Valentine’s Day is a perfect time to show your significant other that you love them. Flowers, chocolates, and jewelry are all excellent gifts for that purpose. However, there is one key thing that people often disrespect in a way they would never treat someone they love: their money. Living in Atlanta, home of the fake ballers and shot callers, I see many people who spend out of control on superficial goods. This is unfortunate because how you treat money is a direct reflection of what you value and in many cases, how well you love yourself.
People often treat money like a harlot, with a lack of attentive care that seems fun until the emptiness ensues. Folks schmooze with money recklessly for a while and then land in dismay when it leaves you high and dry. Below are five tips to help you manage your money better, building a lasting relationship with it as a means of self-care — the only proper foundation for authentic relationships.
Tip 1: Don’t spend more than you make
This is really the golden rule of personal finance. It sounds simple, but this is often the basis of a person’s financial problems. Racking up credit card debt is the easiest way to fall in the trap of spending more than you make. Usually, the spending is on goods that you do not even need and will probably discard after a few months.
A way to avoid this is to track what you are currently spending. Mint is a great tool that many people use to do this. Once you know how you are currently spending your money, you can then find things to trim to ensure that you do not live paycheck to paycheck. Lastly, it is important to have enough discipline to stick to your plan.
Many great thinkers believe that discipline and love go hand in hand. Love of self can fuel your discipline to make better financial choices.
Tip 2: Save at least 10 percent of your income
A report by Global Finance magazine shows that the United States has one of the lowest savings rates compared to other developed countries. This can have detrimental effects as one approaches retirement age. For our generation, social safety nets like Medicare may not be in existence. Therefore, it is important for individuals to take direct control of their future. Having savings in the bank also reduces stress levels when the inevitable rainy day comes.
Loving yourself by saving is an essential part of doing what is best for you. Only then will you have a well of wealth from with to nourish others, financially or otherwise.
Tip 3: Think of spending as a portfolio of investments
Most people only think of a portfolio as stocks, bonds, and real estate. In reality, everything that you buy is an investment, but the return may not be financial and the investment may not be wise. You invested in clothes so that you do not freeze, or in flowers to show your significant other that you love them. If investments were only about money, then people would never purposely have children, as they are a money pit for parents. Sometimes you spend money, just because you love the person or item you spend it on. You get emotional satisfaction that is greater than the value of the outgoing cash.
You want to make sure everything you spend money on becomes an asset, emotional or tangible. A financial asset is something valuable that you own (stocks, bonds, a pair of sneakers) and a portfolio is a collection of these valuable items. It is important that you look at all of your purchases individually and ask yourself if the value of the item that you are about purchase outweighs the cost.
If the value does outweigh the cost, then go ahead with the purchase. If not, then you may want to rethink buying the item. Remember that one only has a limited amount of money, so you would need to factor in other things you could do with the cash. You may think that that new coat is worth $300, but is it if you cannot pay your rent for the month? The emotional cost of worry certainly outweighs the coat’s immediate pleasure.
Part of loving yourself is learning not to stress yourself.
Tip 5: Proactively solve financial problems instead of letting them fester
When I was starting Great Black Speakers at age 22, I was not diligent in keeping track of my finances, especially as it related to my undergraduate student loans. I would get letters in the mail from the loaner and ignore them. Eventually, they reported me to the credit bureaus, which decreased my credit score. I was hiding from a problem that was easily solvable through certain types of deferral and alternative payment options until I got my company off of the ground. Proactively solving financial problems will definitely help you sleep better at night — which also directly impacts your health. Solving financial problems proactively could be seen as tending the garden of love for yourself a little bit every day.
If you are dedicated to person growth, loving yourself through this type of incremental financial management should also be one of your goals.
There have been a few articles recently on a potential mate’s credit score being of high consideration these days on the dating scene. Linking love and money in this way has been going on for eons; this latest take is just a new twist. But many don’t realize that having your finances in order is not just a way to be attractive to others; it’s a primary way of saying to yourself that you, and your future, really matter.
Here’s to hoping that this Valentine’s Day you remember that personal fiscal responsibility is not just a burden; it is also bridge towards self-appreciation.
Lawrence Watkins is the founder of Great Black Speakers, Great Pro Speakers, and co-founder of Ujamaa Deals, which is a daily deal site that promotes black-owned businesses. He graduated in 2006 from The University of Louisville with a B.S. in electrical engineering and earned his MBA from Cornell University in 2010. Lawrence currently resides in Atlanta. You can follow him on Twitter @lawrencewatkins.