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In some ways, feeling “rich” is less about how many zeros you have in your bank account and more about knowing how to use them to get what you want from life.
For author and certified financial planner Tom Corley, feeling rich comes from having an Irish pub-style structure in his backyard in New Jersey that allows him to invite friends over for drinks outside. For Liz Gendre, founder of the website Chief Mom Officer, that feeling comes from taking advantage of free, fun activities like visiting local state parks in her home state of Connecticut. And Andy Wren, a financial advisor in Raleigh, North Carolina, gets that feeling when she hops in her RV and goes for a road trip.
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“Prosperity comes from small, tangible financial goals that you’re working toward,” says Megan McCoy, MD, assistant professor of personal financial planning at Kansas State University. Those goals might be paying off student loan debt, buying a home, or doing something unique, like paying off Corley’s backyard structure.
We asked financial experts to share their tips for feeling rich given today’s current levels financial uncertainty and stress. Here are his top tips:
reflect on what you value
Gendreau knows that the car is not important to him but family time is. So instead of spending money on a new car, she invests her money in family activities. she stretches it budget On them too, by taking advantage of free museum passes, local libraries, and free state parks.
“It’s all about finding fun things to do that don’t really cost much money, but bring a lot of joy and happiness,” she says. Engaging in such adventures makes him feel rich, even if they are not expensive.
Corley, author of the book “Rich Habits,” calls that strategy “value-based spending.” He encourages people to think about what’s really important to them, such as traveling or spending time with friends and family, and to focus on directing money toward areas that might be worth as much, rather than material goods. Do not give pleasure
Choose Healthy Role Models
That pleasure-focused approach can also help with feelings of financial envy. “If you don’t have value-based spending, you can become a victim of comparing yourself to others and lifestyle creep,” which occurs when spending increases with income, warns Corley.
McCoy says that when we constantly compare ourselves to wealthy neighbors or influencers on Instagram, it’s easy to get dissatisfied. “We need healthy comparisons. Is there anyone else you can compare yourself to, like your past self, or your aunt who worked so hard and achieved the retirement of your dreams?”
Gendreau suggests hiding posts on social media from people who inspire feelings of jealousy or putting your own spin on them, “If I see something out of my budget at a fancy place that looks like a lot of fun, I can think, ‘Can I do something like this at a lower price point? Should I go to a fancy beach place? Need to go or can I go to a closer place?’ I don’t need to go to the Caribbean to have fun on the beach.”
Create flexibility with savings
“You’re going to make mistakes,” says Heather Carlock, a financial advisor and coach in Prince George’s County, Maryland. To move on from them, he says, it’s important to forgive yourself and build a financial cushion. When he was just starting out in the working world, he called himself the “1-2-3-4-5” challenge: He saved $123.45 from each paycheck.
“Watching your money accumulate is a major way to double down on flexibility,” he says. Then, if you suddenly encounter unexpected expenses, you have a financial cushion to protect yourself, creating a sense of “prosperity” or comfort.
“People are much more comfortable if they have emergency savings, so they know they can pay whatever bills they need each month,” Wren says. She says even a month or two of expenses can provide an elusive sense of financial well-being.
Create a budget and pay off debt
“If you don’t track where your money is going, you’ll feel financially insecure because you’re worried all the time, ‘Where’s my money going?'” Gendreau says. she suggests using a budget To track your spending, especially looking at current inflation levels.
Debt can keep people from pursuing their dreams, Carlock says, because instead of putting money aside to start a new business or take a vacation, you need to put it toward loan payments. “If it’s not a dream killer, it’s a dream delay,” he says. Using an online calculator can help to plan how to pay off your debt.
celebrate your progress
When McCoy finally paid off six figures of student loan debt, he celebrated the first withdrawal-free paycheck. But she says she would have loved it even more if she celebrated her progress along the way.
“I had just one moment of happiness that quickly subsided. If I could get over it, I would have paid every $10,000 – then I could celebrate 10 more times.
This article was written by NerdWallet and originally published by The Associated Press.