How to get rid of the ego in finances?

Managing finances both in the personal sphere and in the family or as a couple can be a real headache for many people.

Human beings are not born taught in this aspect, and we acquire important knowledge during our lives; This means that many may feel disoriented when faced with dilemmas as important as what to do with the money that is available. If we add to this that we also think in the long term and as a consequence we must make a series of forecasts, things get even more complicated.

But added to this, there is another aspect that we should not overlook: in finance you have to combine the emotional with the rational. It is clear that to be happy we must have material resources that allow us to live with our needs covered, and that limiting ourselves to saving for the sake of saving will only lead to constant frustration or even to an unhealthy lifestyle healthy. On the other hand, we cannot constantly give in to impulses and short-sightedness either.

That is why finding a balance between strategic positioning and pure hedonism is a challenge. In fact,

For many people, managing their finances is mostly an exercise in ego., of wanting to appear and of fitting in with certain stereotypes and prejudices, losing sight of whether those decisions are really the most reasonable taking into account the purchasing power that is available in the present. Constantly giving in to the mental trap of "if I believe in myself, fortune will come" can lead to situations of personal or family crisis due to not having known how to keep our feet on the ground.

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How to get rid of the ego when making financial decisions?

Like almost everything in life, learning to manage finances at home is something that is acquired with experience and through a series of mistakes that people make throughout our life.

One of these errors comes from the ego itself, that is, from the need to pretend constantly that one has a better economic situation than the one we really have or the tendency to live above one's own economic possibilities.

The personal ego sometimes leads us to make wrong or irresponsible decisions about spending our money or investing it improperly, and many Sometimes it can end up putting us in complicated economic and financial situations, which could have been avoided by acting differently from the start. principle.

Next I will show you a series of guidelines that can help us get rid of personal ego when managing our finances successfully.

1. Prioritize safe investments

Risky investing by trying all sorts of new methods has been very fashionable for a long time. several years and currently it is mainly young people who embark on this type of project without the knowledge necessary.

When making any type of investment we must ensure that we have the economic security cushion enough in case the project ends up being loss-making or our forecasts do not end up being as good as we expected.

In addition to that, it is important to be clear that you should not try to earn benefits through investments if we do not have enough money to cover our expenses during the months that we estimate it would take us to find a new job if we lose our current one.

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2. Avoid going into debt simply to spend

Avoiding getting into debt systematically is another of the rules that we can apply to ourselves in our daily lives. As well as always living a little below our economic means, to ensure that we can comfortably face any financial adversity in the future.

The need to pretend that we have more money than we really have or the tendency to live spending more than we can afford, getting into debt repeatedly, it will prevent us from saving monthly and it is a way of life that can ruin us in the long run.

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3. Always invest wisely

When investing, we must always be clear that without information our professional projects will surely fail and that if we do not know 100% the details of each investment method that we start is probably that the projects end up going wrong.

It goes without saying that if we do not have updated information at all times on each investment model that we are going to put into practice, nor we are in contact with other people in the sector, it is most likely that we will not be able to obtain the desired benefits through a project in particular.

4. Make forecasts taking into account the most pessimistic scenarios

In the world of finance, it is advisable to never make economic forecasts solely through optimistic estimates and always keep in mind the worst possible long-term economic scenario term.

Having very positive forecasts about our economic future can cause us to start spending excessively and it makes us overconfident about our spending possibilities, to such an extent that we can reach situations of financial out of control.

On the other hand, a conservative and pessimistic forecast will keep us with our feet on the ground and will help us to carefully measure each of the financial operations that we carry out.

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5. Be aware of financial failures

When embarking on new investment modalities little known, it is important habitually remember our past financial failures to learn from them and that they do not happen again.

Taking a humble stance in the face of the memory of previous failures will allow us to overcome the ego and manage personal finances in the best possible way.

6. ask for financial advice

Asking for financial advice from family, friends or experts in this field will help us to acquire valuable and necessary knowledge to make the best decisions in the future.

As in any field of life, the best way to learn is to consult those people who know more than we do, especially in such an important subject as finances.

7. Put savings first if we do not have an economic mattress

Another advice that we must take into account is to always opt for savings when we are contemplating the option of making a certain expense with extra money.

Saving is one of the fundamental pillars of successful finances; That is why we should always choose to save money if we find ourselves in a dilemma between spending it or not.

8. Always pay the debts

Whenever we have contracted debts with someone of any kind, their payment must always take precedence over any other financial operation. If we don't, it will be easy to generate a snowball effect in which problems will accumulate..

Are you interested in having financial education services?

I have created a personal finance course in which we will delve into the different guidelines exposed; My students are saving up to €300 a month in a sustainable way with an average salary. Contact me so I can give you more details.