Tag Archives: money management

Financial Compatibility Matters – Why You Can’t Be Afraid to Discuss Your Financial Situation with Your Partner

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They say that one of the number one reasons why relationships fail is due to money matters. While many do not want to believe that, I can see how this can happen. It can be stressful enough making and managing your own money. Then factor in your partner’s money habits which can either make your life more stressful or potentially easier. Let’s also forget that money does NOT buy you happiness. Sure, maybe it can make your life easier and there is more financial security but money does not buy a happy relationship. It is for this reason that it is important to recognize that being with someone who has a lot of money does not necessarily guarantee a lifetime of bliss with this person because at the end of the day, you want to find someone who you love unconditionally–with or without a big bank account. There is also a reason that there is the saying, “more money, more problems.” When someone is rich, with that comes more financial responsibilities and also the risk of mismanaging their wealth which could mean being in a ton of debt later in life. On the opposite extreme, being with someone who is a broke bum can understandably bring upon added stress to your life. It can also be an extremely sensitive subject to discuss because you do not want this person to feel even worse about their financial situation. So is it important to still talk about finances and is there a safe way to approach it appropriately?

The short answer is: YES, of course it is important to talk about money in your personal relationships! I can understand why people do not want to because you may feel that it is not your right to know but if you eventually plan to buy a home together, pay joint bills, and essentially merge your adult lives together–then having some money conversations are absolutely needed if you want to build a strong financial foundation together and to ensure you both see eye-to-eye when it comes to money. So often, you see one person who is a great saver and then someone who cannot save a dollar if their life depended on it. This can cause a lot of arguments and tension if you have two people who simply do not agree on how their money is spent. Looking at it from both points of view, does the saver want the spender to spend all their money? Does the spender want to feel deprived and that the saver is constantly controlling their money? These are things that couples really need to think about. From personal experience, I have dated people who were bad with their money and did not know how to save. Over time, it got very annoying and although that was never the definitive reason as to why I would break up the relationship, this was something that was always a consideration because I did not want to be with someone who had zero discipline when it came to saving their money and did not prioritize their financial future.

There are a few safe ways to approach the subject without necessarily bringing it up directly right away. For starters, observe your partner’s behaviors when it comes to money. Is this person very frugal when they order food from a restaurant or does this person like to order everything from the menu? What are things that this person likes to spend money on–is it a daily coffee, vacations, material goods, and/or spending categories? Does this person talk about money goals such as paying off their student debt, saving up for enough money for a house, etc.? There are many things you can observe without asking.

As time goes by within your relationship and you get to know each other better, it is okay to open up the conversation and to talk about each other’s personal finances. It is better to be open and upfront than for it to be a guessing game or to feel like you can’t talk about these things. People should not be afraid to be open and honest, even when it comes to their financial situation. It will either bring two people closer together or further apart. If it does end up being a conflict within the relationship, it is much better to know now and to break it off rather than to stay and then find out when it is too late that the two of you are not financially compatible.

3 Ways to Avoid Living Paycheck to Paycheck

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It is hard escaping news headlines that a higher percentage of people are living paycheck to paycheck, even people who have a high annual salary. There are many contributing factors that are causing this including the rate in which inflation has increased over the past year. Aside from that, when people make more money, they also tend to spend more because they feel they deserve it or that they are comfortable enough to spend more while saving at the same time. No matter how much money you are making, it is essential to make money management a top priority. This will allow for yourself to be in a better financial position in the long run and ensure that you won’t be living paycheck to paycheck. Like most things in life, it is never too late to start and develop the right habits to get you on the right financial track.

Set Up Automatic Payments Into Your Savings Account – Whatever amount you can comfortably afford, determine a set amount that will automatically get deducted once a week and then you do not touch the money. This is a quick way to build savings without really thinking about it. If you are more disciplined, you can manually put the money into your savings every week and change up the amounts as needed depending on how much extra that you have left over. Every dollar counts so any little bit that you can put towards your savings is better than nothing!

Reduce Consumption and Eliminate Non-essentials – I recently wrote about how reducing consumption is a great way to save money. This could really range from anything from using less energy/gas to eating less at a restaurant so you have a second meal to take home at a later time. There are so many ways in which you could reduce what you consume each day. It is also smart to examine your monthly subscriptions and other services/products that you currently have and then eliminate the ones that you do not really need. Do you pay for cable or a gym membership that you never use? Then this might be the time to cancel these services altogether so that you can allocate the money into your savings and/or investments.

Track Every Dollar That You Spend – If you follow my blog, you probably have read me talk about this consistently but it is important to track your expenses everyday. This helps you stay accountable with your financial decisions and can also serve as a tool for analyzing your money habits. Did you notice that you spent more money on non-essentials last month? Then you can strive to reduce your spending the following month. The only way you can truly track this is by actually taking the time to record all your expenses in order to stay focused both on spending less while maximizing your daily savings. If you can do both of these things at the same time then you will find that you will not be living paycheck to paycheck anymore.

When You Have to Pay, You Pay Attention – How I Became Financially Savvy With These 5 Money Principles

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When it comes to personal finance, I think this is an area in life where people can always improve and there are definitely ways to plan ahead to ensure that you are on a road to a better financial future. I am fortunate in that I had strong parents who taught me very good money lessons at a young age which shaped me into the financially savvy person I am today. I would not say I am an expert but I can provide some basic money principles that work and it is never too late to adapt them into your life no matter what your financial status is right now. With the right practices put into place, you can achieve your money goals and become a financially independent individual along with passing these money principles down to your children and the people you care about most.

I want to start off by saying, this expression is absolutely true when it comes to money–“When you pay, you pay attention.” Meaning that when you have to pay for everything, you do very well pay attention to what you are spending your money on and every little cost along the way. As soon as I could get a job as a teenager, I was held accountable for paying for everything. My parents never paid my cell phone bills, car insurance, clothes, entertainment, etc. Although they were never poor and as an only child, they easily could have covered all these costs–they still refused to pay for these things. Think about it: If they provided me with all these basic necessities, what would be the incentive to go out and get a job? Their attitude from the start was, “If you want something, you need to work for it and figure it out yourself.” Their underlying message was that I had to work for things like everyone else in this world while also instilling their full confidence that I had the capacity to earn it all by myself without relying on their credit cards and bank accounts. Their tough love approach was effective as it provided me with a burning drive at a young age to work hard along with becoming money motivated for not only survival purposes but for everything beyond that. In other words, besides paying bills and basic needs, anything else I wanted that extends beyond that such as a nice vacation, I can create the resources to make it happen. 😉 [Side note: It is for this reason, when people I know tell me their children are spoiled, don’t appreciate anything, and don’t work–my response is to cut them off financially. Sounds harsh but it is the dose of reality and tough love that is needed to build their autonomy, confidence, work ethic, and self worth while also doing them a huge favor in the long run. Trust me.]

My point in sharing this is to show how I became financially savvy at a young age because my parents taught me the value of money by having me always have to work for it. These are principles I have applied since my youth and that I continue to live by to this day.

Spend Less Than You Earn – How often do you see people spend money that they don’t really have? I see people do this all the time where they barely can pay their bills and do not really have a savings in the event that they need it for an emergency (such as the current pandemic) which is why I would rank this as the most important money principle. It is essential to spend under your means in order to prevent sinking into debt and giving yourself the opportunity to bank more money into your savings/investments.

Focus on Excelling in Your Profession – It does not matter what professional field that you chose as there is always room for you to build your career which typically means a higher salary over time. If you are extremely good at what you do, people will want to pay you for it and/or promote you so focusing on your career should be a main focal point for both personal development and financial growth.

Find Multiple Streams of Income – I suppose if you chose a career path that already provided you a hefty salary, there is not as much of a need to find multiple streams of income but I do believe this is something people often overlook and is a missed financial opportunity. Most people are content with just having their weekly job and will call it a day which in certain situations, I understand if the job is incredibly taxing and takes up the majority of your life where there is little room for free time. However, what if you found something that you loved to do and could also make a little extra income? Anyone can turn any small hobby into a few extra dollars or sometimes a ton of money (hey, why limit yourself? 😉 ) and there are always people willing to pay for services that they may not like or have the expertise in but you do.

Save As Much as Possible (Every Penny Counts) – People often underestimate that every little bit saved adds up to a big amount of money over time. For example, if you enjoy getting a cup of coffee everyday, you might think it’s such a small expense, why not treat yourself every morning; however, so much money can be saved just by cutting back the amount of days you go a week or simply by making it yourself at home. My point is, every little bit saved is extra money in your pocket that can be used for bigger and better things for your future.

Make Investments to Grow Your Money Over Time – There are many things one can invest their money in, such as real estate but first and foremost, you absolutely need a retirement fund. I know it is something most people do not really think much about until they are actually getting closer to that stage of their lives but this is where you need to think long term and start investing NOW! I always contributed towards an IRA thanks to having a financially savvy mother who had me open an account when I was 18 years old (all my money of course, not a cent from my parents) but looking back, I wish I was putting in much more as I could be benefiting from all the compound interest. As I mentioned before, the good news is–it is never too late to start investing and now I maximize my IRA every single year because I am more consciously aware of investing and have the money to do so. Even if you are not currently in a position where you can maximize your contributions each year, remember that every little bit you invest now will grow into much more money in your future so anything is always better than nothing. The key is to start a retirement fund if you have not already done so and to consistently add what you can each year.

3 Qualities Needed to Attract an Abundance of Wealth

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Most people want more money and strive for financial security; however, many find themselves in bad financial situations. That could include having endured a hefty amount of debt, barely being able to pay the bills, or simply not being in a position to save and/or invest their money. No matter what your situation is right now, there are ways you can change your financial fate and be on the path of attracting more wealth. This first comes from within and examining your money mindset while adapting these qualities that can help you accumulate more wealth over time.

[Money] motivation– It is one thing to be motivated in various areas of your life but to become wealthy, you specifically need to be money motivated. By this, I mean you are driven to want to earn a lot of money, not simply being comfortable with having enough to get by each week. People who are money motivated are not interested in just having enough money to survive and often times you will never see someone who is money motivated ever broke. Why? They are so money motivated that the idea of being broke is not even an option or way of life. In their minds, it is an unacceptable so things never get that financially dire. Now a person might start off not having much money or perhaps poor which would propel this person to become money motivated. As a result, you often find these people to really maximize their money earning potential because it stems from their deep money motivation.

Responsibility – Responsible people tend to have the ability to save money and large quantities of it. Being able to save means more money in their bank accounts. I strongly believe that it does not matter as much how much a person can earn but how they ultimately manage their money. People who make less money still have the potential to accumulate wealth by simply being exceptional savers which means it might take them longer to become wealthy but at least they’re on the road to financial security. Whereas on the opposite spectrum, there is a reason why you see millionaires and lottery winners go bankrupt. This is a classic example of poor money management. Which translates to irresponsibility which is why it truly is essential to be responsible when it comes to your money.

Discipline – Discipline applies both ways when it comes to your overall money management. It applies to how you save and how you earn. If someone has enough money to buy something but says no, that requires a high level of personal discipline. This could apply to very expensive items but also inexpensive items that by not spending, a lot of money is getting saved over time. I always say that every dollar counts which is why it is important to save on both the little things along with high ticketed items. In regards to making money and elevating your earning potential, you also need a good amount of discipline to put in the time and work that is needed to make the money. You might feel overworked or just want some personal time off but thanks to being disciplined, you recognize the reward of earning the money than being lazy and not working for it. Discipline essentially requires a no pain, no gain mentality. You do what you have to do to earn the money but also preserve it by saving and investing it as much as you can, even if that means giving up material goods and services that you would normally spend your money on.

[On a final note, I can tell you from my personal life experience, that having these three qualities are highly effective in building wealth. I would not necessarily classify myself as rich (yet 😉 ) but I can tell you that I live a good life where all my essential needs are met along with having both an emergency savings and retirement funds that I continue to grow thanks to having money motivation, responsibility, and discipline].