This post comes after a couple of weeks of thinking about my own finances. About how the confidence I feel about using money doesn’t extend to other areas of my life. Financial knowledge is one thing, but everything else can seem confusing.
The basis of this follows the post about emotional spending, which has been incredibly popular since it went live. How simple, little things can have a real lasting impact on your finances, both positive and negative. The little decisions we make can be really destructive, and this includes how you manage your money.
In fact, bad money management – through whatever reason, including never having the education in the first place – can be just as destructive as binge drinking, overeating, smoking or anything else that can have a long and lasting impact on your life. And your health, come to that.
Many adults now feel an overwhelming feeling of stress when it comes to their own finances. Their financial knowledge, through no fault of their own, is low and their confidence to deal with their finances even lower. But this isn’t their fault. The system for teaching finances, when you’re younger, is not effective. There wis now a finance part in the national curriculum but it’s small and, to be honest, when you’re a teenager it’s not the most exciting thing to learn about is it?
However, getting more confident with your own finances and increasing your financial knowledge should be part of your self care routine. Just like you take care of yourself, go to bed at a reasonable time, eat good food and take time to relax, looking after your finances should be on there.
Here are 5 ways in which to incorporate financial knowledge into your self care routine.
1. Through learning to budget.
The very first thing you should do to improve your financial knowledge is learn how to do a budget, no matter how basic. Start tracking your own spending and see where your money goes. Look at how much money your household brings in and then where it goes. Over time, you can change your budget to suit your own needs.
Related post: How To Make A Budget
Related post: My 10 Minute Budget Routine
2. Start saving, no matter how small.
If you can, once you’ve got your budget sorted and know roughly where your money goes and how much you have left over, then you can start to save money. Sort yourself an emergency fund out, so that if something happens in an emergency you can cover it, then think about more long term savings. If you can save £25 a month, then it’s a great start. Baby steps 🙂
Related post: Why An Emergency Fund Is Important
3. Paying bills on time.
Most of the bills you get now are automated, such as mortgage, water rates, council tax and electricity. However, there are some bills that need to be paid manually. If you have a credit card, for example, this needs to be paid off otherwise you’ll incur interest. Set yourself reminders to do this before the due date. If you can, automate every bill you have so this isn’t a problem.
4. Money Management.
So, you’ve got your budget in place, your savings growing and your bills paid each month. Hopefully you’re feeling a bit more confident! Now is the time to think about other options, such as investing for the future, overpaying your mortgage or upping your pension contributions. All of these things will have such a positive impact on your financial future over time. I write a lot about investing and about overpaying your mortgage early. Research this, and see what you can do here.
Related post: Dividend Income
5. Finally, splurge a little!
If you’ve finally got into a comfortable place with your finances where you feel confident about how it progresses each month, you know what’s coming in and going out, then the final thing is to remember to splurge occasionally. I’m not talking about huge purchases but it’s totally fine to treat yourself now and again. After all, you work hard for your money and we all like nice things occasionally 🙂 just don’t blow your budget in the process 😉
So, some tips to incorporate financial knowledge into your self care routine. The more confident you feel about your own finances, the less stressful it will seem. And then you can move onto bigger aims and passive income! The world is your oyster 🙂
Do you have any other tips to add? I’d love to hear from you in the comments below!
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This is so true Nicola! Being in control of finances is such a weight off.