Some people are seemingly born with an internal economic acumen that allows them to make money, save money, and use what they’ve got to build a better life. Others don’t. Fortunately, money management is a mindset that can easily be changed with internal dialogue and a few strategic moves.
Today’s post is offered by dsnews.co.uk to help those outside of the financial services sector better understand how to manage money and improve their quality of life.
Money Personality Types
First things first, it’s important to understand that there are multiple money personalities. There are seven, and each has a few generalized characteristics. Most people tend to follow one of these categories, which include:
- Compulsive saver. Saves every penny and looks at money as their primary source of security. Bargain shopper and dislikes irrational spending.
- Compulsive spender.This is the one that every dollar burns a proverbial hole in their pocket. May experience frequent buyer’s remorse.
- Compulsive moneymaker. Thinks life is most valuable when you have more money and tends to crave recognition for their success.
- Usually financially comfortable but does not look at their bank account before making major life decisions.
- Saver-splurger.A combination between compulsive saver and compulsive spender that can save for months on end and lose it all with one shopping trip.
- Takes lots of risks but also feels strongly during wins and losses.
- Always preparing for the worst and fearful that they’ll lose what they have.
To find out your money personality, click here to take the Money Personality Quiz.
Make Money with an LLC or an Updated Resume
Few of us have the problem of having too much money. Not having quite enough is a more common conundrum. Although, as the Life Skills That Matter blog points out, you don’t necessarily have to peek at six figures to be happy, you have to have enough money to support your lifestyle. If you’re not making enough, follow these tips:
- Earn more. This doesn’t mean asking for a raise (unless you truly deserve it). Instead, look for ways to open more revenue streams for yourself. Starting a business is one example. A quick tip here: learn how to incorporate on your own using a formation service. This is less expensive than an attorney, and you’ll get plenty of benefits as an LLC member, such as management flexibility and liability protection. Do your research before choosing a provider for this service.
- Change careers. If you’re not quite confident enough to leap directly in entrepreneurship, there’s also nothing wrong with earning a certification to enter a new career, such as social media director, HR manager, software developer, or research analyst. If you go this route, make sure that you have a great resume in hand. Even if you’re changing into an entirely new industry, you’ll need to showcase your background and knowledge. Show off your skills and experiences using an online builder to make a resumethat lets you pick from professional-looking templates that you can customize with everything from a photo of yourself to your educational and professional experience.
- Cut your spending. Technically, cutting your spending is not making more money, but it will help you save more. Take a close look at your spending habits. This will vary according to your age, and those born in the millennial generation tend to spend less than Gen Xers, according to the World Economic Forum. If you find that you can’t make your mortgage each month, there’s nothing wrong with cutting your cable, switching to home-brewed coffee, or simply learning how to cook instead of dining out each day.
Major Money Mistakes
Regardless of the type of money personality you have, we all make mistakes. There are a few, however, that are worth paying attention to so that you don’t make them in the future. These include paying more attention to short-term gratification over long-term success and being overconfident or overly fearful in your ability to manage money.
One example of looking at today instead of tomorrow where money is concerned is when you are getting an education. While it is certainly true that not all careers require a college degree, the average white-collar worker can expect to earn more than 1 ½ times with a master’s degree than with an Associate’s alone. In fact, unemployment rates go down the further up the educational ladder you climb. With less than a high school diploma, unemployment rates are around 5.4%; this drops to just over 1% for those with a doctorate.
A Change Of Mind
Finally, even if you’ve identified your money mindset, you have to look at the way you look at dollars and cents. Quit comparing yourself to others, and don’t look back to your past financial mistakes as a roadmap to your future. Remember, money comes, and money goes, and you have to enjoy your life today, empty pockets and all.
Ultimately, the way that you look at money has a major influence on how you live your life. But, if you need to earn more, there’s nothing wrong with starting a new business or even changing careers altogether. But all of these changes will be for nothing if you don’t recognize your current earning and spending habits and change the way you look at money.