It’s already begun; I’m hearing the panic about Christmas expenses and holiday travel from lots of people, and it’s not even Halloween yet! I get it though, I really do.
Taking control of our financial life is something that some choose to take control over, while others chose to be “bad at.”
I don’t mean to sound insensitive, but if we don’t choose to manage our financial life then crisis will happen, and not just around the expensive holiday season, but each time we have an unplanned financial moment come up.
Don’t worry, I’m not going to lecture about WHY we need to be empowered and in control of our finances; I’m just going to offer some simple tips that may help reduce the stress and prevent these financial crises from appearing on an annual or regular basis.
7 Kaizen Tips to Empower Your Financial Life:
1. Write it down – Record your expenses either in a notebook, on your phone, in an excel spreadsheet or mint.com etc… It’s just a habit, and you CAN create a habit. You can do it for 90 days or one year. I recommend one year, because it will really help you see what you spend your money on and how often you spend without thinking. It will help you become financially conscious, and it will help you create a realistic budget. One of the reasons people can’t find a budget that works is that they don’t know the little things they spend, the quarterly expenses, and the annual memberships etc… things that are not in their typical monthly budget. By recording every expense you’ll learn to put things like the following into your budget:
- Car Wash
- Oil Change
- Doctor Visit Co-pays
- Triple A (Auto) Membership
2. Multiple Saving Accounts – Create a few accounts with your bank. If you are the person who spends whatever amount they have in their account, then create a barrier for yourself. You won’t be as likely to spend the dollars that you set aside for the airline ticket you need at Christmas, and you’ll have the money to buy that ticket. (Also try to book your flight in August or September) ****At least have an emergency fund. If you don’t have one, start building it!
3. Create a Budget – you can use an excel spreadsheet or use mint.com Know in advance that you will revise your budget a handful of times to get it to where it actually works. Maybe you only want to spend $40 a week on gas, but if realistically after you keep track of everything you spend, you discover that you spend $60 a week on gas you’ll need to revise your budget. I’ll never forget the year I realized I spent over $2,400 at Starbucks. I was shocked, angry and mortified… But I stopped going there every day after that. Prior to that moment it was “hard” to not go every day, but after I saw how much I spent in a year and what I could do with that money, it became a lot easier to not go every day.
When you track every dollar you spend, you’ll realize that the reason your budget didn’t work was, you had holes or areas where you spend cash without knowing it. Spending about $7 each day, is nearly $50 a week, and $200 a month which is why you may be short every month, and why your budget isn’t working.
4. Spend Less than You Earn – If you’ve cut out every expense and you still don’t make enough to live on every month, then you need to find additional income/revenue. If you are someone who doesn’t bring in enough money every month to pay their bills, and I know that’s a lot of people right now. Do your best to find ways of bringing in additional income. With the little time you have after working your job and driving your commute, muster up the energy to:
- Find things in your home you can sell on eBay or garage sale.
- Find a skill you have that people will pay you for (babysitting, cleaning houses, graphic design, web design) Ask a couple friends to help you decide what people would pay you to do as a freelancer.
- Enter the part-time job competition, it’s pretty competitive with lots of people looking for work, but it’s still an option.
If you are someone who spends as much money as they have, extra income may not be your solution. Too often people are living paycheck to paycheck with a six figure salary, because as they increase their income, they increase their spending. The way to nip this thing in the bud is to grow your plan, strengthen your discipline and feel empowered about your choices.
5. Chose Gratitude – Choose gratitude and activate the law of attraction. The best way to be open to abundance is by being grateful for what you do have. With each bill that you pay, smile, bless it, and feel joy that you have enough abundance to be able to pay this bill. Pay the bill with joy and love. See your ability to pay the bill as you having abundance. With every item or service you decide to cut out so you’ll no longer have that bill, don’t feel bad. Rather feel a deep sense of gratitude that you’ve found a way to let go of a monthly obligation, and now you have more abundance to put into other areas. It’s okay if you haven’t updated your wardrobe in so long you can’t remember, feel grateful for the abundance you do have. Convince Yourself to get excited about saving. You can do this by having a frugal partner who shares your successes with (read the Zero Dollar Day Post for a fun game strategy). Use affirmations, “I’m choosing to empower my financial self and my financial life and I’m winning”
6. Enjoy a Financial Diet – Just the way it feels great to put healthy nutritious foods in our body, it can feel great to say, “I don’t need to buy anything other than necessities this month. I feel free, I’m not being an over consumer and it’s a choice. I have the ability to buy things I don’t need, but I’m enjoying this detox, this diet.” This month only buy the absolute necessities. **And pay off those credit cards, ASAP! Those nasty interest rates will just devour you if you carry a balance.
7. Plan – put a plan together for how you will invest and save now that you have some extra money. Go beyond frugality, beyond saving and start investing and growing your financial life and well-being! Rather than saving for a car, what about saving to grow your financial life? There’s a sense of inner peace when we know we have savings nest that we don’t plan on spending.
Here are a few personal fiance websites for you:
Even with small continuous steps, anyone can regain control of their financial life. It’s a choice.
What tips or suggestions would you share for improving ones financial life?
What’s worked well for you in the past?