6 Tips for Building a Healthy Relationship With Money: It’s Now or Never

6 Tips for Building a Healthy Relationship With Money: It’s Now or Never

6 second take: There’s no time like the present to transform your money mindset — here are one financial expert’s two cents on how to do so.

A healthy financial mindset can lead to prosperity, abundant wealth, and happiness. It can also help you avoid debt, pesky calls from collection agencies, and a poor credit score.

Many Americans between the age of 21 and 62 experienced financial stress before the onset of COVID-19, according to a new survey by the Financial Industry Regulatory Authority. Nearly 60 percent of the almost 19,000 survey respondents indicated that they have financial anxiety, and 50 percent of the participants agreed they suffer from financial stress.

The survey results further revealed that 54 percent of men have financial anxiety compared to 65 percent of women.

Lack of financial literacy, unhealthy relationships with money, and debt problems are a few factors that lead to financial stress.

If you don’t want to suffer from financial anxiety and stress, it is essential to build a healthy relationship with money. The following tips can help you do just that.

1. Understand the Value of Money

Unless you realize the value of money, it is tough to use it wisely.

Money helps you buy the necessities in life by helping fulfill your wants and needs. In short, it helps you buy the basic ingredients of happiness.

No one will give you money for free. You need to earn it. If you squander money and get into debt problems, no one will come forward to bail you out. You will have to deal with collection calls, lawsuits, and a poor credit score. All these things will only lead to unhappiness.

2. Spend Money to Fulfill Your Financial Needs

Food, clothes, and shelter — these are your basic financial needs. Set up a budget for each category and spend money accordingly.

A budget plan helps you to fulfill the basic needs of your life while maintaining a good financial mindset and without going overboard. For example, if you have allocated $200 for food, then you are more likely to complete your grocery shopping within that amount. You won’t waste money on food items that please your eyes in the grocery store.

3. Fall in Love With a Frugal Lifestyle

No matter how much money you make, a frugal lifestyle can help you save for the things you love.

Being frugal doesn’t mean giving up your dreams.

Rather, it is just the opposite: A frugal lifestyle helps you to fulfill your dreams.

A frugal lifestyle entails spending money cautiously according to your financial priorities.

A typical frugal lifestyle is something like this:

  • You cook your meals using simple ingredients from scratch.
  • You install CFL bulbs at home to lower your power consumption and utility bills.
  • You stick to a basic cell phone plan.
  • You don’t buy new clothes unless it is absolutely necessary.

A frugal lifestyle helps you save money by reducing unnecessary expenses. You can use the saved amount to attend a concert by your favorite artist or to visit your dream destination.

If you can save enough money, you can take your family on a world tour. You can create new memories that your family can cherish forever.

If you have a massive amount of debt, you can use the money to pay it off. That would give you mental peace and safeguard your credit score.

If none of the options works for you, you can invest the money in a 401(k) plan or children’s education plan.

4. Stop Comparing Yourself With Others

One of the best tips for building a healthy relationship with money is to spend within your means. But when you see your wealthy friends buying the latest gadgets, designer clothes, and expensive accessories, you may feel tempted to purchase them for yourself. It is something like a social status.

What you forget in the process is that your friends are wealthy. They can afford to buy expensive gadgets, but you can’t.

Yes, you can buy those expensive things with a credit card. But that would only lead to credit card debt. Eventually, you have to pay off your debt. Your friends are less likely to help you out.

So, stop comparing yourself to your friends.

5. Embrace Healthy Financial Habits

A few simple habits can help to improve your financial mindset. Look at your bank statements every month. You can even do it with mobile banking apps.

Check your credit card statement before paying the bill. See if there are any unauthorized charges.

Make sure you pay your credit card bills on time to avoid late fees and penalties. Likewise, you must pay your taxes before the deadline. This will help you receive any eligible tax refunds quickly.

6. Nudge Yourself to Build an Emergency Fund

To build an emergency fund, you need to save money. So when you commit yourself to creating one, you are actually pushing yourself to save for tomorrow.

The more money you save for your future, the better.

It will make your life secure and give you mental peace. So what you basically need to do is change your attitude toward money. You need to develop a saving mentality with time.

The Bottom Line

If you have an unhealthy financial mindset, discuss it with your family members. Many families don’t have an open discussion about money, as they consider it taboo. This causes people to continue living with debt and other associated problems.

Instead of feeling ashamed, you should be proud of the fact that you want to tackle the problem head on and solve it. That’s commendable. Your family members can give you some tips to improve your relationship with money. You can work together as a team to fulfill your financial goals and be happy.

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