Establishing boundaries is important in living a happier and healthier life. For starters, boundaries can help you protect yourself from emotionally draining people or help you build stronger relationships. Limitations are also vital in creating professional relationships founded by efficiency and awareness.
However, there is one area in our lives that some are not so keen to establish. I am referring to the financial boundaries. It is easy to overstep our own financial boundaries and keep making mistakes that will hurt our goals in the long run.
KEEP THINGS HEALTHY
Restrictions go hand-in-hand with creating boundaries. These are most evident in creating a budget. Use this budget to work around your spending, but you have to be gentle with yourself.
Avoid having too many restrictions as you may torment yourself in the process. Holding on to an impossible budgeting standard can lead you to falling off the wagon.
INCREASE YOUR AWARENESS
Everyone makes mistakes. When it comes to finances, I learned this the hard way! Do not get me started with setting up financial limits while traveling! What is important is that I learn from these experiences.
You need an honest and nonjudgmental reflection whenever you cross a financial boundary. Otherwise, hiding your mistakes increases the likelihood of it happening again.
Abraham Lincoln once said, “Give me six hours to chop down a tree and I will spend the first four sharpening the ax.” This is exactly what time spent reflecting on your life is. You need to sharpen the ax in the decision-making process of your financial journey.
GET PROFESSIONAL HELP
Let us face it! Setting up financial boundaries can be tough. This is why some people seek the help of their partners, their trusted friends, or their financial planners. Having a financial planner can help you to make sound decisions with a goal in mind.
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Furthermore, there are several financial planners in Singapore. Make your life easier by searching thru the financial planner directory of Financial Planning Association of Singapore (FPAS). It is a non-profit association dedicated to promoting unbiased financial advice to the Singaporean public.
As you dig thru the pile of the items that you regret purchasing, you realize that you have one recurring problem. You keep on engaging on impulse purchases! Your credit cards do not seem to help you either. Instead, it invites you to shop more as if it calls out your name.
How can you reduce this tendency to shop without forethought? Well, start by planning ahead.
#1: IT PAYS TO PLAN AHEAD
When it comes to eliminating your unwanted expenses, it pays to plan ahead. Make a list of all the items that you need to purchase before shopping. Make it a habit to plan for upcoming occasions, birthdays, and other large purchases.
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Equipping yourself with this list as you shop around ensures that your purchases are more deliberate and less spontaneous. Furthermore, you may anticipate the upcoming clearance sales and other promotions.
#2: PINPOINT YOUR TRIGGERS
Take control over your shopping habits by monitoring your urges. Using a piece of paper or your handphone’s notes, mark each time you experience the urge to purchase. Describe the situation and the feelings attached to it. This helps you to increase your awareness while you shop.
Be aware of the different symptoms such as faster heart rate or a change in breathing. Becoming more aware of the changes in your body and mind can help you control the urge.
#3: IT TAKES 30 DAYS
You heard about contemplating for 24 hours before committing to a purchase. However, have you heard about the 30-day waiting period? Yes! You read that right. Stick your wish-list on your refrigerator and put a date to each item. You must wait for a month before making a purchase.
The mechanics may sound easy, but it takes a lot of patience and self-control to overcome the urge at first. These feelings are valid and can fade soon. You will take delight sketching out items off the list! The only exemptions to the 30-day period are groceries and other necessities.
#4: AVOID THE TEMPTATIONS
A surefire-way to reduce your impulse buys is to avoid going to shopping areas or shopping websites. Do not even go to dollar or budget stores as you might get trap in the process.
When purchasing, follow a list religiously. Get out as quickly as you can afterwards. Avoid walking around the shopping center for entertainment and find other ways to stimulate fun.
#5: IT IS ALL ABOUT THE BUDGET
Trimming down your expenses does not mean that you have to take out the fun. Give yourself a “splurge budget” that you can follow thru each month.
Decide whether you are willing to allot a budget for a new clothing item or a fancy restaurant date each month. Whatever it is, ensure that you are willing to spend a discretionary amount every once in a while. Take it as a way to reward yourself for straightening your finances. It is healthier that way!
#6: DO NOT MIX WITH THE WRONG CROWD
Surrounding yourself with people who are addicted to retail therapy may not be the best idea. It is easy to get out of track when your shopping buddies convince you that all the outfits you have tried looks great!
Image Credits: pixabay.comIf you want to shop with your friends, do it with people who have savvy spending habit. This way, you will be able to tell spend your money in a frugal manner.
As a couple, discussing about finances can be a hard pill to swallow. After all, money is a common source of issue in martial relationships. It is not something you discuss casually without emotional attachments.
Whether you like it or not, being transparent about your finances is essential in building a strong relationship. Talking about money increases understanding and facilitates cooperation as you work on the same financial goals.
You and your partner probably would not get too in-depth about your finances in the early stages of the relationship. As your relationship gets serious, so does your conversations.
Conversations about money often takes places when a couple moves in together. When this happens, do tap the fundamental elements such as your income and debt.
The next step is to decide how you are going to manage your finances as a couple and as individuals. Decide whether you will combine all your finances or keep them separate. The decision depends on your preferences and spending habits.
If you decide not to combine your finances, you need to discuss how you are going to divide the household expenses. Usually, couples prefer to either split things down the middle or to divide the expenses based on their incomes.
You will realize how different it is to be completely on your own financially and to have somebody to help you. Discussing money with your partner will significantly reduce the likelihood of relationship issues cause by finances. Furthermore, you will be able to work out on your financial goals.
Common example of financial goals include paying off debt, saving up for a flat, and being able to retire at a certain age. Goals will depend heavily on where you are at financially.
WORKING OUT THE DIFFERENCES
Handling your financial differences starts with determining what you can agree on (e.g., setting aside some money for travel or paying household bills on time). Let me illustrate it for you as a spender and as a saver. The spender should be allowed some leeway while following a specific budget for disposable income. On the other hand, the saver should be allowed to satisfy his or her needs by putting away some money to his or her own account. Compromise is the key!
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At the end of the day, mutual respect can helps overcome any disagreements about money. You might not be on the same page all the time, but being able to honor each other’s individual needs can sustain your loving relationship.
What is your idea about passive income? For most people, passive income provides an opportunity for freedom and independence. It gives an escape from our 9-5 jobs that occupy most of our week.
There are different ways to generate income while you are “sleeping”, here are just some of them:
START A BLOG
If playing with words comes naturally to you, you may find passion in writing. Establishing your own blog is quick and easy to do. Simply purchase your own domain or create your own website at no-cost thru website builders such as Wix.
Equipped with your glistening blog, you can either sell your stuff or share your expertise to earn some legitimate cash on the side.
CONSIDER P2P LENDING
Let’s face it! Banks do not lend money out of sheer kindness. They do it because it is profitable. Get a taste of the action by joining P2P websites, which allow companies from around the world to loan money from private people.
P2P Lending is highly attractive to both the borrowers and the lenders. Firstly, P2P Lending loan qualifications are more relaxed than that of given by the banks. On the flip-side, lenders can reap the benefits of up to 20% per annum.
INVEST YOUR MONEY
If you have money to spare, consider investing your funds to grow your nest. Let the company work for you as you receive dividends from them. Directly owning a stock in a company or through a fund enables you to receive dividends. A dividend is a cut of a portion from a company’s profits.
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The amount of money you receive depends on how much stock you own and how much profit there is to divide. Ultimately, the rewards that you will receive are decided by the board of directors. Do prior research before committing to a company.
Like most people, you are searching for the best way to fall on the right money management track. Falling behind your money-saving goals can feel discouraging, but it’s never too late to start learning some money-saving strategies. Throughout our lives, the relationship we have to money is dynamic. We have different needs and different spending habits. If you were never paying attention to your money-making and money-spending habits, this is the right time to start.
To organize your strategy, follow the tips below. They have been tested and proven to work on multiple occasions.
Keep a closer eye on your expenses
You know how much money enters your accounts monthly, but are you fully aware of how much you spend? Keeping a closer eye on your expenses will help you identify areas where the money is spent unnecessarily. You want to know how much money you spend monthly, and you want to keep tabs of your expenses. If you’re reluctant to keeping tabs manually, consider downloading one of the numerous expense trackers online. Alternatively, you can create your own expense spreadsheet.
Still, tools like Mint.com or Tink are amazing starting points in your expense tracking journey. Some apps can even offer you small synopsis of your spending patterns. With all that information, you will be able to make better money-management decisions in the future.
Once you get deeper insights on your money spending habits, you can start to outline a budget plan. Monthly budget plans will offer you a clearer idea of how your financial situation will look like in different stages of the month. When you notice discrepancies between your plan and actual budget, adjust the first. This will ensure you are in touch with the financial reality of your household, not the theory in your plan.
To outline an accurate budget plan, include your fixed monthly expenses: utilities, cell phone bills, car insurance, rent, or mortgage payments, and so on.
Take into account variable expenses, as well. Things like gas, personal care items, and one-time expenses are also important when creating a monthly budget plan.
Don’t forget about your savings account! If you don’t have one, this might be the perfect time to open one!
Establish a clear list of financial goals
Without clear financial goals you want to achieve by creating better financial habits, you are unlikely to work things out. Your financial goals can be anything, from saving up for a home down payment to paying off a debt, to saving up for a car or for a retirement fund.
Maintaining a clear list of goals will make you focus more on achieving them. It will also help you handle your finances more carefully. Being fully aware of your financial goals will also contribute to making better financial decisions. You will be more balanced between your spending and saving habits, and you will be more motivated to find extra income streams.
Invest
Investing is a clear way of making extra money. When the money coming from a single income source is not enough to pay your monthly expenses and saving, additional streams of income can help. Financial advisors come with several investment suggestions that are proven to work. The most efficient seems to be Forex trading. Before starting your trading journey, research Forex low spread brokers. As expert traders explain, they are the most advantageous for rookie traders. Low-spread brokers are those offering the smallest difference between the Bid and Ask price. This means you can buy currencies at lower prices and sell them for higher amounts. The benefit of choosing such brokers is obvious here. Your profits will be higher, in this scenario.
Have an emergency fund
Financial emergencies are not pleasant, but they can appear at all times. Having an emergency fund for such situations will help you keep your savings untouched. Medical visits or car emergencies involve huge amounts of money.
Establish how much you want to put in your emergency fund. This will only depend on you and your financial abilities. However, the more you put in this account, the better. According to financial advisors, those who still struggle with debt should aim to have at least $1,000 in their emergency fund. Others claim that you should have at least 3 to 6 months of your living expenses in your emergency fund. It mainly depends on your ability to save so much or not.
Try to figure out how much your household is comfortable with saving for this purpose. Saving something, no matter how little, is better than finding yourself without any money in emergency situations. For the beginning, set aside $5 or $10 for emergencies, weekly. If you’re comfortable with it, increase the amount periodically.
Prioritize expenses
All people have to prioritize their expense. Ideally, your spending habits should align with your values. Do you care more about buying a new kitchen appliance, or about your summer vacation? Pick between the two. Apply the same principle to all your expenses, and you will be more likely to save money, in the long run. Apparently, financially well-off people seem to value more experiences over physical things. You could try to implement the same strategy. Because new physical things appear frequently today, obsessing over them will only lead to higher expenses. Prioritizing experiences and things that bring happiness, in the long run, is more rewarding and less expensive.
These are the basic ideas and tips recommended for people who want to save some money but are not as experienced in the matter. Your money-saving journey can begin today. It’s never too late to pick up healthy money management habits. Go at your own pace and you will be more likely to succeed. Avoid letting external pressure guide your decisions and only make those moves you are comfortable with. Of course, the rest of your family should follow your lead. Saving money as a family is more effective but it can also be more difficult to manage.
