Durell Smylie may know ‘where the money resides,’ but do you know where yours is going? Are you letting your constant DoorDash spending and Amazon purchases slip under your nose?
Sometimes I find myself cringing at the thought of checking my bank account. Why? Because I know I probably won’t like what I see.
Again, why? Because I know that I’m not being as financially responsible as I want to be.
Ignorance Isn’t Blissful
When I lie in bed and think about just how much money I am spending, I can’t help but feel nervous and slightly ashamed. Not being aware takes the pressure off our shoulders for the moment, but ultimately, being ignorant of our current financial status could be the downfall.
Know Where the Money Resides
It’s important to know what we’re spending our hard-earned money on. Knowing how much these expenses are helping or hurting us in our daily lives is especially important.
Not being aware of where our money resides is a scarcity mindset symptom. With a scarcity mindset we find ourselves impulsively spending while negatively perceiving our financial goals. Spending for today without little thought of tomorrow isn’t the best habit.
To improve our finances, we must know where our money is going and learn how to manage it.
One helpful way to regain control of our financial future is to talk to a Money Coach.
Becoming Financially Conscious
On my journey to becoming more financially independent, one of the most significant steps was meeting with a Money Coach. I was nervous. Having someone look over your money and where it was going was nerve-wracking. Especially when you know there are areas you could improve.
The cool thing about Money Coaches is that they’re people like you and me. They are entirely aware of the economic strain going on in the country. They are aware of the ongoing pandemic, climate change, and pay gap. And they understand.
I was honest and open. My Money Coach, Erin, was eager to listen, offering suggestions and input. We laughed about my countless DoorDash purchases. She discussed the importance of a 401k and working toward financial goals. I learned ways to improve my credit. Not only did my Money Coach give awesome advice, but she encouraged me. Coming out of the meeting, I felt more confident about my money than I had in months.
I had a game plan. I was aware of what I was spending. And most importantly, I was motivated to take control of my money!
Your Money Coach can personalize your experience based on your finances and provide you with the best advice for your financial situation.
What I Learned From Money Coaching
My goals were one of the first things my Money Coach asked me about. Obviously, top of mind was to be rich! Or make a million dollars! Though those goals are valid, looking at what you need now is a great way to see where you can start.
Also, discovering your priorities is a great way to set goals.
For myself, I looked at areas where I was spending large amounts of money each month.
Through using the Nav.it money tab, I saw that my work expenses totaled over $200! I was spending vast amounts of money on public transportation and job purchases! Ultimately, I decided that a primary goal would be to get a car to reduce my travel expenses. The $20 I would spend to get to work could instead be used on two weeks worth of gas (depending on where I am). Also, I could put the extra $7-10 that I spend at work toward miscellaneous things, like Netflix.
Based on my finances, we set up a plan. It would be reasonable to save at least $50 towards that goal. As I earn more money, I can increase that $50 to $75. Setting up a personal financial goal can help motivate you to want to save!
Identify Spending Habits
Diving into my spending habits, I had developed a habit of eating out four times a week! Yikes. Not only was I ruining my diet (so much for new year’s resolutions), but I was ruining my bank account!
Money that I’d spent on food delivery could have gone toward groceries. That random waist trainer I just had to have (which now lies in the corner of my bedroom) could have been extra funds deposited into my savings account. The makeup could have waited. I mean, getting makeup out of a mask is a hassle anyway!
I pinpointed some typical spending habits with Erin and set a goal to reduce my top three.
When trying to identify whether your spending habit is a necessity, ask yourself these questions:
- Do I need this now?
- Would my life be harder without this?
- Can I cut back on this expense?
For me, managing my credit score is like climbing a slippery slope. Some days I’m confident. Others, I’m nervous that I may see a sudden drop. Coming from having a 480 credit score to teetering towards a 700 score always has me on edge.
I’d gotten the secured credit card and paid off my expenses on time every month. I monitored my credit report like an eagle and kept my credit card utilization low. As a result, I saw significant improvements over a few months. Despite my success in this area, I still felt anxious.
Erin cleared those anxieties by reassuring me that I was doing the right things. Sometimes, we need someone to confirm that what we are doing is enough and identify areas that we can improve in. I know I did.
After meeting with Erin, I realized there were many areas where I could save money.
One way that I could practice saving money was through budgeting. With budgeting, we are forced to remember our financial goals and plan with them in mind. Not only that, but budgeting can shed light on some of our habits that aren’t so good. A great start to budgeting is utilizing the tools in the Nav.it app!
I quickly found that there were areas that I could save. The Amazon purchases I made for fun could have been money I committed to my goal of a car. I could also use that money for transportation to and from work. Suddenly, everything made more sense. Taking care of my priorities first, my savings second, and my wants last would make things much more manageable.
By changing our mindset, we also have to change what we do with our money. Instead of being impulsive with my spending, I can start being responsible for what I purchase!
I found that I had more money by identifying and improving my spending habits. That meant more money to contribute to my financial goals and future aspirations!
Before meeting with a Money Coach, I wasn’t very confident with money. Now, I feel I can control my financial future completely! After the meeting, there was a switch in my mindset. When I previously thought about money, I thought about how little I had, how I wasn’t getting as much as I wanted, and how much I would spend. Now, with a positive mindset, I look at money in a completely different way!
Our insecurity with money too often seeps into our spending habits. This is why spending while financially unaware can be harmful. However, money coaching helped me identify this habit and gain insight into how to change it.
Ready to find out where ‘your money resides?’ Money Coaching is a great first step!
Not only does financial coaching help your finances, but it can also give you a better view of money overall. Someone holding you accountable for your goals can make you more responsible. Plus, the things you learn and the relationship you build with your money coach can make the experience all the better! You’ll feel more confident and responsible by having someone in your corner who can train you to navigate your finances better.
Chatting with a coach is easy – just look on the home screen of the Nav.it app to get started!
Knowing where your money is going and developing healthy habits can improve your overall money mindset. We want to go into our bank accounts feeling confident and optimistic about our goals. With these tips, we’re well on our way to changing how we view money!
Why It’s Time to Check Your Credit Score
Nav.it’s Downloadable Guide to Budgeting
Jasmine Powell is currently a graduate student at the University of Memphis and an intern at Nav.it. Her goal is to make writing her living and create material that will help people of color in their daily lives.’