We all remember the “Once Upon A Time” moments in our lives when we used to get excited for a small allowance to splurge on our favourite sweets or snacks. As we grew older, we also remember learning how to save up those small allowances to buy cool jeans or an item we had been longing for; money seemed simple enough. Eventually, much to our chagrin, we all grew up and the concept of personal finance is an ever-present cloud that looms over our lives, no longer just a side thought for when we get a sweet tooth.
The inception of this anxiety is different for everyone; it can feel as if this hovering cloud is too complicated and ready to burst at any moment. While this can be true and financial complications can very much happen, this does not mean that there is a need to constantly be worrying about your finances. There are numerous ways to battle that, one is investing your money and gaining financial literacy via regulated and trusted digital investment platforms such as Bitpanda, whose mission is to make investing, financial education and trading digital assets accessible and easy. Here are the five tips to help you on your financial journey:
Keep Track Of Money Flow
A common habit that people have when they feel a bit nervous or anxious about something is to avoid the problem in the first place. You are not doing yourself any favours if you never open your account to take a good look inside.
Sometimes, we might all be afraid of what we might find; sometimes we don’t want to be confronted with bad decisions. Either way, being transparent with yourself and your personal finance is key to understanding what you are doing, why you are doing it and how to avoid any unnecessary surprises.
Understand Your Tendencies
A lot of anxiety stems from the fact that a significant amount of money tends to leave your account leaving you with a big question mark at the end of the month. Knowing your tendencies and what you like to spend your money on will help you analyse if many of those purchases are necessary or how you can fit them into your budget. This way, there will be no surprises and you can comfortably check up on your finances when you need to.
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Know Where To Ask For Help
It is considered a luxury to have somewhere to go in the event of a financial emergency and there is a lot of truth in that. Not everyone was blessed with being born into a royal family with a bottomless bank account ready for the taking when a recession rolls around. However, it is important to know where your emergency exits are, should they be available to you. They do not always have to be the billionaire uncles or lottery winning great-aunts; they can be friends, institutions or even the government.
It is vital to know where to go in case things go wrong and to know how to help yourself. Your long-time friends might be able to help with some groceries or your government might have programmes in place to help people in your situation. Knowing where you will go and what you want will make the biggest difference during a difficult time, thus calming some anxieties.
Build A Safety Net
After you have come up with a good exit strategy, you need a safety net in place so that you never have to use it in the first place. As the saying goes, “Once you have a plan B, you never actually need it.” It is up to you to build yourself a stable safety net to weather the storm. What you consider important is dependent on your lifestyle and necessities, but it is generally a good idea to save up enough to last you until things pick up again. Knowing you have a cushion to break your fall will significantly calm some worries.
Finance influencer @poisedfinancelisfetyle agrees wholeheartedly, with her post sharing insights about the “safety net” mentioning a first aid kit for your finances if things go south. She says it’s all about securing the safety net and knowing where to go for your emergency fund.
It is much easier to curb anxiety if you know you are actively working towards a goal and making steps for your future. The reality is: no matter how much income you’re earning, it’s easier than ever to spend it all. A little bit here, a “treat yourself” moment there; these things add up. The millennial generation is often referred to as the ‘lost generation’, which means we spend our lifetimes trying (and failing) to reach our long-term financial goals.
This needn’t be the case if you set clear financial goals. You just have to know where you want to be, where you want to go, and what you want your money to be used for in the future. Having a goal will be the incentive needed to consider every spending decision more wisely, thus saving you money in the long run.