We probably all encounter phases during our lives in which we struggle with our personal finances – and stressing about money impacts our mood and mental health. 

The idea behind healthy money management is simple: Save money for your future and spend less than you earn. In reality, however, we often find ourselves in situations thinking “Well, it won’t hurt if I spend a little more this time and save again next time, right!?” All those temptations and financial choices on a daily basis make it harder to achieve financial long-term goals. We overspend on things we might not even need, even take on debts. 

Reflecting on your spending, are you more of a spender or a saver? Going to extremes in both directions will lead to either being broke or missing out on life experiences and the joy they can bring. 

So how to find balance and manage your money to achieve your financial goals? To answer this question we need to ask the following question first:

What are your financial goals? 

Picture your ideal life in 5 years, in 10 years, and in 20 years. Different stages in life bring different goals. 

Now, come up with 3 financial goals – these are supposed to help you create the life you imagine and they are different for each of us: some of us want to buy a house, others see ourselves traveling the world, have children and/or studying an expensive course. 

Make your goals visible by creating a poster board or a mind map. Once you see your goals in front of you, which is the timeframe to achieve them? How realistic is it to achieve them until the “deadline”? Once there is a realistic timeframe, make a detailed plan of action: what exactly needs to be done when and how to achieve your goal(s)?

It helps to talk about your financial goals to others – by sharing them you hold yourself accountable and stay motivated to achieve them while others are watching and ideally supporting.  

How to manage your money

Now that your personal financial goals are clear, it will be easier to manage your money accordingly: 

Get an overview

What is your current financial situation like? How much debt is there to pay off? Which is your bank account balance, monthly income, and outgoings? Awareness is always the first step to facilitating change. 

Set a budget

Based on the incoming and outgoing funds per month, set yourself a spending limit. Sticking to it can be challenging at first, keep it up and you are less likely to overspend. Being mindful while spending money is key: Ask yourself before every purchase whether it brings you closer to your financial goals. 

Save money

Saving is key to achieving financial goals. Make sure to name your saving accounts according to your goals: “Family holiday outside of Europe in 2025” sounds more exciting and worth investing in than “Savings account”, “Financial Freedom Fund” sounds more motivating than “Retirement Savings”, right? Make saving a habit just like eating breakfast and you will accumulate a certain amount in no time. 

Set up automated transfers

Having a fixed amount leaving your bank account each month is a pre-commitment that is likely to stop you from giving in to the temptation of buying something you might not really need. 

Pay cash

Sounds a little outdated, however, seeing the money you spend instead of using a bank or credit card, makes it easier to only spend what you have available. 

Celebrate little successes

Have you managed to stick to your budget and save money over the past 3 months? Great, acknowledge that you are on the right track and that you will be able to continue doing so to achieve your long-term financial goals. 

Obviously, there will be unexpected expenses at times that might throw your plan off track. Once your goals are achieved, it is time to set new ones and work toward the future you want. 

A counselor/therapist can help you understand spending habits, develop a financial plan going forward and stick to it. You can reach out to book an appointment here.

Franziska Richter is a transcultural counsellor with the Willingness Team, offering counselling sessions to individuals and couples. She is particularly interested in sexuality, relationship issues, trauma and general mental health.