Many people take no care of their money till they come nearly to the end of it, and others do just the same with their time. -Johann Wolfgang von Goethe
Do you sometimes find yourself at night lying awake worrying about how you will pay next month’s rent? It’s raining and the roof you replaced is still leaking? Your medical aid are refusing to pay for your child’s operation?
You are not alone. The good news is, stop feeling embarrassed. 58% of South Africans indicated that they experience financial stress.
How do you become part of the 12% of South-African’s that are not experiencing any form of financial stress? My blog has suggestions for you.
The three primary sources of Financial Anxiety are Financial Dissatisfaction, Life Transitions and Financial Abuse. In this post, we will focus on the primary drivers of financial satisfaction. Which of these three do you relate to? Perhaps all three?
My research indicates that clients satisfied with the the role finances play in their lives display these behaviours:
- They do not borrow for short-term spending. They have a Freedom Fund to fund emergencies. They will also not make use of credits cards and store credit.
- They have an active saving strategy.
- They have clear, documented goals and are working towards these goals with focus.
- When unforseen events happen, they adjust their spending
- They manage credit use, as they know that it is better to earn interest than to pay interest. They also have a mindset that credit is a sign that they are living beyond their means.
- They keep track of income and expenditure.
- They will shop around for the best prices before buying or engaging in a contractual agreement.
It is then clear that by focusing on the following five behaviours, we can increase our financial satisfaction and decrease economic anxiety
- Set clear goals that are documented in a written plan
- Eliminate short-term borrowing.
- Create a Freedom Plan equal to 3to 6 months monthly expenses.
- Have a budget or spending plan to ensure you manage the money that flows through your fingers.,
- Think about larger and contractual purchases and their impact on your long-term goals.
Reading this, you most probably will go, yes, yes. We have heard this previously. So what keeps people from engaging in these basic acts?
Your money personality drives your financial behaviour. Research indicates that you need to build muscles to ensure that you can engage with discipline in the correct money behaviour:
- Acquire the appropriate level of financial knowledge so that you can act with confidence.
- Your money attitude will inform how you see and engage with money. Your attitude towards money is formed by your personality and events that shaped your relationship with money over the duration of your life. This attitude will inform how you relate to saving and spending as well as your future orientation towards money. Your attitude not only informs how you will manage your money, it directly influences your level of financial satisfaction.
- Your sense of control helps you to frame spending so that you can curb spending and secondly enable you to think pro-actively about your finances.
To help you build your behaviour muscle, it will benefit you to work with an experienced financial coach or financial planner with a coaching qualification. Such a person can guide you to understand your relationship with money. Secondly, this person can help you craft and implement a financial plan, support your dreams and be your cheerleader on this journey. To enable you to enjoy life now as well as in the future with the resources you have. We all need cheerleaders on our team.
I wish you a good night’s rest free from money worries.
Want to do a free financial health check, will take you five minutes.
