When your emotions and your budget aligns, you can live a life of financial empowerment!
There are many ways to utilize your paycheck, but it’s not all about the numbers! Gaining clarity regarding your money beliefs, what emotions those beliefs create, and embracing subsequent behaviors can enhance your decision making at the end of each pay period. Understanding how you think, feel and react to your own money will empower you to make sound financial decisions and build a strong financial future for yourself.
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It’s PayDay, Now What!?
Yes! It’s payday, now what?! That check is quickly burning a hole in your pocket. Priority one is to cover basic living expenses. Next lies in saving for the future. And third involves having some fun. Sound familiar?
We’ve all heard stories of professional athletes and famous — highly compensated — people who end up broke. They had a great income, but without understanding their money beliefs they found themselves in worse financial shape than anticipated.
Financial Decision Making is Emotionally Based.
Below are some examples of how emotional decision making may lead to feeling overwhelmed, hopeless and living paycheck-to-paycheck, along with some advice regarding those emotionally charged thoughts:
Suggested Spending & Budgeting Parameters
There are numerous ways to begin considering the best use of each paycheck — dare we say the “B” word? That’s right, BUDGET. There are hundreds of different ways to budget your money. Choosing the right approach can be confusing and overwhelming. Where do you start and what’s going to work for your monetary needs?
If you don’t have a clear idea of where your money goes each month, take the time to explore your spending habits. Print out several months’ worth of bank and credit card statements, grab some highlighters and categorize your spending into the basic categories above then calculate the totals for each. You might be surprised at your results! Since most of us use a debit or credit card for that “Fun/Personal Spending” category, we tend to spend more than we realize!
Pay Attention to Your Emotions AND Your Numbers
Your beliefs and emotions play a huge role in how you spend your take home pay. Pay attention to what your emotions are telling you and what your numbers are saying. With your emotions and numbers aligned, you can have a life of financial empowerment!
This article originally appeared in the Winter 2019 issue of Sass Magazine.