Even if you’ve been saving for months, you may need to be further along in your financial journey. Even if you’re saving money consistently, you may have bad habits blocking your money from staying in your bank account. Thankfully, removing these money blocks is very doable, but first, you have to identify them. Here are 15 examples of money blocks and how to remove them so you can build wealth.
The biggest money blocks are bad financial habits. These habits may be invisible to you, but they’re small daily financial choices that seem trivial but add up over time. For example, ordering a large drink (when you can’t even finish it) or booking an Uber over taking the bus. Everyone has bad financial habits, so you have to find out what yours are and remove them.
If you’re consistently asking yourself, “where did it all go?” every month, you need to track your money. This will help you identify what you’re spending money on and determine whether these expenses are leading you toward your goals. A financial tracker will also help you identify any bad financial habits you might be forming. It may be tiring to consistently record what you’re spending, but it’s a good financial habit and will force you to examine your expenses.
By now, you must have some sort of financial goal. However, if it’s something as general as “save more money,” you may find it difficult to progress. Your money goals should be specific, such as reaching a certain amount in savings by a certain time. That way, it can be easier to set milestones, track progress, and gain momentum.
Money goals are some of the most important parts of your financial journey. Here’s an article of mine that talks a bit more about them.
You could be spending more money than needed on your purchases and services. Many brands offer discount codes ranging from 10% to even 50% off under certain circumstances. A quick Google search for a coupon code before hitting “Check Out” can save you quite a bit of money over time.
Impulse buys, and flash sales are most certainly not your friends. Planning out your purchases ahead of time is a great way to stay within your budget and prevent overspending. This tip is especially important during months like December when you know there will be seasonal sales.
For purchases over $100, I use the two-weeks method. If I want to buy something worth $100 or more, I have to wait two weeks. If I still want to buy it after two weeks, I’m allowed to buy it guilt-free!
Removing your money blocks may mean addressing your outdated money beliefs. You might have been given some financial advice that worked in the past but no longer applies.
For example, you might believe you should never use a credit card. However, as long as you pay your bill every month, you’ll build a good credit score and accumulate points. These will be useful for applying for loans or mortgages or, depending on the bank, earning rewards.
Your money blocks may not be with you but with the people around you–which makes removing them much harder. You might have a friend constantly asking for loans or a relative who needs an early investor. Dealing with these relationships can get messy, so you need to set financial boundaries. If you need a place to start, check out my article here.
You might have identified a few money blocks to work on. Don’t worry about it! We all make mistakes, but what’s important is that you know what to improve on. Take it as a learning experience, and keep your chin high, sis.
Letting yourself get too disheartened by your mistakes can lead to financial insecurity. You can read more about it in my article.
You might think you should be saving as much money as you can. However, you can make your money work for you if you invest your money instead. You can earn passive income by investing a portion of your money instead of saving all of it.
Here are a few extra tips to help make your investing life much easier.
You might’ve been told to start investing as soon as possible. That’s because compound interest greatly benefits people who invest young. If you’re starting a bit later, then don’t worry! It’s never too late to earn passive income, even in your 30s or 40s.
What’s the right time to invest more money than you save? It’s when you have at least six months’ worth of expenses saved. This will serve as your emergency fund, which you can only touch in an emergency.
American households spend about $5,600, so around $30,000 should be a good baseline. However, everyone’s expenses look different, so I can’t give you a precise number.
Most banks don’t have an interest rate that can keep up with today’s inflation rates. That means you’re losing money by keeping your money in a bank without growing it. While you should invest more than saving when you have a fully-built emergency fund, you should still save. Just don’t make it your focus.
Not all investments are the same. When you invest, you must balance your portfolio and invest in assets that suit your lifestyle and needs.
For example, stocks and crypto are volatile investments that require investors to keep tabs on them to make money. They can be lucrative, but they need you to research and pay attention. That means a busy career woman or working mom may not have the time to follow the trends closely and could lose money.
Meanwhile, index funds are typically low-yield but safe investments that don’t require much attention, if at all. They’re great “invest and forget” options for beginner investors and people who don’t have much free time. However, they’re not always the most profitable investment.
Your salary is likely your biggest source of income. This is why you need to keep finding ways to grow it, like through a promotion or raise. Job hunting and networking can be exhausting, but they’re necessary steps to earning a six-figure salary and a comfortable lifestyle.
When removing your money blocks, you might have more motivation initially, but it will dwindle over time. Staying motivated to keep your bad habits at bay is difficult, especially when it’s so easy to be complacent.
One of the best ways to stay motivated is to keep learning new tips and tricks–like joining the money squad! It only takes a few seconds, and as a member, you’ll receive potentially life-changing financial tips every week. Sign up today!
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Dollars Makes Cents by Shaquana, Financial Coach and Wealth Expert, resources helps professional millennial women of color with the tools and skills they need to eliminate their debt, amplify their savings, and build generational wealth — without having to compromise their lifestyle.
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