Managing your mental well-being is a lot like managing your financial health; you need to understand your toolkit and yourself to manage both well.
If you haven’t yet finished part 1 and part 2 of my basic money management series, now is a good time to head over to those posts. If you’ve been waiting on my last non-budgeting principle, let’s get straight to it.
Basic Money Management Tip # 3: Get curious and take action.
You’re saving and you have clear goals. Now, it’s time to know what you’re working with and do the work.
Knowing what you’re working with includes your tools and yourself.
In my undergraduate years, I spent a lot of time getting to know myself and my financial tools. In fact, that curious part of me hasn’t changed and I hope it never will. If you can relate, I’m wishing your curiosity stays lit too.
You don’t have to be a student of life or avid learner to be financially well, but it doesn’t hurt to try learning something new. In fact, you reading this post is a great step forward and I’m glad you’re here.
To keep you moving forward, here’s a slew of questions to get to know your financial tools and yourself a bit better:
Financial tools include your debt, credit, accounts, investments, and people—financial advisers, planners, accountants, or tax professionals.
Knowing yourself includes taking a closer look at your habits, priorities, and skills.
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Get curious about your financial tools.
Debt: Understand the money you owe.
Do you have credit card or loan debt?
How much interest are you accruing?
Do you know what types of loans you have?
If you took out federal loans, are they subsidized or unsubsidized? This is important to know because the latter accrues interest immediately.
Do you know your repayment options?
Do you know how much and how long you’ll need to pay if you stick to minimum payments only?
Credit: Understand the money you can borrow.
What’s your credit score?
How much credit do you have?
What’s the interest on your credit?
Does your credit have any perks, such as cash back or travel rewards?
Are these too many questions to handle? Take a deep breath with me and keep reading, or skip around. I have resources linked further down to help make these questions more manageable.
Accounts: Understand where and how your money is being held.
Do you have a checking account? Can you set up direct deposit? Does your checking account have perks, such as interest, keep the change, or cash back?
Do you have a savings account? What’s the interest on your savings account?
Do you have a CD or a money market account?
Do you have account minimums or fees?
Investments: Understand your longer-term savings.
Do you have an IRA, a Roth IRA, or a 401K?
Do you have employer 401K matching?
Do you know your contribution limits?
What does your portfolio look like: stocks, bonds, real estate, or a mix?
People: Understand the people who can help you.
Do you have or need a financial adviser, a financial planner, an accountant, an investor, or a tax professional?
Can you hire or exchange services with someone?
Do you have family, friends, or coworkers working in finance or pursuing a degree or certification in the financial industry? They might be willing to offer advice or discounted services.
I’ve never done my taxes because my mom’s coworker files our taxes, and I’m pretty sure that’s one reason my mom and I have saved money over the years.
Enlisting a more qualified professional ensures we’re not leaving money on the table.
Asking a professional to help or do the work for you is a game changer. You can use that extra time and energy to apply for scholarships, work extra hours, or improve your financial literacy while someone else saves—or makes—you money too.
Knowing what you’re good at and what you need help with is powerful, which leads me to questions geared towards getting to know yourself.
Get curious about yourself.
Habits
What are your spending habits? What do you buy and when?
What types of impulse purchases do you make? When do you impulse buy?
Priorities
What are your priorities?
What are your non-negotiables?
What bills do you have to pay and when?
Skills
Do you have any skills you can monetize or exchange for services? Can you tutor, babysit, clean, or walk dogs for example?
Instead of paying someone or buying something, can you do it yourself and save in the process?
Can you learn a new skill, like sewing or gardening?
Once you’ve gone down the rabbit hole a bit, it’s time to actually get to work. Information overload is ineffective without action—a note to you as much as it is a note to self.
To combat analysis paralysis, here are some ways you can start doing the work to improve your financial wellness:
Spend time learning through productive procrastination.
If you’re already on YouTube or Instagram, why not throw in a video or article by The Financial Diet into your queue? One of my favorite videos is one of their oldest, 12 Ways To Be Better With Money Today, where tip #10 explains how to best pay off debts.
Is this a real Winston Churchill quote? Either way, start something today with productive procrastination.
Another site I spend my procrastination time is NerdWallet because they write monthly comparisons of credit cards and high-yield savings accounts. I recently opened a new savings account with a higher interest rate and made $10 last month by simply moving my money to a different bank.
One last, but very important, resource to peruse while procrastinating on that paper, presentation, or job application is StudentLoans.gov where they have entrance and exit counseling, along with a repayment estimator. The resources on this site gave me a better understanding of my loans and helped me create a game plan for repayment during and after undergrad.
If your school has financial services, such as free webinars or scholarship listing, I highly recommend you take advantage of those resources too.
My biggest tip with scholarships or grants is keep applying. You’ll never get free money if you don’t apply.
Replace “bad” behaviors with better habits, then use the principle of habit stacking.
The Power of Habit helped me understand the science behind habits, particularly the formula of cue, routine, and reward. The formula engages you to observe and experiment with your behaviors, like finding yourself online shopping while procrastinating on an assignment.
When you find yourself online shopping, try replacing that behavior with something else, like paying your savings account or checking if there are open scholarship applications. Once you’ve found a behavior that stops you from online shopping and making impulse purchases because “it’s on sale” use the power of habit stacking.
“One of the best ways to build a new habit is to identify a current habit you already do each day and then stack your new behavior on top. This is called habit stacking.”
For example:
After I clean my wallet or purse, I will put all the change and five dollar bills in my piggy bank.
After I pour myself a glass of water, I will watch a financial video before getting back to work.
Before I buy new skincare products or shoes, I will take stock of what I already own.
Ask the hard questions, say no to whatever doesn’t align with your goals, and say yes to trying new things.
After investigating how you spend your time and money, your priorities, and your skills, it’s time to ask the hard questions:
Am I living aligned to my goals and priorities?
Are there people in my life that don’t align with or support my goals and priorities?
Am I getting paid fairly for what I’m doing now?
Do my actions and belongings serve the person I am today and the person I am becoming?
These are only a few of the hard questions I routinely ask myself, but they reveal any gaps I may need to work on in order to reach my fullest potential. I’m not always happy with my answers, but awareness is always the first step in doing better than yesterday.
#cultivatethelifeyoulove @powwowworldwide | Original photography by Anjeliqueca
Once you identify the gaps you need to address, say no to opportunities and people who distract from your goals and priorities. Then, say yes to opportunities and people that support the highest version of yourself.
When it gets overwhelming, the best work you can do is to ground yourself in gratitude.
What are three things you're grateful for right now? List them on paper, say it out loud. They don’t have to be big things, sometimes it’s the little things that make us happy.
When you’ve settled into this tiny moment of gratitude, repeat this mantra:
I am exactly where I need to be and I have the courage to take a small step towards where I want to be.
Because we’re all starting small on something, somewhere, right?
I hope you enjoyed my basic money management series. If you found the series helpful, please share with your loved ones, click the heart, or drop a comment below.
Wishing you a lovely journey to financial freedom!
Disclaimer: All thoughts and opinions are my own. Links to external sources in this post are not affiliated with this site. Also, I am not a licensed financial professional. Make money moves at your own risk.
