There is no denying that money is an integral part of everyday life. You need it to pay bills, acquire possessions, get food, and save for the future. While it holds a certain importance in life, being prudent with money is also key. Knowing how to use money to get ahead may require a shift in your mindset. According to Cristina Guglielmetti, president of Future Perfect Planning,1 people who have out-of-control spending habits may be reluctant to acknowledge their financial situation. This makes it easy to pretend spending isn’t what it actually is. So, how do you shift your money mindset? Here are a few tips:
Be Honest With Yourself
You may not be happy where you are financially, but you cannot move ahead and take steps to fix things unless you are honest with yourself about your situation. Assess your finances – have you been wise in your spending? How is your credit? Do you have a budget? Are you on track to retire? Are you knee-deep in debt? Taking stock of where you stand when it comes to your finances is the first step. Once you do this, you will be able to start planning to fix those underlying issues, create a budget and plan to save.
Stop Wasting Time
The only real solution for fixing the problem is to do it, and do it now. Even if you have had financial difficulties, continuously avoiding the problem is not going to fix it. In fact, it most likely will just make things worse. You may be feeling as if you can’t get out of the rut, but the only way to make progress is to get started. Taking action is the key.
Keep It Simple
Don’t make things complicated. Use a simple method to assess your income and bills – write it all out. Then, take note of where you can cut spending and start small. One of the best ways to start getting your savings in order is to automate the process. You can’t spend it if you don’t see it. Make sure the money is going into savings and retirement accounts by automatic transfer and limit your accessibility to those funds. You will be surprised how quickly little amounts can add up.
Don’t Rush the Process
Everything takes time. Every little step you take points you in the right direction. Now is the time to think about your mindset. Did you watch your parents have money issues? Are you using money as a crutch for something deeper? Why do you overspend? Does thinking about your future and saving money make you feel sad? If any of these scenarios sound familiar, it’s time to deal with it. Once you realize why your relationship with money is the way it is, you can start to heal.
Live Within Your Means
This is something that many people struggle with. Even if you make a significant amount of money, that doesn’t mean it’s your job to spend it all. Try doing something simple like making your lunch instead of eating out. Add up all the money you were going to spend that week on eating out and deposit it into your savings account. Next, give yourself 48 hours before you make a purchase on a luxury item. Think needs, not wants. If you still want it in 48 hours, maybe you can deal with spending the money. If you have forgotten about it, chances are you wanted it on an impulse.
Focus on Yourself
Getting your mindset in the right place is a lot like training for a marathon. Do your research and find out what investments are of interest to you. Take the time to search for accounts that will give you the best return on your money. Give yourself a pat on the back every time you saved money instead of spending. Those little things make the difference.
Changing your mindset can be challenging, but it’s doable once you commit to it. Things may not go smoothly in the beginning, but always remember – just because you started slow doesn’t mean you have failed. Take solace in knowing you had the courage to start.
You don’t have to do it alone. There are plenty of resources out there that you can use to get started, from budget templates to online calculators to speaking with a professional financial planner.
Have a Question?
Shoot me an email at Luis@buildabetterfinancialfuture.com, and let’s get started on pursuing your financial goals together. To get monthly financial tips sign up for my newsletter if you have not already done so. Just go to my website at www.buildabetterfinancialfuture.com
Luis Rosa CFP® EA is the founder of Build a Better Financial Future, LLC. He has been in the financial services industry since he graduated college in 2001. Luis focuses on empowering people with planning tools and action steps to help position themselves for a better financial future.
Luis has been quoted in articles published in Yahoo! Finance, U.S. News & World Report, NBC News, Investopedia, Business Insider, The Daily News, and several other online publications. In addition to obtaining his securities registrations Series 6, 7, 63, and 66, Luis is also a CERTIFIED FINANCIAL PLANNER™ professional and is enrolled to practice before the IRS. This diverse financial knowledge allows him to best serve his clients by understanding how one financial decision affects the other, allowing him to better guide them toward pursuing their goals. To meet and see how Luis may be able to help, contact Luis directly at Luis@buildabetterfinancialfuture.com.
Investment Advisor Representative of Retirement Wealth Advisors Inc. (RWA), 89 Ionia NW, Suite 600, Grand Rapids, MI 49503 (800) 903-2562. Investment Advisory Services are offered through RWA. Build a Better Financial Future and RWA are not affiliated.
This information is designed to provide general information on the subjects covered, it is not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market, or recommend any tax plan or arrangement. Please note that Build a Better Financial Future, LLC and its affiliates do not give legal or tax advice. You are encouraged to consult your tax advisor or attorney.