Five Goals to Improve your Financial Health this New Year
Start a budget, stop buying shoes, track your spending, invest, plan ahead… stop buying shoes.
You’ve heard it all before, and most blogs around financial planning revert to the same points – planning, budgeting, frugal behaviour.
But problems with money can be psychological – our relationship with it, the underlying emotional and preconditions that may surround it. These can start from as early as childhood, and for many people, money is seen as a strain, an up-hill struggle, something which dominates their lives in negative way.
Changing our mind-set, and understanding subconscious behaviours with money can be the first step to becoming more financial agile.
As part of the Credit Union Money on Your Mind Series – where we provide jargon-free insights, advice and resources to help you feel more financially confident – we’ve pulled together five goals you can work toward to have a more healthy relationship with your finances this year. Remember, if you need financial support, you can always talk to us on 066 712 2372 or call into us in Tralee, Castleisland, Killorglin, Ballyduff or Causeway. We’re here to help.
1. Shift your mind-set to ‘control’
Our blog ‘Feeling in control of your finances’ examines our perception of money, and by understanding the ‘Internal locus of control’: our perceptions about the degree to which we feel that we are in charge of our own destiny, it can help steer us in a more positive direction, and not see money as something that is out of our hands.
How? As well as reading our blog above, and researching the idea behind ‘Internal Locus of control’, you can also download a budgeting app which can easily help you map your expenses, track your goals and let you take the reigns.
Read our blog on the best budgeting apps and tools, here.
2. Focus on haves, not the have-nots
Wellness icon Deepak Chopra says once you start to feel more in control of your money, you can start to shift your focus toward what he calls “abundance consciousness.” People tend to focus on scarcity, no matter how much money they have. In contrast, an abundance consciousness means becoming aware of the existence of plenty and connecting with it in your own life.
How? Consciously note all of your financial achievements, no matter how small, and congratulate yourself. Once you acknowledge progression, you are creating positivity and gratitude where there was none before – which can snowball into larger, tangible results.
3. Resist impulsive, mindless purchases
Like snacking mindlessly, impulsive buying is something we do for immediate gratification; and can become a cycle built on short-term gain, not long-term rationality. Although not every a purchase that hasn’t been thoroughly thought-through is necessarily bad, it’s important to be aware of when, and why you may be indulging in impulsive spending.
Similar to a drug, our brain releases happy hormones that reward us each time we indulge, but this can create a habit where we buy things to release a short hit of happiness, that often doesn’t last.
How? As above, once you start tracking your spending, you will become aware of small purchases that accumulate each month. It is important to notice when you feel an irrational pull toward buying something – simply being conscious of it will, over time, help increase awareness and allow you to make more rational decisions.
4. Become more financially literate
Not ‘expert on the stock market’ kind of financial literacy. But, information pulls away the sometimes threatening façade of many of life’s stresses, financial and others. Building a deeper knowledge around something means it is more familiar and accessible – and less likely to intimidate us. Start small, like learning what the interest rate of any loans you have, (or what an interest rate, or APR even is), details of your car, and home insurance, or what a fixed rate mortgage is. If you have a current account, use Bonkers.ie to compare your current account against a Cara Credit Union current account, at a €4 monthly cost.
How? There is plenty of information out there which explains jargon simply, like our blog here the golden rules of credit, on the difference between a PCP and a Car Loan, or information on how a credit card works. If you’re thinking or getting a loan but don’t know where to start, Cara Credit Union is community-centered, friendly environment which will answer any query you may have.
5. Change the way you talk about money
Finally, we’ll leave you with this one. Start to be more open and honest with yourself, and others about money. Change the way you talk about it; the words you use, to be more positive, confident.
Being open about money can also be beneficial for your children, helping them to cultivate a healthy money mind-set early on and giving them much-needed confidence to talk about finances now and into the future with their own families.
The content within this series is aimed to provide general guidance and information only. It does not represent financial advice.
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Finding the answers to these questions can be daunting. Financial planning helps to give you peace of mind and helps you take care of the things that matter.
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