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How to Stop Letting Your Money Control You

How to Stop Letting Your Money Control You

    Money is a mystery to many people and when I got out of college I was no exception. I knew I made a decent wage and I could afford to live but I never seemed to have any extra at the end of the month. When a large, unexpected expense would arise, I was sent running to my parents…or to my credit card. I had no control of my money; it was controlling me.

    To control your money, you have to ask yourself a simple question: Where is my money going? Once you begin to understand where the money goes, it’s easy to track and manage it.

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    Where is my money going?

    The first step is to figure out where your money is going. All of your money goes to one of two places: fixed expenses or variable expenses. Your fixed expenses are going to be things like rent, utilities, student loans, insurance and car payments. These expenses are the same amount every month and ongoing.

    Variable expenses are everything else like groceries, restaurants, clothing and entertainment. All of these things can be planned and controlled.

    One of the best things you can do to control your money is to create a Bills Calendar. Since I use Google Calendar, I made a new calendar called “Bills” and added all of the fixed expenses for the month. (Don’t forget any yearly expenses like Amazon Prime or XBOX Live, for example.)

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    How do I control my money?

    Now that you know where your money is going, you can control your money with a budget. Yes — budget is a scary word. It was for me too.

    Start with looking over your bank statement and listing all of your expenses for a month. Similarly, if you use Mint, this becomes even easier. Make a note of the categories you’re spending money and how much you’re spending each month. It’s good to look back at least 3 months, but the longer you look back the better idea you’ll have of what you’re really spending each month.

    Next, find one of the many budget templates available online and fill it out. You won’t use every category, so just you what applies to you.

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    The biggest misconception I had about budgeting was that once I set it up, I had to live by it to the cent. A budget is a living document. It is meant to be updated and corrected until it is a true representation of what you’re spending. I review my budget every other month and make corrections as needed.

    Automate your money

    When you’re living paycheck to paycheck, the idea of Billpay is scary because you never know if you’ll have the money for the payment when it’s due. Now that you control your money, Billpay can save you money and stress.

    Many bill payees (such as auto insurance and student loans) will give a small discount if you sign up for their auto payment system. In addition, if you know your fixed expenses are taken care of, you will never pay another late fee again.

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    Now that your bills are under control it’s time to pay yourself. When you’re 21, the idea of retirement is a lifetime away. You don’t see a need for savings or a 401k or anything your parents worry about. But it’s never too early to start saving.

    Pay yourself

    I look at my savings account as paying myself. Sure, I get a paycheck from my job, and I “give” a lot of it away. But I need to keep some of that money for my “future self”. I need to have money for car repairs, medical bills, or even a new computer or vacation.

    I cannot emphasize how much less stressed you’ll feel when you start paying yourself and helping out your “future self”. Take a percentage of your paycheck and put it into savings automatically. You can set up a recurring transfer with your bank to move money into savings every paycheck, or you can set it up through direct deposit with your employer if you use a different bank with a higher-interest savings account.

    (Photo credit: A Calculator and Statistics via Shutterstock)

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    Last Updated on January 21, 2020

    How to Develop a Millionaire Mindset in 6 Simple Steps

    How to Develop a Millionaire Mindset in 6 Simple Steps

    We all like to dream about being financially wealthy. For most people though, it remains a dream and nothing more. Why is that?

    It’s because most people don’t set their mind to achieving that goal. They might not be happy in their current situation but they’re comfortable – and comfort is one of the biggest enemies of growth.

    How do you go about developing that millionaire mindset? By following these simple steps:

    1. Focus On What You Want – And Take It!

    So many people are too timid to admit they want something and go for it. When there is something that you want to accomplish don’t think “I could never actually do that”, think “I could do that and I WILL do that”.

    Millionaires play to win, not to avoid defeat.

    This doesn’t mean to have to become a selfish jerk. What it means is becoming more assertive and honest with yourself. You don’t have to grab off other people. There is a big pot of unclaimed gold in the middle of the table — why shouldn’t you be the one to claim it? You deserve it!

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    2. Become Goal-Orientated

    It’s almost impossible to achieve anything if you don’t set firm goals. Only lottery winners become millionaires overnight. By setting yourself attainable goals, you will get there eventually. Don’t try to get rich quickly — get rich slowly.

    Let’s take the idea of making your first million dollars and expand on what kind of goals you might set to get there. Let’s also say you’re starting at a break-even position – you’re making enough to get by with a few luxuries, but nothing more.

    Your goal for the first year can be having $10,000 in the bank within a year. It won’t be easy but it is doable. Next, you need to figure out the steps you need to take to achieve that goal.

    Always look at ways to make growth before cutbacks. With that in mind, you might want to see if you can negotiate a pay rise with your boss, or if there’s another job out there that will pay better. You might be comfortable in your old job but remember, comfort stunts growth.

    You may also have other skills outside of your workplace that you can monetize to boost your bank balance. Maybe you can design websites for people, at a fee of course, or make alterations to clothes.

    If this is still not enough to make the money you need to save $10,000 in a year, then it’s time to look at cutbacks. Do you have a bunch of old junk that someone else might love? Sell it! Do you really need to spend $10 on your lunch everyday when you could make your own for a fraction of the cost?

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    If you are to become a millionaire, you need to start accumulating money.

    Here’re some tips to help you: How to Become Goal Oriented and Achieve More in Life

    3. Don’t Spend Your Money – Invest It

    The reason you need to accumulate money is for step three. Millionaires tend to be frugal people, and that’s because they know the true value of money is in investing. Being your own boss goes hand-in-hand with becoming a millionaire. You’ll want to quit your regular job at some point.

    Stop working for your money and make your money work for you.

    Rather than buying yourself a new iPad, that $500 could be used to invest in the stock market. Find the right shares (more on that later), and that money could easily double within a year.

    There’s not just the stock market — there’s also property, and your own education.

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    4. Never Stop Learning

    The best thing you can invest in is yourself.

    Once most people leave the education system, they think their learning days are over. Well theirs might be, but yours shouldn’t be. Successful people continually learn and adapt.

    Billionaire Warren Buffet estimates that he read at least 100 books on investing before he turned twenty. Most people never read another book after they’ve left school. Who would you rather be?

    Learn everything you can about how economics works, how the stocks markets work, how they trend.

    Learn new skills. If you have an interest in it, learn everything you can about it. You’d be surprised at how often, seemingly useless skills, can become extremely useful in the right situation.

    Start developing the habit of learning continuously: How to Create a Habit of Continuous Learning for a Better You

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    5. Think Big

    While I advise to start off with small goals, you absolutely should have a big goal in mind. If you have a business idea, then that is your ultimate goal – to start that business and make a success of it. If you want to invest your way to millions of dollars and do little work other than research, then that is your big goal.

    There is no shame in not achieving a big goal. If you run a business and aim to make $1 million profit in a year and “only” make $200,000, then you’re still significantly ahead of most people.

    Aim for the stars, if you fail you’ll still be over the moon.

    6. Enjoy the Attention

    To be successful, you have to be willing to promote yourself and enjoy the attention to a certain extent. Now the attention doesn’t need to be on yourself, it could be on your brand, but attention definitely attracts money.

    Never be embarrassed to get your name out there. That means finding a spotlight and being brave enough to step right up underneath it.

    If you run a business, try contacting the local papers. You’d be surprised at how amenable they often are to running a story about you and your business, and it’s all free publicity.

    Above all, remember: You control your own destiny. Push hard enough for anything and you’ll get it.

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    Featured photo credit: Austin Distel via unsplash.com

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