By Martin A. Smith, CRPC®, AIFA®, President, Retirement Planning Financial Advisor™, Wealthcare Financial Group,...
Guest blog post by Judy Dove
Banking is now a part of our daily lives. We’re constantly swiping the debit card, checking account balances on the mobile app, transferring funds from one account to another, making an online purchase, etc. At this pace, we can easily get to a point where we’re managing our finances on autopilot mode, where everything related to our finances becomes second nature, so we no longer stop to think about it.
It’s important that you develop a financial savvy mindset that will set you up for success. Here are some ways to practice mindful and purposeful banking.
Identify Your Sneaky Spending Habits
Whether or not you have a written budget—and you should—you may have developed some bad habitual spending over time. That may include things like eating out because of convenience, buying name brand because that’s what you grew up on, and paying for things out of sheer habit … things you may no longer utilize like a gym membership, cable service or magazine subscription.
Think about what those bad spending habits may be and look through your checkbook register or banking statements. What are some of the purchases that JUMP OUT at you? Where is your otherwise extra cash going?
Get the Big Picture
When you need to make a financial decision, consider the big picture. Think about how each available option may affect your overall budget, goals, and plans.
Part of what makes up the big picture is also the habitual spending that can get out of control if you’re not careful. What’s the monthly and yearly cost on that $2 or $5 cup of coffee, or that magazine subscription? It’s easy to say that it’s just a couple of bucks, but it can add up to a lot over a period of time.
Seeing the big picture will motivate you to eliminate some of those unnecessary costs. Think of fun and practical ways to get rid of the habitual spending so that you don’t get discouraged. For instance, spice up your coffee at home with some exotic flavors and you won’t miss the one at that fancy café; get everyone at home to take turns cooking if it’s something you don’t enjoy doing.
Save with Purpose
How quickly can you access your savings? If it’s readily available with a couple of clicks on your smartphone, is it truly a savings plan? It may be a good idea to have back-up funds for your regular expenses in the event of an oversight, but that’s not a true savings plan.
Think about short and long term savings. Add special events to your budget; Christmas comes around every year, and your vehicle needs regular maintenance. Then, there are slightly bigger purchases or goals that take a little longer to save for, such as going on a family vacation, or buying a new laptop. And of course, the ultimate long term goals like the purchase of a home and retirement plan.
Learn to Say No without Remorse
Whether you need to learn to say no to yourself or anyone else in your life—like a child or spouse—learn how to do it without remorse. As much as I don’t like to say no to my children, I’ve learned to say it without feeling the guilt that haunts parents.
My tactic is simple; yes, I have money; yes, I could use it on that; but no, I don’t have money allocated for that particular item or activity at this moment. Then, we plan on a time frame for the purchase or activity.
This accomplishes a number of things:
- It’ll help you practice more mindful spending, which means you’ll get better at it.
- You’ll improve your relationship with your money, which in turn motivates you more.
- As an added bonus, it helps teach some of those same principles to your child.
Avoid the Poverty Mentality
The poverty mentality is considered acceptance of the idea that you are never going to make financial progress regardless of the decisions you make. According to a Time.com article, one of the reasons some people remain in poverty is that they feel powerless to change their circumstances.
This mindset makes it easy to make one bad decision after another without putting much thought into it. On the contrary, there are many ways to become more financially empowered:
- Educate yourself in the ways of banking – Marine Federal Credit Union offers its members financial education
- Take control – Determine whether you need to make some lifestyle changes in regards to your finances, and make a decision to do it.
- Plan for the expected and the unexpected – Create a budget that fits your family’s needs and don’t forget to include emergency savings, in addition to home and vehicle maintenance and the like.
There are many ways you can contribute to your financial success, but it all starts with your mindset, followed by small steps toward your goals. If you’re not sure of your path, reach out for financial counseling. You’ve heard it said that mindset is everything!
About the Author
Hi there! I’m Judy Dove, founder and blogger of personal development and self-awarness on Sensible Dove. While I blog about these topics, by trade, I’ve been in the financial industry for almost a decade and I’ve personally seen how lack of mindfulness and purpose can affect one’s financial decisions. I hope these tips are as helpful to your as they have been for me throughout the years.
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Information appearing in this article is obtained from sources we believe are reliable. The information may not be a complete statement of all available data and is not guaranteed as such. Marine FCU is not responsible for the contents of this article and advises its membership to investigate claims before following the information provided.