it? I’d love to hear from you, leave a comment down below and let me know.

Simple Sustainable Sovereign