Most of us always feel a bit out of control when it comes to money. Financial decisions seem to happen to you rather than you making them and you can’t seem to ever get ahead. Financial empowerment refers to strategies that help you take control of your finances.
Keep Track of Spending
Empowerment starts with knowledge. First, look closely at how you spend money. Although it’s a chore, keep track of every penny spent and keep it organized using a spreadsheet or software program. This will show you clearly where you’re wasting money and where you can tighten up.
Identify Bad Spending Habits
Once you see where all of your money is going, it’s time to ask yourself whether or not you’re okay with it. For example, if you spend lots of money eating out, that might be worth it to you if that’s something you really enjoy. But you’ll also find lots of instances where it just seems like waste.
Know Your Triggers
Just identifying bad habits isn’t enough. Usually when we spend too much, it’s for emotional reasons. Stress or some other external factor triggers your spending impulse. This is where you get out of control. Financial empowerment means regaining control.
Learn to understand your triggers. These can be external situations or internal thoughts and habits. When triggers set you off, choose alternatives to spending money. For example, when you feel stress, exercise or listen to soothing music. Replace the spending impulse with something healthy that doesn’t put a dent in your finances.
Set Goals
We don’t get anywhere without goals. Set goals for saving and spending. For example, tell yourself that you’ll only eat out once a week. Decide at the beginning of a shopping trip exactly how much you’re going to spend. When you set goals and stick to them, this gives you power over your spending. You won’t feel like you lost control and blew your cash.
Make Realistic Changes
When you’re making financial decisions, make sure they’re realistic. If they’re not, you won’t be able to stick to them and this adds to your feeling of powerlessness. Don’t try to do without the things that you really need.
Seek Help
For most of us, empowerment means doing it all yourself, but this isn’t the reality of it. Empowerment means taking responsibility for yourself. Part of this responsibility is knowing when you can’t do it alone.
When you need help, don’t be afraid to ask for it. Whether you need the advice of a parent or spouse to help make decisions or you need to talk to a financial consulting professional, do it. Asking for help is one way of taking control of your situation.
Chart Your Progress
The most important thing you can do to achieve financial empowerment is to chart your progress. Focus on the positives and successes and don’t dwell on your failures. Remember – failure is only a tough learning experience. Empowerment means moving forward from today and you’ll need your past successes and achievements to give you fuel.