It’s so easy to get caught up in wanting to earn more money, save more money, and pay down more debt. Before you know it chasing the almighty dollar can rule your life.
That’s when you need to remind yourself what money is really about.
Money shouldn’t be seen as a status symbol or sense of self-worth.
Here are five basic money principles you should always keep in mind.
Money is a Tool
Money is a tool. It can help you build a life that you absolutely love or it can make you downright miserable – the choice is yours.
When you build up a safety net, live below your means, and save for the important stuff then you won’t even have to worry about money. You know you can cover those unexpected expenses.
On the other hand if you’re buying things you don’t need, going into debt, and living paycheck to paycheck your financial situation can make you downright miserable.
Use your money as a tool to make your life amazing.
You Control Money, Money Does Not Control You
You are in control of your money – not the other way around. If you’re deep in debt because you bought a bunch of stuff that you don’t really need that’s all on you.
If you spend your money recklessly then you’re going to be miserable.
Make a plan for your money (a.k.a. budget) and stick to it! You’re in the driver’s seat.
You Shouldn’t Draw Your Self Worth from Your Financial Situation
It’s so easy to compare yourself to other people. People who make more money, have nicer things, or have a bigger bank account. Don’t do it!
When you compare yourself to someone else you’re only getting a little glimpse of their life. You don’t know what kind of sacrifices they’ve made to get to where they’re at. It’s likely that you wouldn’t want to make those sacrifices yourself anyways.
Don’t compare yourself to anyone else. Work on a plan that will make you truly happy without worrying about what everyone else is doing.
You Can Live on Less than You Think
You can probably live on less than you think. I didn’t believe this until my back was put against a wall and I had to fend for myself. What I was surprised to learn was that I could easily provide a happy life for me and my two daughters on $20,000 a year.
If you’re trying to improve your financial situation then take a close look at your expenses. You CAN live on less than you think.
Money Doesn’t Buy Happiness
Last but not least, money does not buy happiness. Chasing after more money for the sole sake of having more money is not going to make you any happier. Likewise, buying newer, bigger and better stuff isn’t going to make you any happier.
Happiness is something that comes from the connections you have with other people not the amount of money you’re brining home each month.
If you can remember these basic money principles you can avoid making major financial mistakes and build a life that you love!
What else would you add to the list?