Blogs / Financial Planning

Reclaim your money mojo

There is a myth that the ostrich, when faced with danger, buries its head in the sand. Although it is not found to be true in nature, many of us tend to behave like this when faced with our money stress. At SFP, our financial advice is tailored to help you take your head out of the sand and reclaim your money mojo.

Financial behaviourists call the avoidance of perceived risky financial situations by pretending they do not exist, the Ostrich Effect. This tendency to pretend that all is well instead of proactively managing our finances is one of the reasons why so many people are in deeper debt than they should be.

Turning a blind eye to our finances is the first place we lose control over our money. If we want to change that, we need to open our eyes and start observing what’s going on to make healthy changes.

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Here are some ideas from our team at SFP:

Before you can even consider managing your expenses, you need to know exactly how much money is coming in. Knowing how much you have is foundational to deciding how much you can spend and how much you can save. In addition to balancing the books, understanding how money comes in will enable you to expand your income – especially if you work for yourself or have several income streams.

Monitor your expenses closely and use this knowledge to create a basic spending plan. As soon as your expenses outweigh your income, you can begin to foresee a problem in the future. If you have savings or a positive balance in your account, you may not notice that your income and expenses are out of kilter until it’s too late. Keeping an eye on where your money is going will help you navigate away from unnecessary expenses and work your way through leaner months without going into the red.

No matter how much is coming in or going out, it’s always important to keep some money in a savings account. Keeping money aside for special purchases or events is a fantastic way to feel good about your finances and to remain positive about your finances. This could be a short-term savings plan or a long-term one or ideally, a combination of both. Either way, as you see your savings grow you will feel better equipped to manage your money better!