Sometimes you tend to make strange financial decisions that you can’t even explain. What controls you and why it is so difficult to change? We can find answers to these questions in psychology.
The Main Problem is in Your Head
If you want to build your wealth, but still have not succeeded and you can’t understand the reason, you might have fallen victim to “mental accounting”. It means that you have a special model of counting money in your head and this model transfers into your financial behavior. And it prevents you from making right decisions. For example, you may prefer to use a credit card instead of cash, and this makes you spend more.
There was a special research according to which people always tend to spend more than they receive. You can be planning a budget for a month, but you can’t prevent yourself from making a purchase that you really don’t need. This is also very dependent on advertisement and our total world of consumerism. We are used to live and earn money for buying things that are the best and the newest, while we don’t even think if we really need them.
To change this you can use different amount of money for different types of purchases. You should make a calculation based on your monthly budget and estimate how much money you need for all necessities. After you divide your money, try to spend them only on purpose. When you use all the money for one particular area, you should stop making purchases of this type.
You don’t Make Financial Decisions
I think the situation when you can’t decide what to do and prefer to do nothing is familiar to everybody. This is also a habit of your mind. You understand that you have some problems in your financial life, but you choose not to pay attention to them. This can be caused by different factors: you are just afraid to make things even worse, you don’t know want to do due to the lack of financial literacy or you just missed the first problem and now have a disaster.
However the first thing you must understand that it is always better to start right now instead of waiting. Also there are a lot of financial services that provide different help. For example, if you have run out of your money, but need to make a regular payment, you can easily get unsecured personal loan opportunity.
This will not hurt your budget, but will help you to solve monetary emergency.
Also you should not be afraid of financial actions. If you don’t have much money to save, it doesn’t mean that you must not save at all. You should start from some small amount and keep saving for a definite period. As a result you will see a saved amount and will be interested in further saving.
You should understand that leading healthy financial life is not a result of expensive education and being a magister of economy. All serious results need persistent and regular actions. This means that you should set an aim and make small steps towards it. At first it can be difficult and even scaring; however you can overcome your hesitations and succeed.