Building a healthy relationship with money requires more than simply amassing wealth or earning the highest income – it involves healing buried beliefs and behaviors as well.
Begin by carefully considering your relationship to money. Write down spending habits, values and current circumstances as you examine this data over time – this will enable you to make better financial decisions in future. Reviewing this information regularly can also assist with making more informed financial decisions.
1. Set Goals
Setting realistic goals is key to your overall health and well-being. One method of doing so may include tracking spending to better understand where unnecessary purchases may lie (even small purchases like coffee can add up!). Tracking spending could reveal any needless purchases (that $5 mocha latte may seem inconsequential!)
Setting short-term financial goals, like saving for a new phone or holiday gift, is also helpful and can give your mind a psychological boost. Achieved these smaller targets can bring joyous satisfaction.
2. Monitor Your Expenses
Tracking expenses is key to taking control of your finances, whether using an Excel spreadsheet, budgeting app or even just pen and paper in a notebook.
Track all transactions entering and leaving your wallet, cash envelope, piggy bank or credit card account each month to see where your money is going and inspire new habits such as planning ahead or using cash when shopping.
3. Create a Spending Plan
Tracking and categorizing your spending is key for understanding where your money is going and whether any adjustments could help reach your financial goals.
Start with your gross income (not net or take-home pay). Gather receipts, credit card statements and check register records as evidence of income. Next, calculate fixed expenses and flexible expenses then compare these figures against your income.
4. Make Savings a Priority
Saving and investing are important goals to set, yet it may be daunting knowing where to begin. To be successful at saving and investing, set goals that are specific, measurable, attainable, realistic and time-bound.
Starting by identifying all your fixed expenses – rent or mortgage payment, utilities bills and debt payments. Next, calculate how much can be saved each paycheck – it is crucial that we put ourselves first when managing money!
5. Create a Budget
Create and stick to a budget is the best way to assess whether or not you’re meeting your savings goals or paying down debt, whether using an app or tracking expenses manually. Doing this step before any real progress can be made is paramount to successful planning.
Begin by considering how often and how much you are being paid each month, then account for any recurring charges or other expenses that may incur.
6. Create a Spending List
Write down all your fixed expenses such as rent or mortgage payments, utilities and debt payments before adding variable expenses such as food or entertainment to the mix.
Once you have your list, begin tracking your spending using an expense tracking app or by keeping receipts. Over time, this should enable you to set specific spending limits per category; subtract this from your income to form your budget.
7. Create a Waiting List
Signing up for your waitlist is an indication of their interest in working with you and shows they are actively engaging with your content.
Keep your waitlist engaged by sending personalized emails or videos every few weeks or months – this will help them remember and trust your brand while keeping them engaged with it.
8. Create a Zero-Sum Budget
Budgeting with this method can help keep expenses and savings on track, allocating each dollar towards accomplishing your financial goals such as savings or paying off debt.
Get started by taking a close look at your monthly income and categorizing all of your spending into fixed expenses, variable expenses, charitable giving and savings accounts. Don’t forget to revisit and modify the budget as your life circumstances change over time!
9. Create a Spending Tracker
Tracking expenses using a spreadsheet is an efficient and effective way to keep an eye on spending. Finance editor Libby Kane provides this free template that tracks spending by month with customizable categories for income inputs and savings inputs.
Digit app provides another option for tracking expenses and creating reports for up to five clients, using machine learning technology to detect recurring expenses and automatically reconcile transactions against bank accounts.
10. Create a Spending Plan
Building healthy money habits begins with creating a spending plan, according to Dortch. Use this template from Dortch to break down expenses into fixed and variable categories as you learn to track purchases.
Start by listing your net income (the amount left after taxes and deductions have been taken out). Next, list all of your monthly expenses.
Add both fixed and variable expenses such as food, transportation and entertainment into the budget. Be sure to factor in any ongoing maintenance expenses.
