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How much money is enough for happiness and why do we need it? Being aware of emotional responses to this universal medium of exchange is the key to financial freedom, coach Janey Howl insists. And offers several strategies for a more prosperous life.
A healthy relationship with money is an important part of a happy life, but having a lot of money is not. Anxiety about finances often poisons life. But the reason for this is our attitude to money, and not objective economic reality.
We involuntarily draw money into all significant areas of life, our dreams and goals, relationships with others and security issues, we begin to measure our own freedom and significance with it. Emotional truth, economic reality, and financial freedom will help you get out of the trap.
emotional truth
Polina works hard, denying herself vacations and weekends. Her goal is to save enough so that she can safely retire and spend all the time with her family: “I don’t want my children to make their way in life like me, ashamed of their unfashionable clothes and a shabby apartment, so that they work two jobs, paying for my studies at the university.
She is successful in her career, but it seems to her that the eight-figure amount of money in her bank account is not enough yet. Her need for financial security is so great that she is ready to sacrifice her life values for her. But she will never have enough money to feel secure.
Emotional truth means knowing exactly how much money is enough and being able to distinguish between what you want and what you need. There will always be bigger apartments and more expensive cars, but if we get caught in a circle of endless desires, we will never be satisfied. Nothing prevents you from sometimes using shopping or going to restaurants as short-term psychotherapy, but constant overeating and shopaholism are a sign of self-doubt, an attempt to solve your problems with money.
Anyone can painlessly reduce their monthly spending by at least 10%
Distinguish needs from wants. Needs are finite and wants are infinite. We are sure that with big money everything will be fine with us, this is not true.
The real reason for our financial worries is not that our income is too low, but that we get used to spending more than we need to. That’s why many people with high incomes have serious financial problems, and most lottery winners within five years return to the financial situation in which they were at the time of winning, or even go bankrupt.
economic reality
What is your current financial situation? Of course, you know how much you earn, but do you have information about your expenses? Do you understand where the money is going? Are you able to calculate your net worth? Financial illiteracy is not blissful ignorance. These are sleepless nights, fear of entering a pin code, inability to find an error in a letter from the tax office.
Olga admits that “it was easier for her to lose 5 kg of weight and give up alcohol, it was easier to come to terms with the fact that she would never have children than to learn how to manage her money,” but this changed her whole life.
Olga is a financial director, and her salary is 300 thousand rubles, but she did not know how to manage her finances.
It took her a meeting with a coach to get to the bottom of it and realize that her financial situation does not depend on how much she receives, but on how much money she has left: “My expenses increased with every salary increase, with every bonus. I calculated and found out that I spent almost 60% of my salary on things that were not needed.
If you spend everything you earn up to a ruble, you are driving yourself into a trap. Take immediate action to cut costs. Each of us can reduce our monthly spending by at least 10% relatively painlessly.
Financial freedom
According to the Public Opinion Foundation, 29% of Russian citizens have a bank loan. The most popular type of loans is a consumer loan in a store (13%), in second place are loans for urgent needs: medicine, repairs, weddings, etc. (10%). Mortgages for 3% of respondents. Almost every third Russian with a small salary chronically “lives in debt”.
Commit yourself to cut debts, credits and borrowings from your life. Surely your lender listed all the benefits that you get by borrowing money from him. But he didn’t exactly mention the price you pay for that benefit by getting into a debt trap. As for the mortgage, it can also be planned and organized with minimal losses.
When they realized that every ruble taken on a mortgage had to be repaid in a larger amount, Anna and her husband Sergei reduced all family expenses to a minimum. “We tried to pay 10-15 thousand more monthly than was established, and if we received bonuses or some other additional money, we gave everything to pay off the loan,” explains Anna. “We didn’t go to the cinema and cafes, we bought the most necessary things from things, and we didn’t even do repairs properly.”
As a result, instead of 1 years, they paid off a mortgage of 8 million rubles in 3 years with a slight overpayment. “Now I know for sure that money doesn’t matter much,” Anna sums up. “It’s all about discipline and believing in yourself.”
Of course, at first it was not easy for Anna to limit herself in everything. But she is sure that financial freedom is worth the sacrifice in the form of depriving herself of small pleasures that she and her husband brought in these three years. Very quickly, the benefits of your new healthy money habits become tangible and your dreams become achievable goals.
A relationship with money is healthy when we are no longer bothered by the idea of getting rich.
The collision of emotional and economic reality is a truth that liberates. Money is just a tool, a means to an end. Financial freedom requires determining the ultimate goal, priorities. With a specific goal in mind, you can make a plan.
You invest money wisely, including in yourself: by developing concentration, discipline, you learn to act based on values, and not momentary pleasures. These skills bring success in other areas of life, allowing you to make life choices that give you a sense of freedom and security.
A relationship with money can be said to be healthy when we are no longer bothered by the idea of getting rich; when we know that money is not security, freedom and power. It’s just money.
The source of wealth lies in the ability to appreciate what we have, give thanks for gifts, invest wisely and share freely. Ultimately, life is the only wealth.
How to develop healthy financial habits
1. Unpack your emotional baggage. What was your first childhood experience with money? Is it associated with feelings of pleasure or guilt, with embarrassment, with a sense of scarcity or abundance, with some kind of fear or conflict? Awakening these memories will help you gain a deeper understanding of your current relationship with money.
2. See money as a tool, not a weapon. Draw in your mind a picture of how you would heal if you had all the time and money you need (not how much you want!). It should be a clear and defined picture. For example, imagine that you devote all your time to writing a novel without worrying about income. The image should be attractive to motivate you to take specific actions.
3. Forget about the fact that “a large amount of money would solve all problems.” The real reason people experience financial stress is not because they have small incomes, but because they spend too much.
4. Identify 10 regular purchases that are not essential. These may include daily coffee, glossy magazines, vacuum-packed chopped salads, and even the overly luxurious hotel where you prefer to relax every summer. Remember that in every family there are 10 to 25% of optional expenses that can be safely cut.
5. Determine what you won’t do for money. Money is a valuable resource. Just like our time and relationships. We do too much for money, try to change this balance. Let’s say you don’t like your job. But you do not consider it possible to change it to a less paid one in order to spend more time with your family. Try to take the first step – take one day off at your own expense every three weeks. Such small steps can lead to big changes in the future.
How to manage money
Take control
- Keep all financial papers in one place by dividing them into sections.
- List your assets and liabilities, keep track of income and expenses.
- Pay bills on time.
Get out of debt
- Seek help from a financial coach.
- Pay off high-interest debts first.
- Keep only one credit card for emergency use.
To save money
- Cut costs from 10% to 40%.
- Set aside money in proportion to your income. Start at XNUMX% and increase your savings ratio by XNUMX% per month for a year.
- Create a cash reserve in the amount of two to three monthly expenses.
- Do not allow yourself to increase expenses when income increases. Transfer additional profit to a savings account.
- Get a notebook in which you will write down everything that you spend during the month. It is a motivator for forming new habits.
About the author: Janey Howl is a psychologist, business consultant, and financial coach.
Mirëdita nga kjo anë, jam znj. Flora Scott një kredidhënëse private, Ne ofrojmë kredi urgjente për Krishtlindje dhe kredi personale për festën e fundvitit. prandaj përfitoni nga kjo mundësi tani!!! nëse jeni të interesuar për një kredi urgjente për ndonjë arsye financiare, atëherë mos hezitoni të na kontaktoni përmes (flora_scott@outlook.com) për më shumë informacion rreth këtij transaksioni kredie.
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