6 ways to stop sabotaging your finances

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Before you resolve – again – to take control of your finances, find out if you are the one sabotaging them.

With the New Year comes a slew of New Year’s resolutions. If you’ve found yourself saying this will be the year where you too often take control of your finances, perhaps it is because you sabotage your efforts.

Most of us do this, consciously or unconsciously. Like learning to skateboard, learning to manage finances is an acquired skill. It doesn’t matter how often you fell, as long as you plant your feet firmly and try again.

1. Sabotage: Not budgeting

A Debt.com survey showed that 33% of Americans don’t budget their money (although 93% think everyone should). It’s easy to see why someone would be reluctant to sit down with pen and paper and create a monthly budget: it can be a disappointment. In its simplest form, a budget shows how much money you make each month and how much you spend. If you spend more than you bring in, it’s scary. If you have enough to pay your bills but feel like you’re never moving forward, it can be depressing.

Do this instead:

Why not consider your budget as an ally, a tool that you will use to achieve your financial goals? For example, let’s say your bills are $200 more than your income. Use your budget to find places where you can cut the fat, like subscription services, primo cable plans, unused gym memberships, booze, eating out too often – or wherever fat may be in your case.

If there’s no fat to cut, your budget will tell you exactly how much more you need to earn each month, taking the guesswork out of your finances.

2. Sabotage: Building an impossible budget

You know what makes a budget hard to stick to? Treat him like he’s a prison guard who won’t let you do what you love. We can all create budgets that stifle the fun in our lives, but why?

Do this instead:

Do you like games, movies or trying new restaurants? You may not be able to experience these things as often as you used to, but you shouldn’t cut them out of your budget altogether. Say you normally buy a new game every two weeks. Reduce it to once a month and save the difference or pay off the debt.

3. Sabotage: not saying no

After a hard day at work, it’s hard to say no to yourself. We feel like we deserve a reward for the hours of work we put in. And yet the reason we have to work so hard is that we find it hard to say no. It’s an endless cycle.

In addition, there is the problem of stress-related expenses. According to a 2017 study by Credit Karma, 52% of respondents said they sometimes shop to deal with stress, anxiety or depression. Of this group, 60% admit to making stressful purchases at least once a month.

Do this instead:

When you feel like spending money, ask yourself if it’s something you need or want. Determine how many hours you will need to work to pay for this. When we deny ourselves something we don’t need, we save money for something we need.

We tend to replace one habit with another, so when you’re tempted to stress in store, find something more productive to do with that energy. Take a walk, call your grandmother, go to a gallery opening or read a book you’ve always wanted to read.

4. Sabotage: Worrying What Others Think

If you find yourself daydreaming about how others will be impressed with something you buy, you might have a bad case of keeping up with the neighbors.

Do this instead:

Nothing is ever as perfect as it seems. Your friend who drives a $60,000 car might have a lease he can barely afford. The couple in the $1 million home could be mortgaged to custody. Focus on how you to feel. Do you have a job you love? Are you proud of how you treat people? Are you living fully each day? Ultimately, it doesn’t matter what other people think of you, so practice asking yourself how you feel about the financial decisions you make.

5. Sabotage: making spending easier

It takes me about two minutes to buy toothpaste online. My credit cards are stored, I know where I want to shop, and I could probably complete the process in my sleep. I’m here to tell you it’s too easy.

Do this instead:

A few months ago, my husband and I adopted a new budgeting practice. We automatically pay bills like mortgage, car payment and utilities through our bank, but for everything else we pay in cash.

Swiping my debit card to complete a transaction has never stung so much as handing over cash. I know it’s from the same place, but there’s a greater awareness of how much I’m spending when I make a cash payment. Also, once the money for the week runs out, it runs out.

6. Sabotage: not imagining the future

As the family elders used to say, “God wills it and the stream does not rise”. You have managed to convince yourself that there will never be job loss, serious illness or any other event requiring an emergency fund. You also can’t imagine yourself getting old, so you’ve put off saving for retirement.

Do this instead:

Record whether you want to or not. The will be be an emergency, even if it’s just a broken furnace or water in the basement. And if you’re lucky, you’ll get old. And you might be surprised to learn that saving isn’t something that only benefits us in the future – there are immediate benefits.

Putting money into an emergency fund provides a sense of accomplishment and can help us sleep better at night. Putting money into a retirement account can provide tax relief that hits at just the right time of year. Plus, if you’re going to imagine growing old, why not imagine being an incredibly cool senior citizen who has the money to live comfortably?

It’s impossible to predict everything that’s going to happen in life, and that’s part of the fun. What we can do is take control of our finances so that we feel better prepared come what may.

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