If you want to manage your finances better, it is important to focus on your own targets and goals. The reason for this is that you might be spending way more time looking at other people and what they have achieved. This can work to your advantage if you are inspired by what they have and aim to improve your own finances.
However, there are times when you consistently compare and envy the people around you because they seem to afford a lot more luxuries in life that you. You see yor neighbour driving up on a brand new SUV on their driveway. A lot of contractors seem to be working on the house making constant improvements on it. There may be times when they are always going on vaations and posting wonderful travel photos in their socia media.
You might think that your neighbors have a lot of disposable income since they keep on using it for lifestyle needs. One thing you need to understand when you want to manage your finances better is to stop comparing yourself from your neighbors. You have no idea how they get to do the things they do and could come to a wrong conclusion.
For all you know, they are having their home renovated and fixed up because they are planning to sell it and move to a diifferent place. The curb appeal of the house can help them sell it at a higher price than others. They could be going on vacations because their children are getting ready for college. Here are a few more of the reasons why your neighbors seem to have more money than you.
If you want to manage your finances better, you need to allocate your funds properly. You have to save for the life you want in the future. This gives you that peace of mind that knowing you are working towards a great life in the future. This is the mindset you need to take to plan for your finances and this might not be your neighbor’s mindset.
They could be allocating a little differently than you. Their focus could be somewhere else making it seem that they are better off than you. It is possible that your neighbors prefer to only pay the minimum on their card so they can keep on shopping for the things they want. They are current on their payments but are paying more than they should on their cards.
Perks at work make a big difference
You need to manage your finances better by focusing on your own strategy. If you see your neighbors having new gadgets or even a new car, you never know how they got them. For all you know, the company they work for has a lot of perks they get to enjoy. The Money site shared that employees at the Google Headquarters get to ear all day for free.
If this was you, you would have a lot of excess funds in your budget which is originally allocated for your food expenses. If your neighbor has these types of benefits at work, it frees up their budget for other expenses. That may be the reason why they can afford that hot tub in their garden that you envy. They have the money for it because they get amazing benefits at work.
Your neighbors are older than you
One thing you need to factor is the age when you see other people who might seem more accomplished than you. If they have paid off their house, it frees up a huge amount of money in their budget. They can use this to buy a new car or even get the house renovated to make it look better. So before you start feeling jealous of people around you, focus on your own goals and work hard to achieve them.
How to manage your finances better
Now that you have an idea why you should not feel bad when people around you seem more successful than you, here are a few things you can do to help you with your finances. Take a look a some of these examples and see which one fits your personality.
Do not live off on your credit card
If you know how to use your card to the fullest without sacrificing your finances, then, by all means, use it in your budget. However, if you cannot control your spending then you have to limit your credit card use. You have to understand that using your credit card can actually help you financially. The problem starts when you start to pay the minimum on your card or worse, stop paying your bills.
To help you manage your finances better, you need to make sure that you are current with all your payments. When it comes to credit cards though, this is a little bit tricky. Staying current can lead to being content paying the minimum amount on the card. This might help you lower down your current payment but you will end up paying more in the end.
Look for great deals
If you want to make sure that you get to manage your funds especially your expenses, try and keep an eye out for special dals. For one, wait for a sale or when prices dropdown before purchasing what you need. There are coupons you can use to help you pay less at the check out counter. Make sure to remember this next time you need to buy things you need and want.
Do not underestimate the value of a household budget
If you want to manage your finances better, the number of tools you need is your household budget. It gives you an idea of how your funds are spread out over different accounts. You just need to write down all the money coming in as well as where they go every month. If you only have one job, the income part is quite easy. It might only get a little bit challenging if you start looking for other income sources such as passive income or even other investment ideas.
The net important part of your budget is your expense list. This gives you a detailed rundown of where and how you spend your money. With your income and expense list, you now have a better chance of making informed financial decisions. If your budget shows that you spend a big amount on takeout food, it might be time to start cooking your meals at home. The NY Post even shares that Americans spend at least $70,000 on takeout food over their lifetime.
Your budget will give you a clear idea of where you need to make adjustments. If your income is falling behind your expenses, you need to increase it. If not, you can choose to lower down your expenses. Doing so will free up some funds you can reallocate to payments or savings. You will be able to do all these if you have a budget to work with.
Do not be envious of the success of people around you if you want to manage your finances better because each situation is different. Other successful people might have been working hard longer than you. Just keep to your goals and focus on your own path.