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How to Align Your Personal Values and Your Financial Wealth

How to Align Your Personal Values and Your Financial Wealth

Something I must confess here! I am emotional eater- whenever I feel emotional, due to any reason, I eat. And I eat out. Eating out cost us money, meaning I can easily bust my budget just because some idiot has pushed me into any sort of emotional drama.

We all, at some point in time, spend just because we feel emotionally charged. To come back to our normal self, we engage into certain external distractions such as eating out or going for movie or even taking a walk outside to get some fresh air.

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Who you are from inside?

Just like we ordinary folks spend money on our emotions, so do the super-rich. I was recently reading about Minecraft owner’s parties in his expensive mansion. He said that he had never felt so isolated in his life as after selling Minecraft to Microsoft. There are other stories like him to where celebrities spend so extravagantly and for many work is the only option left to support their lavish lifestyle.

Are they financially free? I don’t think so because the day, someone like Mayweather stops fighting, he may no longer be in a position to maintain this lifestyle. One wonders why so successful and not so successful people show such irresponsibility when dealing with money and can’t balance their emotions.The answer lies in a simple fact of life! This simple fact is who you are from inside?

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You know, to feel yourself worthy from inside is as important as you feel yourself worthy in your external world. Having a clear sense of self-worth and importance to one’s self is key factor to live a balanced and more fulfilled life- a life which is balanced on all fronts i.e. financial, healthy, relationships and of course our spiritual side.

Externals vs Internal

Let me also make another confession here- I have been victim of what is called keeping up with joneses. I bought every new model of iPhone and Samsung. I was just crazy about them and I paid the price.

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It often happens that our external and internal values differ- this is the result of an internal vs external clash. Externals can push us to spend on things which we later regret however, if internally we feel self-worthy, buying anything would not have a particular value for us. However, if our self-worth or self-esteem is externally directed, we are surely going to spend as much as we can, just to make sure we keep up with joneses.

Values vs numbers

Most often, it is numbers which drive your financial planning process. You prepare excel sheets, buy software or use online tools to crunch numbers- just to see how much you will need to be completely financially free. If you are following this approach, you are clearly failing to address really important issues which go hand in hand with numbers.

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Carl Richards, in his book ‘One Page Financial Plan’ narrated the story of a working woman who was earning a handsome salary, but wanted to be financially free to have a family. This is a great example of giving any financial planning process a more human touch. Having a strong personal reason to plan for secure and successful financial future is as important as drinking water.

Unless one can connect the dots between personal values and numbers, financial planning as a way to achieve financial freedom, pay debts, control expenses, plan for retirement etc. will simply fail. Personal values and why you need money (except off course to fulfil your daily survival needs), are important links to be determined before anyone starts to plan for a secure financial future.

Ask yourself tough questions of why you need money? What are some of your personal values which you believe can only be fulfilled or achieved if you have money?

Featured photo credit: pixabay.com via pixabay.com

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Adnan Manzoor

Data Analyst & Life Coach

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Published on November 20, 2018

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The truth is, there are many “money saving guides” online, but most don’t cover the root issue for not saving.

Once I’d discovered a few key factors that allowed me to save 10k in one year, I realized why most articles couldn’t help me. The problem is that even with the right strategies you can still fail to save money. You need to have the right systems in place and the right mindset.

In this guide, I’ll cover the best ways to save money — practical yet powerful steps you can take to start saving more. It won’t be easy but with hard work, I’m confident you’ll be able to save more money–even if you’re an impulsive spender.

Why Your Past Prevents You from Saving Money

Are you constantly thinking about your financial mistakes?

If so, these thoughts are holding you back from saving.

I get it, you wish you could go back in time to avoid your financial downfalls. But dwelling over your past will only rob you from your future. Instead, reflect on your mistakes and ask yourself what lessons you can learn from them.

It wasn’t easy for me to accept that I had accumulated thousands of dollars in credit card debt. Once I did, I started heading in the right direction. Embrace your past failures and use them as an opportunity to set new financial goals.

For example, after accepting that you’re thousands of dollars in debt create a plan to be debt free in a year or two. This way when you’ll be at peace even when you get negative thoughts about your finances. Now you can focus more time on saving and less on your past financial mistakes.

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How to Effortlessly Track Your Spending

Stop manually tracking your spending.

Leverage powerful analytic tools such as Personal Capital and these money management apps to do the work for you. This tool has worked for me and has kept me motivated to why I’m saving in the first place. Once you login to your Personal Capital dashboard, you’re able to view your net worth.

When I’d first signed up with Personal Capital, I had a negative net worth, but this motivated me to save more. With this tool, you can also view your spending patterns, expenses, and how much money you’re saving.

Use your net worth as your north star to saving more. Whenever you experience financial setbacks, view how far you’ve come along. Saving money is only half the battle, being consistent is the other half.

The Truth on Why You Keep Failing

Saving money isn’t sexy. If it was, wouldn’t everyone be doing it?

Some people are natural savers, but most are impulsive spenders. Instead of denying that you’re an impulsive spender, embrace it.

Don’t try to save 60 to 70% of your income if this means you’ll live a miserable life. Saving money isn’t a race but a marathon. You’re saving for retirement and for large purchases.

If you’re currently having a hard time saving, start spending more money on nice things. This may sound counterintuitive but hear me out. Wouldn’t it be better to save $200 each month for 12 months instead of $500 for 3 months?

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Most people run into trouble because they create budgets that set them up for failure. This system won’t work for those who are frugal, but chances are they don’t need help saving. This system is for those who can’t save money and need to be rewarded for their hard work.

Only because you’re buying nice things doesn’t mean that you’ll save less. Here are some rules you should have in place:

  1. Save more than 50% of your available money (after expenses)
  2. Only buy nice things after saving
  3. Automate your savings with automatic bank transfers

These are the same rules that helped me save thousands each year while buying the latest iPhone. Focus only on items that are important to you. Remember, you can afford anything but not everything.

How to Foolproof Yourself out of Debt

Personal finance is a game. On one end, you’re earning money; and on the to other, you’re saving. But what ends up counting in the end isn’t how much you earn but how much you save. Research shows that about 60% of Americans spend more than they save.[1]

So how can you separate yourself from the 60%?

By not accumulating more debt. This way you’ll have more money to save and avoid having more financial obligations. A great way to stop accumulating debt is using cash to pay for all your transactions.

This will be challenging, depending on how reliant you are with your credit card, but it’s worth the effort. Not only will you stop accruing debt, but you’ll also be more conscious with what you buy.

For example, you’ll think twice about purchasing a new $200 headphone despite having the cash to buy them. According to a poll conducted by The CreditCards.com, 5 out of 6 Americans are impulsive spenders.[2]

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Telling yourself that you’ll have the discipline to not buy things won’t cut it. This is equal to having junk food in your fridge while trying to eat healthy–it’s only a matter of time before you slip. By using cash to make your purchases, you’ll spend less and save more.

A Proven Formula to Skyrocket Your Savings

Having proven systems in place to help you save more is important, but they’re not the best way to save money.

You can search for dozens of ways to save money, but there’ll always be a limit. Instead of spending the majority of your effort saving, look for ways to increase your income. The truth is that once you have the right systems in place, saving is easy.

What’s challenging is earning more money. There are many routes you can take to achieve this. For example, you can work long and hard at your current job to earn a raise. But there’s one problem–you’re depending on someone else to give you a raise.

Your company will have to have the budget, and you’ll have to know how to toot your own horn to get this raise. This isn’t to say that earning a raise is impossible, but things are better when you’re in control right? That’s why building a side-hustle is the best way to increase your income.

Think of your side-hustle as a part-time job doing something you enjoy. You can sell items on eBay for a profit, or design websites for small businesses. Building a side-hustle will be on the hardest things you’ll do, be too stubborn to quit.

During the early stages, you won’t be making money and that’s okay. Since you already have a source of income, you won’t be dependent on your side-hustle to pay for your expenses. Depending on how much time you invest in your side-hustle, it can one day replace your current income.

Whatever route you take, focus more on earning and save as much as possible. You have more control than you give yourself credit for.

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Transform Yourself into a Saving Money Machine

Saving money isn’t complicated but it’s one of the hardest things you’ll do.

By learning from your mistakes and rewarding yourself after saving you’ll save more. What would you do with an extra $200 or $500 each month? To some, this is life-changing money that can improve the quality of their lives.

The truth is saving money is an art. Save too much and you’ll quit, but save too little and you’ll pay for the consequences in the future. Saving money takes effort and having the right systems in place.

Imagine if you’d started saving an extra $100 this next month? Or, saved $20K in one year? Although it’s hard to imagine, this can be your reality if you follow the principles covered in this guide.

Take a moment to brainstorm which goals you’d be able to reach if you had extra money each month. Use these goals as motivation to help you stay on track on your journey to saving more. If I was able to save thousands of dollars with little guidance, imagine what you’ll be able to do.

What are you waiting for? Go and start saving money, the sky is your limit.

Featured photo credit: rawpixel via unsplash.com

Reference

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