You will be confronted with a variety of decisions in your financial life, so you need to develop the mindset that is required to make the right decisions when it comes to money.
Here are some personal finance exercises that can help you strengthen your financial mind.
Ask yourself questions about your spending
One of the best things that you can do is to start looking for ways to lower your spending. You can do this every time you make a purchase. Ask yourself these questions:
- Can I get the same quality product for a lower price at another store or from another brand?
- Do I really need this product? What if I did not buy it? Would I really miss it?
- Would I be better off if I spent my money on something else?
The goal in doing this is to get you in the habit of only buying things that you really need.
Only use your credit card to improve your credit score
Credit cards are dangerous because they are so easy to use, and making purchases when you do not have money in the bank can be very tempting. Consider only using your credit card in order to improve your credit score. This means making small purchases with the card and then paying off the purchases as quickly as possible. Do not carry a balance.
Save something every month
Saving money month after month can difficult. You do not have to save a lot. Your first goal should be to put away something every month, even if it is only $20 (or less). Be confident that if you develop the habit of saving, then it will be easier to do when you have more money to save.
Plan for a rainy day
It is impossible to plan for every eventuality, but you can start saving a few dollars each month in a “rainy day” fund. Then, when something unexpected happens, you will have some money to put towards the extra costs. The goal should not be to pay for all these unexpected expenses, but to help cover them partially. You can plan to get an online personal loan, which is easy to be approved for with a bank statement and pay stub, to cover the rest of the costs.
Finally, you do not have to give up all enjoyment. Rather, plan to pay yourself a “salary” each month. After you have made your necessary payments and set money aside for food, gas, etc., give yourself some money to spend on whatever extra things you like. It does not really matter how much you pay yourself, it matters that you realize that “spending money” should always be a part of your budget.