Financial freedom is important. We all want to spend our money mindfully, save for our future, find the ways to invest and feel comfortable with our finances. Some of us do better than others. However, there should be a fine balance for how much we should spend, and how much we should save.
I learned to save money at an early age. I was raised in a family where we always had to think one step ahead and about tomorrow. I grew up with this mindset, and came to a point that all I thought about was saving money and my future. Back in 2016, I went to Chicago, beautiful weather, beautiful city. I was recommended to visit a roof top brunch restaurant. I waited 30 minutes to be seated, and finally it was time to order my breakfast. Unfortunately, it took me at least 20 min to decide what to eat. The menu was very limited and the prices were extremely high. Even though I was making decent money, I was not used to eating out, and paying over $40 for a simple breakfast was not acceptable even in Chicago. On one hand, I was ashamed of leaving the restaurant. On the other hand, I did not see the meaning in paying a fortune for a simple breakfast. I felt uncomfortable, and ended up ordering an egg benedict which was $18, and a cup of tea for $12. That day I promised myself I would learn to spend money. My problem was when I spent, I would feel guilty and sad. I needed to spend and enjoy the money I was making. It was hard to break my habit and it took 3 years. Finally, I started to spend more. Also, when I eat out, I’ve stopped ordering the cheapest meal on the menu. I still review the prices, but I order what I prefer and like the best. Not only did I start to spend more money, but also, I learned to enjoy spending.
I still enjoy saving money, and I’m trying to do it in a healthy way. I have still areas that l need to improve, because I still do not know how to have a balance.
Here are the 5 steps that were recommended by the top financial advisors, which can remind and guide us to manage our financial status better
- Spend less than you make.
I know it is easy to say, and we know it already, but maybe today is the day. It is simple math. To be able to save, we should spend less than our income.
- Track your spending.
We need to be aware where our money goes. We can write on a notebook, use an excel file, or use an app. There are so many apps available such as account patrol https://www.accountpatrol.com/ .By tracking our spending, we can find our fixed expenses and variable expenses. Our fixed expenses are our expenses that we must have, such as mortgage, insurance. etc. We may not be able to adjust these expenses, so we need to focus on our variable expenses, the expenses that we can adjust such as gym membership, movie, eating out. By recording our expenses, we can identify the ways to cut our spending. The easiest way to adjust our spending is pay all the fixed expenses and save 10% to 15 % min and spend the remaining amount. Using cash can create more awareness when you are shopping.
- Pay all your credit cards’ debts.
It is important not to spend the money we do not have. Unfortunately, credit cards allow us to do so. If we pay credit cards late, we end up paying more than we originally spent. Once you pay all your credit cards’ debts, you feel better. I am sure you will sleep better as well.
- Invest
We can make our money work for us. I wish I was an investment guru, but I am not. However, I have savings accounts that I can recommend to everyone. At least we can all open a savings account where we can get 1.5% to 2% interest rates. And also, you can learn other ways to invest in the stock market, CD’s Bonds, etc.
These are the steps I am following. However, we must remember that financial is all about balance. What works for one person, will not for everyone. We have to learn to enjoy our money by spending on the things that we enjoy, while still saving for the future. I hope we all can achieve financial freedom and have a comfortable life style without worrying about our future.
I’m a Project Manager with a deep passion for both professional and personal growth. Designing and building the next generation of vehicles is incredibly rewarding, but it comes with its challenges—especially for someone as emotionally invested as I am!