We live in a perpetually anxious world. It's particularly true where money is concerned. When it comes to obtaining financial peace of mind, most of us seem to believe it is out of reach. Even as we try to get a grip on our financial health, we find that even knowing good habits doesn't help us feel any better.
That's because knowing what to do and actually doing it are two totally different things.
If you want to achieve financial peace of mind and be financially free, you have to translate your knowledge into action. That said, these are five things that we believe put you on the right track to peace of mind in all things money and finance. While anxiety is everywhere, you don't have to feel wound up about your bank account.
Take these tips to heart and rule your money...not the other way around.
5 Ways to Achieve True Financial Peace of Mind
1) Learn how to talk about money.
When money is the elephant in the room, it will always be a source of anxiety. Collectively, we don't know how to talk about money. This is especially apparent in our intimate relationships. Money matters account for a huge percentage of domestic disputes and reigns as one of the leading causes of divorce.
We just don't know how to talk about it without getting heated, self-conscious, and awkward—whether it's with our loved ones or in the workplace.
So how to we learn to talk about it? Start small. Make a budget together. Talk to a professional, like a financial adviser or a CPA. Make it a habit, even for just a few minutes each week, to deal with money. The more you do it, the easier it will become. If you let thinking about and talking about money be uncomfortable, the more uncomfortable it will be.
2) Don't delay outstanding payments.
Bills have this habit of hanging over our heads. We can't receive it, set it on the counter, and forget about it. Bills haunt your bank account until they're paid, and even if you manage to “forget” them, you don't, really. You will get the feeling that you forgot something and, of course, it was a bill.
One of the best things you can do for your financial peace of mind is pay every bill on the spot. When it comes in, you pay it. This of course demands that you have the financial means to pay it, so you must be a good steward of your money in that you are able to pay each time bills show up. However, being able to pay bills immediately will give you a sense of satisfaction and accomplishment.
Not only that, but they won't hang over you with dread or fear that you'll forget.
3) Live within your means.
A big mistake we make is trying to live beyond our means. Access to credit and lending has ruined us in this regard. We want more than we can afford and so we get it anyway. This leads to cycles of deep debt, regret, and anxiety. Whether it’s a car too fancy, gadgets too posh, or a house too big, living beyond our means ultimately leads to financial stress and angst.
When you live with realistic expectations, you will find how much less stress comes with it. No debt, less stress.
4) Eliminate your debts.
Debt can be one of the most crushing financial circumstances to be in. It hinders your ability to save and invest and, like bills, it hangs over you like a dark cloud every month. While some debt can be good for building credit, so much debt is just painful.
If you want financial peace of mind, you have to work to eliminate debt. Part of that may mean short-term sacrifice for long-term gains. It may mean cutting small luxuries like eating out, having cable, or other small non-necessities for awhile. But rearranging your finances to eliminate bad debt as fast as possible may be just what you need.
5) Invest in your future.
Lastly, invest in the future. Financial peace of mind isn't just about getting by in the now, but securing the future. Every investment comes with inherent risk. There's no doubt that you will encounter some stress if you invest. But with due diligence and care, investing will reap great rewards for you and your family for years to come.
You can get started in one of the surest and time-tested investments right now: real estate. Talk to your adviser today to see what it takes to start building your passive portfolio now.