The Importance of a Financially Fit Mindset

Simply put a financially fit mindset is one that allows you to think long term whilst still enjoying the short term. Truth be told when it comes to basic money management, most of us know what to do, saving money, having an emergency fund, investing and so on however developing good money habits and actually meeting financial goals is something easier said than done. One of the key skills to consider in developing good money habits is discipline; sticking to a monthly budget when you’re still starting out is definitely something easier said than done, the guilt alone from previous financial mistakes can make it difficult to meet financial goals and push you further down the rabbit hole of mindless spending.

Understanding your money psychology is something you should consider doing first, your attitude towards money is something that has a very large influence on your spending habits. A good way to go about this is to list how you feel each time you are faced with making a financial decision, think of how things like how you feel on payday, do you get a sudden urge to go on a spending spree?

Knowing and understanding your money mindset can help you identify habits that affect your ability to meet your goals such as merely sticking to your monthly budget and help you create realistic and attainable financial goals. On this note, remember to forgive yourself for previous financial mistakes, most of us have all been victims of the urge to suddenly raid your savings or got a carried away on a weekend or night out and ended up overspending, forgiving yourself will allow you to give room for developing healthier money management habits.

Delving into your monthly statement, understanding your expenses and creating a budget is a good place to start as this will help you determine attainable financial goals. Developing good habits is one way to ensure that you meet your financial goals. A good habit to consider starting off with is setting at least one hour per week to review your finances and see if you’re still on track to meeting your financial goals. You can do this with an app like 22seven or go old school with an excel spreadsheet or pen and paper.

For the unicorns in healthy relationships consider picking a mutually beneficial time to engage in what may seem as a daunting conversation where arguments may ensue, however having the money conversations from an early stage can be what serves as a catalyst for a long term healthy and financially savvy relationship. Money management shouldn’t be a burden allocated to one partner; after all personal finance is a basic skill that everyone should have regardless of gender, financial position or education level.

The very word “budget” can invoke the idea of sacrifice and a minimalistic lifestyle but if you’re anything like me and minimalism isn’t your cup of tea, you can consider drawing up a spending plan rather than a budget. A budget tends to imply limitations and cutting things out whereas a spending plan looks to provide a direction for your money. While both are technically the same thing, the difference, although subtle really lies in the mindset associated with each. With a budget you tend to look at where you have to cut back in order to meet your financial goals whereas with a spending plan you approach it with the mindset of “which expenses can help you attain your long term financial goals”.

A spending plan can include putting money into a TFSA, retirement annuity, buying your favourite pair of shoes and deciding how much to spend on entertainment and groceries. You tend to use language such as “this month I’m spending this much on entertainment and my savings” rather than the usual “I can’t spend more than this much” language associated with budgeting.

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Author: Sihle Hlatshwayo

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