6 Tips For Managing Your Money Wisely, Part 1

People with a history of poor financial management often have trouble grasping the difference between money and value. They might spend too much on a trinket that has no permanence, or use their credit card for every little thing, even though it is nearly maxed out.

Many people think that wealth is just about earning more than other people and having material goods. But those who have the most money are often the ones who save and invest wisely. The best way to have an abundance mindset-whether you’re rich or struggling-is to learn how to manage your finances responsibly: with both your head and your heart.

1.

Make a list of your current financial goals. Write down how long it's going to take for you to meet each one, and then break it down into the necessary steps. If a goal is much too large, break it down into smaller steps that are doable. If you don't have a written plan, you'll always be changing your mind and wasting time (time is the most valuable asset you have).

2.

When shopping, ask yourself these questions: Does this purchase bring value, pleasure or meaning? Don’t just follow your heart, look at the real value of what you're buying and consider if now is the right time to buy it.

3.

Instead of buying everything on sale, save your cash and be patient. When you purchase an item at a cheaper price, you lose out on the benefits of the sale and the true value of the item.

4.

When purchasing items that have a long lifespan, try to buy something that will last longer than two years. It's better to spend a little more now rather than buy something new in two years that will be old and outdated in no time.

5.

Estimate how many hours a week you spend using credit cards, cash advances or overdrafts, so you can set money aside for emergencies or unexpected expenses that come up regularly.

6.

Have a budget and stick to it. Make sure you always have some money in your checking account, so you don't get into trouble when unexpected expenses come up.

7.

Don’t spend more than you earn. This is a basic financial rule we've all heard before, but it's one that's often ignored by many people (and this can really hurt us). Pay off credit cards as soon as possible (if not right away) and begin building wealth by saving the interest payments instead of blowing them all on the latest items or trips.

8.

Don't be a new car buyer. It's simple: If you're already driving an older vehicle, there's no need to go out and buy one just to maintain your status.

9.

Use cash whenever possible. Cash is king: it allows for flexibility and control. You can go anywhere at anytime without leaving paper trails in your computer or phone, and you don't even have to carry around a wallet or spend money on checks when buying things that don't require cash (such as groceries).

10.

When buying necessities (food, gas, etc. that you don’t expect yourself to use in a short period of time), buy as much as you can at once. This way, you won't spend more than what's necessary, but you'll still have a bigger supply.

11.

Develop a healthy relationship with your money: enjoy it, love it and take care of it. Don't let money isolate you from people and things that are important to you; instead, learn how to make the most out of what's given to us.[1]

12.

Don’t have any regrets over your financial choices in life - we all make mistakes, so don’t let one particular purchase overshadow all other purchases.

13.

Try to find bargains in whatever you are interested in buying. There are plenty of ways to find deals online, if you're willing to do your research first.

14.

If you’re not sure how big of an effect a purchase will have on your budget, try looking at one month of expenses and dividing them by the number of days in the month to see how many “months” it would take for that purchase to burn through your income (and whether or not you can afford it).

15.

Lastly, don’t lose sight of the long term by focusing too hard on the short term. You may feel like you can barely make ends meet, especially in this economy, but hold on and keep staying positive. Things are going to get better soon.[2]

Conclusion

You can’t gain a wealth mindset by focusing solely on your income. You need to also look at what you're spending on, how much you're saving and how much debt you're accumulating.

In order to maintain your current financial situation, spend less than what you earn and save as much as possible. In time, the combination of paying down your debts and saving will provide a nice buffer of money that will allow you to survive any financial crises that may come up.

It's also important to have good credit and be financially responsible, so you can secure loans when necessary and even qualify for a better interest rate. Mistakes happen, but try not to feel too bad about it; just be sure to learn from them so you don't repeat them.

You'll also want to take advantage of any available deals or opportunities that come your way, as they'll all contribute to either saving money or making more of it. Of course, as we mentioned in the article, always consider the value of what you're buying before making a purchase.

About The Author

Brian Tracy is one of the world’s leading experts on personal development and success achievement. He is a highly sought-after conference speaker, seminar leader, corporate trainer, and television commentator. He is the author of over 50 books translated into more than 30 languages.

For more information on Brian Tracy’s proven Money Mindset courses, visit www.moneymindset.com

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