Ordering a home delivery or buying quality ingredients with the idea of making the dish you're dreaming of? Renting a movie on a paid platform or spending time on that book that someone gave you months ago? Going shopping to update your wardrobe or inventing extreme changes with what you have stored away?
It turns out that every day we make some decision that affects our wallet, no matter how small it may be. It is true that some of them may be insignificant, but the sum of all of them impacts the future of our finances and this, in turn, has a significant impact on mental health.
According to a report by the American Psychological Society, ongoing anxiety about money can lead to high-risk behaviors such as alcohol and drug abuse, overeating, sedentary behavior, stress, and sleep disturbances.
This anxiety can be caused by a short-term view, where immediate well-being is put before medium- or long-term financial health. It is also likely that a lack of education, distrust in the credit sector and a lack of adequate emotional management can lead to bad decisions that end up harming financial well-being and, in the long run, mental health.
To make the impact positive, we bring you three tips that will help you make better financial decisions and prevent even the slightest sign of stress from appearing:
Make a savings plan
In addition to doing it, follow through! There are effective methods if you want to achieve total commitment to this initiative and one of them is Kakebo, a Japanese word for “household account book,” which dates back to 1904, according to Fumiko Chiba, author of “Kabeibo: The Japanese Art of Saving Money.” How to put it into practice? First, you must record your daily (or weekly) expenses in different categories. For example: income (salary), essential expenses (housing, transportation, and food), leisure (shopping), and extras (gifts or repairs). At the end of the month, subtract income minus expenses. The philosophy behind its use is to put emphasis on the things you need to live and learn to eliminate those that are not essential. Therefore, when the time comes to evaluate how you have spent your money, you can take stock with the help of the following questions:
- How much money did you manage to save?
- What would you change next month to make it better?
- How much money did you actually spend?
- How much would you have liked to save?
Chiba claims in his book that the margin of savings can reach up to 35% of your income. That doesn't sound bad! What are you waiting for to put it into practice?
Support your lifestyle with cash
Think carefully before making any decision that involves financing your lifestyle. If you want, charge purchases to a card to earn miles, but make sure you can pay the balance in cash.
Think long term
This point is vital to building a lasting financial position and putting some perspective on your current behavior.
For example, think about that $1 coffee you buy every day. One a day is equivalent to spending $365 a year. So, in five years, you will have spent more than $1.800.
Thinking twice and managing our emotions to avoid making impulsive purchases, always keeping our well-being in mind, may not be easy at times, but it is key to gaining peace of mind and maintaining good mental health in the long term. Now do you see why it is useful to think carefully before buying something?