Improving Your Relationship With Money: How to Manage Your Personal Finances

Managing your personal finances may not always be easy, but you can improve your relationship with money. Do you control your money or does it control you? When you succeed at improving your relationship with money, you will find that you gain financial freedom and independence. Acquiring financial independence is worth striving for at any time during your life or your career

Steps to achieving financial freedom and independence

Begin by looking at your personal financial situation closely. In other words, determine your actual income first. You may be wealthier than you realize when your finances are calculated on an annual, monthly or weekly basis. 

Learn how to budget effectively

At times, what your income is may not be causing the problem. The real concern may be how you use that income. Determine what your fixed expenses are, and then look at variable expenses. On a regular basis, usually monthly, you will need to pay your fixed expenses. They do not have a lot of flexibility, but your variable expenses allow room for more effective money management.

Credit card management

Using credit cards can prove problematic with respect to your relationship with money, simply because of the high interest rates. Cutting up or curbing the use of credit cards may resolve these problems. You may be able to get your interest rates reduced.

Debit card management

Part of the difficulty with debit card management has to do with the availability of your money. It may be too accessible, particularly when it comes to taking out cash. You may be paying a fee for every debit transaction that you make, depending upon where you shop. These fees can add up quickly. Note that you may have additional bank charges too, so check your bank statements carefully.

Bill payment management

Paying bills in full and on time results in no extra fees, but overdue bills have extra fees added. Look at your bills immediately when they come in and check the due date on them. Make a point of paying them before the due date, rather than leaving them until the last minute.

Savings account management

Saving money every month is an excellent habit to get into. It is not always possible due to having a poor relationship with your money, or from being financially in over your head. You may need to limit your variable spending in order to manage your savings account successfully, but it will be worth your while.

Emergency fund management

Having an emergency fund will allow you more financial freedom, although setting it up initially may not be easy. You may have to limit your variable spending to establish an emergency fund account, but you will be glad that you did. Ask yourself what is the minimum amount of money you would need in an emergency. Set that amount of money aside and do not use it unless there is a true emergency.

Other financial options

Talk to a financial adviser, as it may be possible to sell some of your existing assets, property or non-essential items to increase your financial freedom. You may consider additional employment or working on a project that will help to increase your income over time.  

These are some of the basics for improving your relationship with money, but they are vital with respect to increasing your financial freedom and independence. Remember that to be and stay in control of your relationship with finances, you have to first assume control. The onus is then on you to accept that responsibility and act on it.