Many people cite money as the primary source of stress in their lives. According to a recent CBS News article, 64% of adults say that finances are the number one cause of stress in their lives – even more than work, family, or health! Of course, having money woes exacerbates problems in all those other areas. It’s logical to conclude that being able to manage money reaps some significant benefits, including adding to a person’s overall happiness quotient. Perhaps you are among those who are worried about how your finances are affecting your happiness. If so, read on to learn how to take care of your money better.
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Why You Should Manage Your Money
An article on The Balance website points out that many people hate to budget. Even the word “budget” feels restrictive to them. However, not budgeting can cause you to have less money in the end. Here’s why: Often you wind up overspending because you don’t keep track of where your money goes. When that happens, you end up with less money to not only spend on fun activities like movies or coffee with friends, but you also wind up having less pay for necessities like food, bills, and rent.
While some may argue that an evening out with friends is frivolous, it turns out that it’s good for your health and your happiness (and therefore, a worthy pursuit to spend your money on.) According to The Huffington Post, spending time with your friends makes you both happier and healthier. Going out is sometimes a part of that. Managing your money allows you to do that.
Many people don’t budget because they never learned how. It’s an acquired skill and a discipline like many other skills. However, even if you didn’t learn to care for your money when you were growing up doesn’t mean you can’t learn now. LifeHacker has a few tips for those who’d like to learn more about taking care of their money.
First, it’s essential that people learn to spend less than they earn. For example, if you take home $2,000 a month, but spend even $50 over your monthly budget each month, you’re going to be $600 in the hole by the end of the year. That money needs to come from somewhere. If you fall into this camp, start keeping a money journal. Write down every purchase, whether it’s a budgeted purchase or not. Your overspending habits will show themselves very quickly. You’ll also start to see where you can cut back so that you can begin to live below your means.
Second, make a plan for your future. This strategy not only includes what kind of career you want to have but also how you plan on spending your money in the future. Taking care of your finances isn’t just about your daily purchases. You also want to be thinking about significant expenses like buying a home or retirement. And if you’re planning on taking, even more, control of your future by starting a business of your own, you’ll want to prepare for that.
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In the latter case, you may need some extra help if you’ve never learned how to work a balance sheet. If that’s the case, think about pursuing an online accounting degree, which allows you to continue working while you go to school. If your local community college or university doesn’t have an online program, you can look into programs like the one that WGU offers. Plan on budgeting money for career training throughout your working life. People who have advanced certificates or degrees often earn several hundred thousand dollars more over the course of their lifetimes than those who don’t have these educational advantages. More advantages means increased options, which means more happiness. It’s as simple as that.
Make Your Money Work for You
Working for an hourly wage will only get you so far in the wealth game. If you genuinely want to improve the quality of your life and increase your chances for happiness, it’s essential that you learn how to invest your money. Money that you’ve wisely invested will grow and give you income down the road. This income is the money you’ll live on after you retire.
Hopefully, you’ll have not only enough to live on but also to travel. After all, just surviving isn’t as much fun as thriving. Only a small portion of your money should be put into a savings account. It won’t accrue much interest there. Instead, invest in your company’s 401K if that’s an option for you at work. Take the time to learn how to invest in other financial instruments like mutual funds.
If a lack of money is causing you some significant stress, it’s crucial that you learn how to manage your money. It may be challenging to learn how to take care of your finances. However, learning to do so also comes with plenty of advantages. It can lead to higher career satisfaction, more money to spend when going out with friends, and even the retirement that you’ve always dreamed about.