Finance expert Davinia Tomlinson shares easy steps to help you manage your money
Anyone else counting the days until payday? The first payday after the holidays usually feels a long way off (especially if you got paid early in December), but some of us may be noticing it more than ever this year. As we head into the New Year, many of us like to take the chance to reset and embrace a fresh start, but worries about money and the cost of living can hold us back.
If you’re keen to get a handle on your finances in 2023, a great first step is to learn more about managing money so you can approach it in a simple and strategic way. To help us get started, finance expert Davinia Tomlinson, founder of Rainchq and author of Cash is Queen: A Girl’s Guide to Securing, Spending and Stashing Cash, shares five tips to help you take control of your financial future and live your best, most financially abundant life.
Whether you're just starting out or looking to improve your financial habits, understanding the basics of positive money management can help you feel reassured and put you back in the driving seat.
Learn to control your money mindset
Remember: you control your money, your money doesn’t control you. This is the key to transforming your relationship with money and establishing solid financial foundations that form the basis for how you live your life. Cultivating a healthy money mindset means that, in time, you will be making powerful financial decisions on autopilot. Start by keeping a daily money planner for a month and write down what you spend, when, why and with whom.
Next, reflect on how money makes you feel. Which words or thoughts come up consistently when you think about money and most importantly why? Do you feel excited? In control? Anxious? Whatever it is, write it down.
Lastly, look for patterns or clues in your behaviour. What do you notice about your money behaviour that makes you proud? Do certain people impact you positively or negatively? Is there a spike in spending after bad news?
The only way to make a positive lasting change is to know your starting point, identify where you’d like to get to and take micro steps that you build on incrementally to achieve your target.
Understand the difference between what you make and what you keep
Being financially free is about understanding the difference between what you earn and what you keep. Keep track of your expenses and make sure you're spending less than you're earning. This will help you make informed decisions about what to do with any disposable income, including how much you can afford to save and invest for the future. Most people who achieve financial success aren’t simply those who ‘earn lots of money’. The most financially savvy are focused as much on what they earn as what they keep.
Deferred gratification
It's easy to get caught up in the here and now and spend money on things we want but don't need. While there’s nothing wrong with the occasional burst of spontaneity when it comes to our spending, if this becomes