Is your money not working for you in a way that is enhancing your financial security? Let's have a look and see why some of us feel trapped in the money in, money out cycle in our lives.
The cost of living is rising, incomes are not growing, wage increases are minimal. Personal debt is at an all time high, with some of us borrowing to fill in the gaps. At the end of the month, our disposable income or money we have left after the bills are paid is being pulled in many directions. With the 2013 tax season over- its time to take a good hard look and review the year just past. Many of you may be getting a refund. Lucky you. Then there are those who may have taxes to pay. Ouch. Where will you find the money to pay last years tax pain and then address 2014. Something has to give. Money worries are taking the toll on all of us.
The reality is what we do with our money each and every day matters and could have long term implications on our financial security. Bad money habits are deep rooted. Each and everyday we make decisions with our money that are guided by an area of the brain called the subconscious. For example, mindless spending. We are not fully aware of what we do, we just do it. Decisions with conscious choice, have us taking the time to actually think about a decision before we act. Why? Researchers tell us we are so conditioned by our subconscious that it just takes over our lives. Bad money habits live in our subconscious as well, and unless we unlock them and replace them with better strategies or approaches, we will continue to be guided by old stories or paradigms that we have outgrown.
When we have good money habits we can navigate with more optimism what's going on around us. When we have bad money habits we fall in to the same old predictable behaviour with our money that may not be working. We lose respect for it. Bad money habits can creep up on all of us, and they don't happen overnight. There are plenty of examples of bad money habits: overspending, not saving enough, carrying interest on credit cards, impulse shopping. Much of this is short term thinking. I suspect you may already know your bad money habits. Most of us do. Most of us avoid them. Doing something about them is a totally different story.
It's the month of May and what better way to redirect 2014 than to really look at your money habits. Check in with your spending, saving and investing strategies. Here are 5 healthy money habits to get your money working for you and getting you to where you want to go.
1. Live By Your Values. Before you spend money, check in with your value system or beliefs. Don't be wasteful with your money or buy on impulse. Take a goal centred approach to your life and you will find more happiness.
2. Empower Yourself with Knowledge. You don't need to become an expert in personal finance or to become economist. But what you do need to be is literate by understanding the broader picture in terms of what it means to YOU. Knowing more will increase your peace of mind and make you more content. Be selective on what you read. Follow a trusted source to guide you. And, carve out one hour a week to engage in the learning process.
3. Engage in Mindful Decision Making. Life experiences will enrich your life. Things won't. Each time you reach into your wallet to spend, think about what it is you are actually doing. You will acquire greater respect for your money when you follow the money trail. Don't let your money lead you down a dead end street. Be mindful on how and when you spend money, and course correct if you find yourself engaging in mindless spending.
4. Make the Right Trade Offs. Money is a finite resource or tool. Engage in trade-offs with your money that will increase your financial security and long term financial health. When we live for today and spend all that we have, we are spent for tomorrow. It's time to make the right trade off.
5. Think Long Term. Look ahead and plan your tomorrows. We live in a culture of conspicuous consumption and instant gratification. Spending money today without thought about the needs of tomorrow is short term thinking. It is hard to see your future self but...your future self will thank you if you take a long term view of your personal finances and plan for a very long life. You will fear and worry less.
You can't boil the ocean but if your money habits aren't working for you, course correct and embrace healthier money habits. Making more mindful decisions with your money is empowering. You are in control of your money and your life. You can open yourself up to more personal freedom when you begin to challenge and change entrenched habits and beliefs that may no longer be working for you. Worry is a short term emotion that must be harnessed and transformed into confidence today and for tomorrow.
MORE ON HUFFPOST: