As the new year starts, it makes a lot of sense to look into money mindsets to help you save and reach your financial goals. Some people even put together new year’s resolutions to have a guide on what they want to accomplish for the year. This is a great tool and a yearly strategy for a lot of Americans to get them moving and planning in the right direction.
That being said, it also helps to take time and dig into your current financial mindset. You need to understand your habits and where it has led you the past year. Yes, it was a very tough year that saw a lot of people lose their jobs or take home less than what they were used to getting. That is on top of about 11 million Americans getting the virus, according to the NY Times.
The health crisis swelled over and put the healthcare providers under a lot of stress. It was so much that hospitals were operating at maximum capacity. Healthcare workers pulling in double shifts just to be able to attend to all patients. In all these, the economy started to feel the pinch as well. This is why money mindsets are becoming important to help people manage their finances throughout this pandemic.
As the economy started to be battered by the pandemic, businesses had to close their doors and people were being let go from work. This made it a lot more difficult to get your finances in order. As the year starts, it helps dig deeper into your money management mindset. It can give you the chance to strengthen your finances and bring you closer to your goals.
Saving should be a line item on your budget
One of the money mindsets you need to take on this year is how you save money. Particularly at what point do you set aside money to save. A lot of people save what is left of their money every month. They pay their bills, allot funds for other expenses and then save whatever is left. For starters, being able to save money is already a big win. But there is one thing you can do to make this more impactful.
Rather than setting aside the money at the end, save money at the beginning. It should be a line item in your budget like any other expense. Pay yourself first and then you pay your other bills. Think of it this way, consider your savings as a recurring monthly payment you have to prioritize. When you do this, you will be more aware of your debt payments and adjusting them down to be able to save money.
Invest in yourself
One of the best money mindsets that can help you this year is to seriously consider investments. From a financial standpoint, it helps you save money over the years pushing you closer to your goals. If you are able to tap into passive investments such as stocks, equities, and even rent, that can help you save more for the future.
But you also need to invest in yourself! Forbes shares that investing in yourself is one of the most significant long-term investments you can ever make. It can be as simple as taking up a healthy lifestyle. The healthier you are, the more energy you have for work, and your family. You can also invest in upgrading your skills. The more you improve your craft, the more valuable you become in your industry. You can also choose to learn a new skill. This can widen your career options in the future.
When it comes to your finances, keep on learning as well. Read books on money management, take time to spend a few minutes a day reading financial blogs as well. Make it a habit to stay updated with current financial news as well not only here in the US but in other parts of the world as well. The more you know, the better your financial decisions can be down the road.
Do something you like
Money mindsets usually revolve around sticking to a habit that helps you strengthen your finances. But one thing you might miss out on is finding a creative outlet you need. It can be spending time on sports activities you love. If you love to draw or create art, then find time for your hobbies. It gives you that certain sense of peace and at times, pride in being able to excel in various areas in your life. It might even help you earn a little money on the side.
You might have heard about income positive hobbies and how they can be a great stepping stone for a profitable side gig. The idea is simple – you earn money doing something you love. If you love sports, why not teach younger kids? If you have a flair for writing, pick up a few writing jobs a few days a week. It might not even feel like work because you get to do something you are passionate about.
Remember why you are saving money in the first place
The challenges of the past year might make you think twice if goal setting and focusing on money mindsets this year are worth it. You might have lost your job and finding it challenging to get a new one. Your company could have asked you to log in fewer days a week as they try and manage their overhead expenses.
One thing that can help is keeping your goals on top of mind. Why do you wake up every morning trying to look for a job? Why do you spend your evenings looking for a side gig to augment your monthly income? Is it for your family? Are you saving for a house of your own? You might be planning to retire early? The same goes for when you are trying to save money – think of your goals. Your goals can help you re-focus and pivot back to putting in the work to reach your goals.
Increase your savings and not spending when you get a raise
There will be times at work where your pay would increase over time. When your side gig is picking up, you will also notice an increase in your monthly income. This is good news! This is what you want to happen. When you get an increase in pay at work, it means that you are doing a good job. When your side hustle is picking up, then you are on the right track. What do you do with the money now?
You could be tempted to start adding a few monthly payments to your budget. Maybe adding a gadget you feel you deserve. Or impulsively go and take an exotic vacation because you can pay for it over a few months. When your income starts to go up, increase your level of saving, not your spending. This will help you reach your goals faster.
Money mindsets can improve if you understand your spending
It sounds easy but having a clear understanding of how you spend money can help you get into the right mindset. Before you can plan ahead, you need to overcome present obstacles. And one of the most challenging is persistent financial problems that do not seem to go away. These can push you way off-course and keep you from reaching your goals.
You need to get to the bottom of the problem. If you have an impulsive shopping problem, you could be trying to keep up with people around you. It is also possible that you keep on buying shoes you don’t use because you always had hand-me-downs when you were little. Once you figure out your spending, you stand a better chance of correcting them.
You need to have better money mindsets this year to help you get back on the right track and reach your goals. The past year was tough but take the lessons you learned from it to help you manage your finances for the whole year.