17 May, 2024

Decoding Your Money Mind: How to Outsmart Yourself for Financial Success

Ever wondered why, when you are happy you generally tend to spend more money? Whenever you get a salary increment or your business is generating more profit for yourself, you also tend to make purchases that previously seemed more expensive to buy. This is just one example of a financial behaviour in human beings. Behaviours like these tend to push us into making wrong financial decisions or decisions that we might regret financially in the long term. Let’s explore some common financial behaviours and how to overcome them for a brighter financial future.Why Do We Make Money Mistakes?We humans are

not perfectly logical creatures. From the ancient times, our minds have been focused on survival rather than accumulating wealth. This behaviour has given birth to some interesting quirks. Here are some typical behaviours that creates problems for usPresent Bias: We tend to prioritize immediate gratification over long-term benefits. The recently launched gadget today seems more appealing than saving for a future vacation for us.Loss Aversion: We hate losing more than we love winning. This can lead to holding onto losing investments for too long. We just keep hoping that someday the losses will bounce back.Confirmation Bias: Sometimes we tend to disbelief our own existing beliefs. This can make us ignore valuable financial advice that aligns our gut feeling.The Herding Mentality: We often follow the crowd, even when it's not the best choice. We tend to follow the crowd even knowing that could be a totally wrong move.Outsmarting Your Biases:The good news is that you're not doomed to repeat these financial mistakes. Here are some ideas you can implement to overcome these mistakes and ensure good financial health:Setting SMART goals (Specific, Measurable, Achievable, Relevant, and Time-bound) helps your brain focus and resist the temptation of instant pleasure.Automate your finances with automatic transfers to  savings  and investments. This takes willpower out of the equation and ensures that you save regularly.Seek outside advice. Consult a financial expert or a trusted friend who practices solid financial habits. Their objective perspective can help you avoid making emotional decisions.Educate yourself. The more you learn about financial tips and tricks, the money management skills, the more chances you have to make wise financial choices.Additional Money Mindsets:Here are some additional money mindsets that can contribute to financial success:Focus on the journey, not just the destination. Financial success is a long-term process. Celebrate tiny victories along the road. You must allow yourself to enjoy the process of growth and wealth accumulation.Prioritize long-term goals over momentary gratification for financial success.View money as a tool for achieving goals, not an end in itself. Use it carefully and intelligently to build a life you enjoy.Making Money Work for You:Here's how SBS (Saral Banking Sewa) can be your partner in financial success:Free Financial Resources: Utilize SBS's blog section for articles on budgeting, saving, and investing, written in clear and easy-to-understand language.Comparison Tools: Explore loan comparison features and different fixed deposit investment options offered by various banks in Nepal.Start Saving Today: Open a savings account with a good interest rate through SBS. Create a recurring savings process and start by allocating it every month, bit by bit.In conclusion, habits like budgeting, tracking expenses and setting financial goals are essential for building a strong financial foundation. The sooner you understand this and work toward your goals, the faster you will be able to achieve financial success.