In an interview with a CNBC writer, I was sharing my story and thoughts on taking control of my money. As I tried to sum up the benefits of changing my money habits, I realized that conscious spending has four life-changing benefits: vitality, intimacy, confidence and courage.
VitalityMoney worries can produce stress that affects mental, emotional and physical health. This pressure stems from the fear of running out of money between paychecks, accumulating debt, income volatility or a nagging sense of financial insecurity.
The keys to reducing stress and increasing your vitality are to:
Develop a realistic budget based on the least amount of money you may make this month. Use cash for groceries and discretionary spending.IntimacyMoney worries affect relationships by causing withdrawal and isolation. Intimacy isn’t just about sex. It refers to maintaining close and supportive friendships.
To improve your relationships:
Talk with your partner, or a friend, about money. Review your budget and set your spending priorities. Regardless of how tight your budget is, include a small amount of spending money.Set weekly, small goals. When it comes to changing behaviors and habits, small actions are more effective.ConfidenceFinancial chaos can make meeting the challenges of life seem impossible. Chaos, of course, leads to stress and diminishes our vitality. It’s a vicious cycle.
Here are three ways to eliminate financial chaos and increase your confidence:
Include a section in your budget for less-than-monthly expenses. Accumulating money each month for these future expenses will eliminate financial chaos.Build a $1,000 emergency fund as fast as you can. Sell stuff, have a fall garage sale with your neighbors or get a second job.Place your list of weekly, small goals someplace you’ll see them every day. Cross them off your list and celebrate your wins as you accomplish your goals. Celebration can be as simple as a high-five with your partner, calling a friend to brag or dancing around your living room.CourageDebt and unconscious spending erode courage, and in the process, steal dreams. Courage is about doing things that frighten us.
Begin with facing your debt. That’s scary, right? Make a list of all of your debts. List them smallest to largest. Be sure to note the minimum payment for each obligation. Find other things in your life that are frightening, and use your small-goal skills to start working toward accomplishing them.Take action to pay off your smallest debt – this could be one of your first weekly, small goals. When you pay off a debt, apply its minimum payment to the next one on your list.The process of taking control of your money may seem daunting, but small changes can pay big dividends. Don’t miss the opportunity for more vitality, intimacy, confidence and courage.
Durango resident and personal finance coach Matt Kelly owns Momentum: Personal Finance, www.personalfinancecoaching.com.