Do you want to be a smart money manager? You would promptly reply "yes". But, do you always think of money in order to handle your finances the smartest way? If "yes", then you are wrong.
Check out whether or not you're going in the wrong direction by doing these 6 things.
1. Thinking about money all the time
Several researches have found out that if you think about money all the time, which you might do in order to manage your money efficiently, you may be losing your capacity to make effective decisions.
You might be hesitant in making any other decision because the mind is always focused towards maximizing your financial gains. Studies also reveal that even a little amount of exposure to finance related thoughts can weaken moral resolve. For people, who are smart money managers, can't help but start thinking about money even when they listen to music.
2. Not able to multiply money properly
It is said that "A penny saved is a penny earned" However, to make this statement true, you need to invest that penny properly in order to multiply the cents you've saved. Similarly, when you are earning extra due to overtime or from any part-time job, most of you have the tendency to use it as rewards and spend it somewhere. Instead, you should create a separate fund in order to save these extra dollars, so that you don't have to worry about it and the money can grow.
3. Not buying good quality food
Often with the intention of saving money, you start compromising on certain items, like food. Remember that frugal living doesn't mean compromising with the necessities in life. It is advisable to not compromise on food quality.
If required, consult a professional to know what you need in order to maintain proper nutrition and try to find out ways to cut down cost.
For example, you can start couponing or look for deals, or even you can buy in bulk in order to save money.
4. Extreme couponing
Though couponing is a good habit to save money, yet smart money managers often begin extreme couponing. There are some disadvantages in doing so.
First of all, it takes a lot of time to sort and clip coupons and the habit may become addictive.
Think once - instead of spending so much of time in couponing, you can utilize the time in doing some other work or spending time with family. In order to manage money, extreme couponing can also entice you to eat unhealthy food since most of the coupons usually are for sugary and highly processed food items.
Rarely, you'll find coupons for organic and fresh fruits and vegetables.
5. Earning more not necessarily solves monetary problems
Most of you often think that earning more can solve all your financial problems and start thinking about how to earn more. However, this is not always true. If it's difficult for you to plan an effective budget and follow it, then the reason may be that you're having money management problems and not earning less.
Even if you start earning more, you might end up facing the same issue if you're not able to manage your finances properly.
6. Getting obsessed with being frugal
Practicing frugality can sometimes lead to becoming a chronic underspender. Such people begin to neglect basic necessities in life such as, avoid visiting the doctor so as to refrain from spending money.
It might also happen that they start taking advantage of others by leaving very little tip for a service or constantly arguing with service providers so as to get an item for free of cost. Some people also hesitate to invest in comparatively low-risk options such as, money markets or CDs.
If you continuously think of saving money, then you might lose interest in enjoying little things in life that give pleasure.
For example, you may be hesitant to gift even a small item to your girlfriend which will surely make her happy. Or, you're not going to a long awaited vacation which you want to and your financial condition also permits you to do so. So, even if you'll have money, you won't be able to enjoy a good lifestyle. It is true that too much of anything is not good for you; but, you can buy a not-so-expensive gift for your girlfriend or take a vacation where you won't have to spend much.
It is advisable you try to strike a balance.
Try to save a decent amount every month and invest properly for better return in future and at the same time, try to enjoy a good lifestyle instead of worrying about money all the time.
What do you think? Isn't it a good approach?