We all want to feel good about money. For most of us, money is our gateway to freedom, and as a result we’re constantly wishing we had more of it. But what if feeling good wasn’t necessarily about having more money, but more control?
To feel empowered in other areas of our lives, we need to feel inspired and in control of the situation. The same applies to money; control leads to confidence and feeling good with what you’re working with. This involves learning how to manage your money on your own and the ability to confidently make financial decisions, without external validation. Here are 3 things you can do to start feeling more empowered with your finances!
Monthly and weekly money dates are critical for financial empowerment. How can you feel good about your money if you don’t even know how much you have? My number one rule for financial success is following up with yourself often.
By checking in with yourself, you not only are forced to hold yourself accountable, but you’ll also start to learn your spending patterns and habits. This will help curb overspending, because you will recognize when you’ve spent more than you planned, and hopefully why it happened in the first place. Recognizing these patterns can lead to positive change, and ultimately impact your finances across the board.
I dive deep on how to audit your finances every month in this post, and I follow this method religiously. It has helped me double my savings rate in 2020 and become fully aware of what is important to me, what isn’t, and how I can adjust my spending to cater to my lifestyle.
Create a Strong and Realistic Spending Plan
If you’ve ever felt intimidated by money, or think that personal finance is too complicated so you just avoid it all together, creating a spending plan will change your life. Not having a plan in place can create some serious problems with overspending, as well as complete ignorance to where your money is going and how to reach financial goals.
To feel empowered with your money, you need to create a spending plan that aligns with your lifestyle and your financial goals. Having a plan in place allows you to map out where each and every dollar will go and define exactly what needs to happen in order to save more money, pay off debt, and everything in between. A solid plan also puts you in the drivers seat of your financial life; you can control where your money goes and see what is working, what isn’t working, and what can be changed to move the needle forward.
If you want to create a serious financial plan and start tracking your progress towards financial goals, make sure you purchase The Personal Finance Dashboard. This dashboard is built to simplify budgeting and financial planning, so that you can spend less time managing your money and more time living your life and accomplishing your biggest financial dreams. This is the exact budgeting template that I use, and it’s helped me map out my road to $100K in 2020!
Build an Emergency Fund
An emergency fund is your financial safety net. Oftentimes, we forego building up savings to prioritize paying off debt or for short-term spending, forgetting that emergencies happen to everyone and can totally derail your life. In fact, if you don’t have an emergency fund because you’re too focused on paying off debt, you can actually end up incurring even more debt if something happens and you don’t have the money to cover it.
Emergencies happen to all of us, and they’re always a surprise (hence, emergency). We’ve been living through a global pandemic for the last 4 months, so it has become increasingly clear just how quickly life can change, shit can hit the fan, and the world can be turned upside down. You can lose your job at the drop of a hat, or get a major medical bill from some sort of freak accident or illness. Anything can happen, so in order to protect yourself and have control over your life, you need to have an emergency fund.
The general rule of thumb is 3-6 months of expenses set aside, but if you like to put a number on it, I make sure to have $10k in my high-yield savings account at all times. This will give you a huge boost of confidence in all areas of your life, because you’ll know that if something happens, you can at least pay the bills next month.
Money management is hard, and it definitely can feel disenchanting if you don’t make a ton of money or big financial goals seem totally unattainable. Taking control of your finances, through building a budget, checking in with yourself, and saving an emergency fund will take the edge off and let you take your power back. Money doesn’t need to control you; you can control it with the right strategy. Remember, it isn’t always about how much you have, but how to use it to move the needle forward!