Everyone needs a healthy relationship with money and saving can really help with that relationship. Saving is very key in everyone’s life.
The first step to start saving money is to figure out how much you spend. Find ways you can cut your spending. Decide on your priorities. Taking the time to manage your money better can really pay off.
- Never spend more than you earn.
This is the golden rule of a healthy relationship with money. Money makes a great servant but a terrible master. You will forever be a slave to money if you keep spending more than you earn. You will slowly drown in debt, the interest will compound, the money will become a trigger for anxiety, fear, or worse, depression, and you will be its slave. Pay yourself first.
- Use money as a reward, not as therapy.
Many people use spending as therapy. A little win causes for a big celebration that costs a lot of money: a holiday you can’t afford or a car on a loan that stresses your finances. At the other extreme, life gets hard so spending is used as therapy to feel better – retail therapy being the most common form. Avoid using money to make yourself feel better. Small rewards are fine and can emotionally anchor the pursuit of success. Money will only paper over the cracks of how you feel about yourself.
- You’re worth more.
You are likely worth more than you give yourself credit for. You have lived your entire life with a tapestry of experience and that has great value. But you must honour that and know that you have a value that others want and will pay for. Self-worth equals net worth, so make sure you value your whole life’s work in your fees and salary requests. Do not sell yourself for less. Create value for your company or your clients
- Have a love affair with money.
They say that (the love of) money is the root of all evil. I believe this to be untrue. Money has no emotion. It is amoral and neutral. Money is simply a universal exchange (and store) of value. It’s a unit and measurement of account. It’s a more efficient mechanism of exchange. What gives money meaning and emotion is humanity. People project their own values and beliefs onto money as if money is that meaning. It is not. You can choose to have a love affair with money. You can choose to do good with money, be good with money and have lots of money. And you can choose to give lots away, which in turn feels great and will compound your love affair with money.
- Save, Invest and Spend.
Most people spend most or all of their money that comes in, often at the start of the month, and have little or none left to save or invest. When you have no savings or investments, you will feel negative emotions of fear and anxiety and be more emotionally volatile, because you know you are very close to financial ruin. This is the exact opposite of security, which creates healthy emotions, calm, confidence and mindfulness. To avoid this unhealthy, unbalanced emotional state, save a portion, invest a portion and only spend the rest once you have saved and invested.