Money is a powerful force that shapes our lives in profound ways. If your relationship with money is more of a rollercoaster than a smooth ride, it’s time for a transformative journey.

  • Are you now ready to embark on a path toward financial well-being and empowerment?

Some practical tips and mindset shifts that I used to help me build a healthier, more positive relationship with my finances which could be useful for you include:

Reflect on Your Money Story

Uncover the narratives and beliefs about money that have shaped your financial habits. Understanding your money story is the first step toward rewriting it for the better. In rewriting my money story, I decided to stop taking money for granted and started viewing it as a tool rather than a barrier.

Naturally, I felt constrained by my financial situation because I felt that not having enough money was preventing me from pursuing the things I valued.

I decided to change my narrative from “I wish I had enough money to do that” to “How can I make my money work for me?” I met a lady who earned less than I earned but had achieved so much more with her saving culture and discipline. This made me realize that I had to dispel the myth that money is a barrier.

Now I had let go of my anxiety and focused my energy considering that I might be able to gather the necessary funds to achieve my ambitions. My understanding of the origin of my money beliefs and reflection on my money story became a profound journey toward self-discovery and empowerment.

Establish Clear Financial Boundaries

Financial boundaries are more about financial attitude/ mindset than they are about actual money. Boundaries are set limits that assist you in reaching your goals. Examples could include

  1. Prioritizing your own financial needs or demands over those of others.
  2. Setting boundaries around online shopping so that mindless and spur-of-the-moment shopping on pointless items is reduced.
  3. Requesting for a day to consider a request for money rather than accepting it right away. Big requests merit careful thought. Saying “Yes” is perfectly OK as long as it does not get in the way of living a financially successful life.
  4. Imposing a strict spending limit on buying gifts for holidays or birthdays. Giving gifts should not come at the expense of your financial stability. Your gift budget should still protect your finances.

These boundaries should not make you feel selfish but help you in safeguarding your financial, emotional, mental, and physical well-being. They certainly have nothing to do with greed as setting your limits should not ever make you feel bad or guilty. These boundaries will mostly assist you in realizing your goals, confirming your requirements, and accepting who you are.

They exist to respect your desires and requirements in a well-managed manner and come down to your self-dignity. Being in a better financial position enables you to help others as you can donate freely and liberally after your cup is filled. (Think of the emergency oxygen masks on airplanes).

Set Clear Financial Goals

Goals are something you will achieve (e.g., making a down payment on a home, paying off debt, saving for a dream vacation, achieving debt-free living, or reaching your retirement goals). Do you have a clear vision of your financial future?  You will need to define your financial aspirations as clear goals provide a roadmap for your financial journey.

Your goals should be specific and well-defined. An example of a goal could be “I want to save £15,000 for a new car by October 2024”. This goal will eliminate uncertainty and outline the precise actions you must do to succeed because you will have to decide on how much to save each month until then.

Create a Realistic Budget

Creating a budget is one approach to learning about your finances. You can establish achievable financial goals within your budget. This ensures that your aspirations with your financial capacity.

Ultimately, the goal of budgeting is financial freedom. By managing your money wisely, you create opportunities for a future where financial constraints are minimized. When you establish a budget to track your income and expenses, you identify areas where you can cut back which would allow you to allocate funds towards savings regardless of your income level.

Learning how to allocate funds wisely, and prioritize spending ensures that your money works for you, not against you. When you have a budget, you know exactly how much money you are bringing in, how quickly it is leaving, and where it is going. My initial budget helped me identify multiple financial issues I was facing.

Spending beyond my means was my main issue and seeing it on paper shocked me into action as I had been living in denial. Having a budget in place and adhering to it has helped me prioritize savings as an expense and understand that financial growth is incremental.

Forgive Yourself

One thing I’ve discovered about money is that you have to be willing to forgive yourself for past and present financial transgressions. Realizing that you have to accept the things that have already happened is crucial. Your economic position, lack of money, or credit card debt issue are unchangeable. At this point, all you can do is accept the choices you made in the past and make other ones going forward.

These errors do not define who you are as a person. Seize these chances to learn, absorb the knowledge they impart, and proceed on. You could speak with a family member or close friend about your financial situation.

Then look to change your negative narratives on money to a positive one and move on. It is never too late to build a better relationship with money.

Educate Yourself About Personal Finance

Knowledge is power. Equip yourself with the basics of personal finance, from understanding interest rates to exploring investment options. Take advantage of accessible financial resources such as online guides, books, and courses.

These materials can simplify financial concepts and empower learners of all levels. Empowerment comes from informed decision-making. You can improve your financial skills with time and effort if you start small and learn gradually.

Practice Mindful Spending

Embrace mindful spending by evaluating purchases against your financial goals. This approach allows you to make informed decisions about where your money goals. It also allows you to cultivate awareness around your spending habits. You learn to differentiate between needs and wants and make intentional choices that reflect your financial priorities.

Tackle Debt Strategically

Debt is a financial tool that should be wielded consciously and strategically. It is important to understand the distinctions between good debt (investments with potential returns) and bad debt (high-interest consumer debt). If you have existing debts, allocate a portion of your budget to systematic repayment.

Creating a realistic repayment plan to address and eliminate debt will help you regain control over your financial situation. This could be either through debt snowball or debt avalanche methods. Approach debt repayment with mindfulness. Acknowledge the steps you’re taking to eliminate debt and focus on the progress rather than feeling overwhelmed.

Build an Emergency Fund

Create a financial safety net by establishing an emergency fund. This fund provides a buffer in times of unexpected expenses, reducing financial stress. Having an emergency fund gives me peace of mind and is necessary for my mental, emotional, and financial well-being. Building a financial cushion that allows you to cover essential expenses without resorting to debt is crucial.

Invest in Your Future

Explore investment opportunities that align with your risk tolerance and financial goals. Investing is a key component of long-term financial growth and security.

Cultivate a Positive Money Mindset

I invested in reading books, attending workshops, and engaging with resources that focused on reshaping my money mindset. Education can be a powerful tool for transformation. You can also shift your perspective on money by adopting a mindset that emphasizes abundance rather than scarcity.

This mindset shift influenced my approach to financial decisions and steered me away from unnecessary debt. The use of positive affirmations and gratitude practices can reshape your mindset and attract financial positivity. Some of my favorite daily affirmations include:

  1. Money is constantly circulating in my life. I release it with joy and it returns to me multiplied wonderfully.
  2. Money flows to me in avalanches of abundance. I use it for good only. I am grateful for my good.

Cultivating a mindset of financial abundance can pave the way to a more resilient and debt-free future.

Regularly Review and Adjust

Your financial journey is dynamic. Schedule regular financial check-ins where you set aside time to review your financial goals, and budget, assess progress, and make adjustments as needed. This could be weekly or monthly. I track my expenses daily and review my budget monthly to adjust my expenses the next month if I am overspent. Adjust as needed to stay on course and adapt to life’s changes.

Conclusion

Improving your relationship with money is a transformative process that requires dedication and mindfulness. By implementing these practical tips and adopting a positive mindset, you can pave the way for financial empowerment, security, and a brighter financial future. It’s time to take control of your financial narrative and thrive on the path to financial well-being!

What To Read Next On Improving Your Relationship with Money:

What financial boundaries and goals have you created in your life? And why?

What positive affirmations about money have you written?

What are some of the ways you are improving your relationship with money?

Feel free to share in the comments below!

Thank you for being a VCC reader. I am here for you, and cheering you on your financial journey. Stay happy.