Are you content with your financial situation? Or do you think there is still a lot of room when it comes to improving your personal finances?
Regardless of your financial position, you have to understand that the feeling of contentment in your finances goes beyond the amount. You may have a lot of money in the bank and you may be earning a six-figure income and still feel discontentment. There may be some people who have much less than you but are feeling content with their finances.
Generally speaking, Americans are not happy with their finances. According to a recent report about financial satisfaction, only 35% of US workers feel satisfied with their financial situation. The rest are still struggling to feel content with the way their finances are going. It is also revealed in the same report that one out of the three workers that are not content with their finances mentioned that it has a negative effect on their lives.
Are you one of the people who does not feel content about their personal finances? If so, what can you do to save yourself from the stress of being unhappy with your financial position?
What does it mean to be content with your finances?
Without a doubt, you need to work on your financial position if you are not happy or content with it. But what exactly does it mean when you are content with your personal finances?
There are a couple of signs that indicate you are content with your financial situation.
You are not worried about your finances
A good sign that you are content with your finances is when you do not feel any financial stress. Even if you have a financial emergency, you do not really feel bothered about it – at least, when it comes to your ability to finance it. If someone needs to visit the doctor, you do not have to worry about the cost because you are confident that you can afford it. When you have car troubles, you do not blow your top over it because you know you can pay for its repair. Contentment gives you a feeling of comfort and security about your finances. This is a good thing because financial stress is real and it is damaging. It can destroy relationships. When you are feeling stressed, your mood changes. The tension can spark fights between loved ones. Not only that, the anxiety that usually follows a stressful situation can endanger your health. But when you are content with your finances, you will not feel any stress about it.
You can make confident decisions and transactions
Another sign of your financial contentment is confidence. The only way you can feel contentment about your finances is when you have a full knowledge of your financial situation. That knowledge will bring you confidence. If there is something that needs to be purchased, you can approach it without hesitation. As long as you know that your finances can afford it, you can approach financial decisions in a straightforward manner.
You do not compare yourself to others
Finally, if you are content with your finances, you wouldn’t really find the need to “keep up with the Joneses”. Experts believe that humans tend to judge our fortune based on what we see from those around us. That means we feel our success or failure based on how those around us perform. This habit of comparing with our neighbors can be an indication of our insecurities – specifically when it comes to our money. If you find contentment with your financial situation, this habit becomes a real waste of time.
If you have any of these signs, chances are, you are content with your finances. But what if you do not feel content? What can you do?
How to feel contentment towards your finances
Fortunately, there are somethings that you can do to help you feel content with your finances. But before we dwell on that, you need to understand one thing. This is something that you need to work on continually. You may feel content about your finances now – but that can quickly change after a few months. Sometimes, all it takes is one financial emergency to put your finances on the brink of a crisis. It is also possible that you have decided to pursue another life milestone. That will change your priorities and, in effect, your financial goals. This will definitely influence your feelings of contentment with your finances.
This is why you need to make sure that you will always work hard to keep your financial position satisfactory. But how can this be done?
Have full control of your finances
Start by maintaining full control of your finances. This may seem intimidating – especially if there are so many things going on in your life. But it has to be done if you want to feel any form of contentment when it comes to your personal finances. Apparently, people who maintain full control over their finances have a higher level of financial well-being. At the very least, knowing your finances will lessen or eliminate any anxiety that comes with managing financial transactions. This is especially true if your financial situation is currently doing great. You will feel confident and this can lead to contentment. In case your finances are not in an ideal situation, you can figure out what you have to do in order to make things better.
Make sure you are financially secure
Another thing that you need to do to feel content towards your finances is to make yourself financially secure. There are many ways to do this but there are two that outrank most of them.
The first one is to diversify your income. After the Great Recession, we all realized that our employment situation can quickly take a turn for the worse. Because of that, you need to have a backup plan for your income. That means you have to diversify it. Invest your money so it can serve as a passive source of income.
Another thing that you can do is to have an emergency fund. This is the best way to secure your finances and live a stress-free life. This reserve fund will help you meet unexpected expenses. Most of the time, people who do not have this fund end up borrowing money in order to help them survive the emergency. To keep yourself from debt, you need to build your emergency fund because this will help you get over a lot of problems that you will encounter.
Work towards financial independence
Finally, if you want to feel contentment with your personal finances, you need to try to pursue financial independence. This is a financial situation wherein you have enough personal wealth to live off of it without the need to work. But how do you achieve this? Most people save enough money and invest it in the stock market. These people then live off the profit that they gain through the interest. For instance, if you have invested $1 million and it earns 4% of interest each year, that gives you $40,000 of profit each year. If you can live off of this amount, that means you no longer have to work to survive. If this financial situation does not make you feel contentment, then what will?