Lots of people have a fraught relationship with money. The roots can be traced to childhood and how they were raised. Perhaps their parents were poor and couldn’t afford the things they wanted so they try to spoil themselves in adulthood. Maybe they have a competitive streak and they always want to be at par with their peers, including the latest toys and gadgets. Many were never taught about the basics of personal finance and they carry the burden of ignorance all of their lives. They might have a good income yet still be drowning in debt. Below are some of the best personal finance tips to change your relationship with money:
Don’t Tie Your Self-worth to Material Things
You are not what you own. Your assets do not define you. You don’t need the most expensive things out there to prove that you are a success or that you are worth the attention of other people. You should also refrain from thinking that giving out luxury goods is the best way to show that you care. Most people will be happy to receive humble yet thoughtful gifts. Even a greeting card with funny and personal messages can warm their hearts. Not everything nice is expensive, and not everything expensive is nice. Some just have a high price tag because of the brand. You are worth more than what you possess. Even if you lose your house, your car, and your job, you will still have value as a unique individual.
Stop Comparing Yourself with Others
One of the reasons why people overspend is that they feel the need to compare themselves with others. This feeds their insecurities and makes them want to compensate. Buying stuff sometimes helps them to feel like they have filled the gap. For example, if their neighbors have a new car, then they might want to follow suit. If their neighbor has just done a renovation, then they might try to do the same to keep up. Keeping up with the Joneses will only keep you poor as you are basing your decisions on what others are doing instead of looking inwards at what you actually need.
Take Care of Your Future Self
Save money to take care of your future self. This is not self-denial but self-care. When you set aside a certain amount for your savings, you are making your future a little bit more secure. When you put yourself in debt, you are taking away best personal finance tips in the future. Choose what you do wisely as everything has a ripple effect.