Why Your Approach To Managing Your Money Is All Wrong

Sometimes it feels like your personal finances are spiralling out of your control. You don’t feel on top of your outgoings, you’re panicking and burying your head in the sand when it comes to loans and credit card debt, and you’re constantly looking for tips on money management. As pay freezes, cost of living increases and the economic slow-down has bitten hard over the past decade, more and more people have found themselves tipped into this scenario. Many of us are struggling on a day to day basis, but are taking entirely the wrong approach to managing money.

Change Your Mindset

All the financial advice in the world will not be effective unless you have the right fundamental attitude to your money. First of all, you need to unpick your emotional response to finances. Money is a tool – therefore it is neither positive nor negative – it’s what we do with it that makes it one thing or another. Most people have unexamined personal responses that colour what they do with their money- complex feelings of guilt and reward. Having these subconscious attitudes affects our financial behaviour more than we think. In order to move forward, we need to examine these attitudes, understand where they have come from and how they have shaped us, and then let them go. Whether it’s spending like a king on payday only to struggle through the end of the month, or feeling immense self-generated pressure to keep up with the Joneses, these attitudes can prevent you from ever making progress unless you address them.

Accessing Professional Advice

The next step is to stop the mindset of living payday to payday and begin to work out what financial goals you have for your future. Once you’re clear on your priorities for life- sending children to university, buying a house or saving for a comfortable retirement – then you may benefit from seeking some professional financial advice from a reputable firm like https://www.manningrushworth.co.uk. Having mapped out your money goals, and having gotten advice on how to reach them, you need to moderate your spending. So much of what we buy isn’t necessary, from 12 different pairs of trainers when we only wear two to sales ‘bargains’ that don’t get used. Cut impulse purchases by setting up a wishlist. Every time you want to buy something non-essential, add it to the list, where it has to stay for at least a month. Then, use a service like Bean to scan your account for forgotten and unused subscriptions, use a comparison service to lower your energy bills and insurance premiums. This will get your started on saving money towards the financial goals your adviser has mapped out.

Plan For Curveballs

Even the best-laid plans can get derailed by unexpected costs, so it’s important to set up an emergency fund to help you cope. You never know when the car will break down or the washing machine will decide to give up the ghost, and if you have a small rainy day fund, you can guard against events messing up your financial plans. Using an app like Moneybox, which rounds up all your debit card transactions to the nearest pound, then saves the difference in an account for you, can help you to build up an emergency fund without sacrificing too much. With your negative mental attitudes address, your goals identified, some professional advice and a few good habits, you’ll be well on your way.

*This is a collaborative post.