How To Create A Healthy Wallet

Have you ever daydreamed about diving into your very own money pool, like Oprah? It might seem like a distant dream, but in this blog, I’ll share Financial Tips and Tricks to keep your wallet healthy.

Imagine always having enough money in your bank account. What could you do with it? Travel the world, pay off your student loans, or help your parents with their mortgage? To have more money, you need to understand how money works.

Money is often seen as an either-or situation: you either have it or you don’t. When you have it, you spend it, and when you don’t, you stress about it. Money, in other words, is a source of stress.

We tend to avoid things that cause stress because stress isn’t fun. However, our actions don’t always align with our thoughts. We stick to our money habits, even though they may lead to stress. The question is, are you willing to change that?

Is working more the solution to more money?

Physical labor isn’t always the answer. Even if you earned an extra €1000 per month, you might spend that as well. Many millionaires managed to spend their fortunes and end up with nothing.

Have you ever thought about your relationship with money? Do you check your bank balance frequently, or only when you need to pay bills? Are you a big spender or do you save every penny? Do you truly know where your hard-earned money goes? The chances are, you don’t. We avoid thinking about it. That extra cup of coffee wasn’t necessary. That trendy hoodie you bought was excessive, and that new bike might end up collecting dust. Catch my drift?

Do you know your monthly spending?

Understanding your finances begins with insight. It involves tracking and documenting your income and expenses step by step. Write down everything you receive and spend, including all your fixed and variable monthly expenses. This includes rent or mortgage, utility bills, subscriptions, insurance, daily coffees, clothing, entertainment, and even pet expenses. Total your income and expenses separately and calculate the difference.

It might sound simple, and it is. The hard part is having the discipline to keep track and record all your income and expenses. Whatever the result, knowing where every euro goes is crucial to saving more.

Think of this as building a friendship. You want to know, understand, and appreciate each other. Similarly, money wants to be seen, flow, and grow. To understand your money, you first need to get to know it and determine where it is.

Financial Tips and Tricks for a Healthy Wallet

You can go old-school by buying a journal and adding a sticker with a fitting title, such as “budget book.” Even better, turn it into an affirmation like “I am rich.” This creates a positive connection with your “I’m rich journal,” motivating you to track your income and expenses.

Begin with your fixed expenses: the ones automatically deducted from your account or those you manually pay each month.

Then, every evening, jot down all your variable daily expenses for at least a month. Request receipts for everything and spend an hour each evening totaling them up.

By the end of the month, you’ll have a clear picture of your financial habits. You don’t need to judge or act on the information at first; understanding is the primary goal.

Another method is to use Excel. It follows the same process as described above but digitally. Excel offers free templates that you can use. By clicking on “Open more templates,” the second row displays a “manage my money” template. If you prefer working on your computer, Excel is likely a suitable solution.

I opt for a mobile app. There are numerous options available in the App Store (yes, I’m an Apple user…) when you search for “Money Tracker” or “Budget.” I personally use Money Pro, an app that allows you to add all your bank accounts, assets, and debts. You can set budgets for various expenses, add financial goals, and conveniently input expenses as they occur. An app simplifies the process of recording expenses compared to gathering all your receipts at night.

I use the free version and update my bank accounts, assets, and debts every month. So, in addition to daily expense tracking, I spend an hour each first Sunday of the month managing my finances. This regular attention strengthens my relationship with my finances.

Where is your money going?

In conclusion, the first step is getting to know your money. Where is it? Where is it going? How can you make it flow your way? After tracking for a minimum of three months, you’ll have a strong understanding of your spending habits. Only then can you evaluate your financial relationship. This is step two.

If you want your money to flow in a different direction, save more by the end of the month, and invest in your future, even without extra income, read “BEFRIENDING YOUR MONEY: THE ULTIMATE GUIDE TO FINANCIAL HARMONY“. Here, I’ll guide you on how to steer your finances in the right direction. Enjoy!”