4 Money Mindset Shifts to Become Financially Savvy
Are you worried that you aren’t making the right financial decisions to reach your goals? Do you wish you could be honest with someone about your finances, so you could actually get on the right track?
Here’s a secret: it’s easier than you think. Other people have taken control of their finances, so why can’t you? There’s nothing wrong with you and you aren’t sentenced feeling like this forever!
You just need to take a moment to reflect on your money mindset. What if you’ve been believing the wrong things all along? What if your mind has been stuck believing a lie?
It’s time to get your money mindset right! To help you become financially savvy, here’s four mindset shifts you need to make today.
Mindset Shift #1
Managing money can be as simple, or as difficult as you want it to be.
Ok, I know you don’t believe me right now, but trust me! Managing money can be simple. It can also be difficult, if you want it to be.
Think about it. You’ve seen financial magazines and articles talking about high-level strategies, new innovations, and yadda-yadda. You might get overwhelmed with all of that information thinking, “what in the world are they talking about?”
I want you to tune them out for the moment. Let’s get back to the basics. What really is money?
Money is a medium of exchange.
Money from an elementary standpoint is concerned with ONE thing: cash flow.
Cash Flow: Cash In vs Cash Out
“Cash In” means you have money coming in through your income and return from investments.
“Cash Out” is any money you are spending in expenses or investing into assets.
Now, these are the only two things you need to be concerned about at the moment.
You don’t need to worry yourself with any complicated information about money, like crypto currency or non-fungible tokens (NFT). But, it’s good to be aware of how:
Money makes the world go round
Trading proofs in the economy
Money is printed
Inflation affects economies
Although, this doesn’t change your simple money strategy to become more financially savvy. Even though money is getting more complicated by the day, the basics remain the same.
When it comes to money, you have a choice: do you want to learn everything about money the hard way, or the easy way?
Would you prefer to take a dip in the lighter end and just understand the information you need in relation to your current situation? If so, then just focus on gathering the information you need right now. Take it one step at a time!
Mindset Shift #2
There’s more than one way to manage money. Everyone has different goals.
What works for some people, may not work for others. Everyone has different goals and different strategies of getting there. There are many examples that prove this is true.
When you decide on a goal and pick a strategy, you will get an end result (if you stick to the plan). For every action, there is an equal and opposite reaction.
For example, if someone decides to save money early on, then they will end up with a bigger savings account than someone who didn’t decide to save.
If someone decides to invest earlier than another, then they will own assets before someone who did not decide to invest.
Some people will say saving is good in case of emergencies, while others say you should’ve invested it. Either way, everyone will have an opinion on how you should be spending your money.
That’s why you just have to focus on what’s best for you at this time. Choose the money strategy that fits your goals. When you stick to it, you will achieve an outcome. It will have a consequence later on.
For example, what if you decided to take a gap year? You want to see the world, immerse yourself into new cultures and gain new experiences. You’ll pay for travel: food, hotels, entertainment, etc.
Some may think your spending is irresponsible and that you’ve lost a year. You should have gone to work right away, started making money, and invest it so it had more time to compound.
Others may be jealous that you’re getting to travel so much and experience all of this fun.
Either way, it’s your money and you can decide how to spend it. News flash: it’s your life!
If your goal is to travel the world, then it makes sense to spend your money travelling. If your goal is to save money and invest into assets, then it does not make sense to spend your money travelling.
Either way, your decision has an outcome. Whichever choice you make, there will always be a consequence. Whichever choice you make, people will always have their opinions.
Whatever decision you make, be proud of it. No one has control over your life, except for you.
Empower yourself to do what you want and move on. If you need to make adjustments later, then make them! Over time, your goals will change. You’ll always have the opportunity to change your mind back.
Allow yourself to take risks and explore what you want. Just ask yourself: what are my financial goals? What do I want my finances to look like in one year? Two, five or ten years? Are my actions aligning with my goals?
Mindset Shift #3
Expand your concept of investments. What else could you invest in?
Let me ask you, what do you think of when I say “investment?” Are you investing? Do you want to invest? Does investing intimidate you?
If so, you’re not alone. Most of my clients are at a loss when it comes to investing. Due to COVID-19 in 2020, most of my clients actually ended up with more money to work with because they had less things to spend it on. Without travel or entertainment, people had more funds they could invest.
If you have more money on hand at the moment, what would you want to invest in? Do you think you have to invest in stocks? Cryptocurrency? Mutual funds? Index funds?
Do you feel pressured to invest in what everyone else is investing in?
I challenge you to look at investing from a completely different perspective. Think about investing as an instrument you use to put money in, to gain a return on your investment.
“Investing” means you are adding time, energy, and/or effort into something in order to gain a return from this debt. If you think about it that way, you might think of more things you could invest your money into.
When you invest money into something, you’re looking for a return to gain. This gain is in excess of the money you have already put in. Investing isn’t just for stocks and bonds!
One time, I had a boss who told me he got a good return off an investment from a few years back. Curiously, I asked what financial instrument he invested in?
He told me he invested his money with his father-in-law back in his own country. He started a micro-lending operation where people paid him to loan them money.
You might think that his investment was for the actual loans, but his real investment was into his father-in-law. His investment with his father-in-law actually generates a return.
Do you see how you can open up your mind to the investment opportunities around you? I’m talking about legitimate, legal and morally-sound investments. Not scams that rip innocent people off.
From my experience, if it sounds too good to be true, it usually is a scam! Be careful of unrealistic returns. Good investments will yield returns in a realistic timeframe. Other good investments include:
Your own business
Your properties or REIT
Of course, you can still invest into financial instruments. I’m not discounting them, but I want you to expand your scope. There’s more to investing than financial instruments.
Mindset Shift #4
Be kind to yourself! Don’t beat yourself up over every small financial decision.
Most of us are naturally hard on ourselves. When we don’t meet our goals, we tend to beat ourselves up pretty badly. Ask yourself: would you speak to a friend as negatively as you speak to yourself?
I didn’t think so! You need to give yourself grace as you embrace these new money mindsets. As they say, “success is a journey, not a destination.”
If you have a savings goal and you fail to hit it, don’t beat yourself up about it. Just remember why you want to build up your savings. This will help to motivate you and change your actions to get the outcome you want.
A big money mistake people make is trying to change their money behaviours without understanding their intentions. You can’t change a money behavior without understanding the emotion and the intention behind it.
Be kind to yourself and prioritize your needs before anyone else’s. Most of us have loved ones we would like to take care of like spouses, kids, parents, partners, grandparents, extended family and friends. But you can’t take care of them financially until you can take care of yourself first.
You have to have enough financial stability for you to sustain your life before you can help people around you. Everyone needs to take care of themselves first!
If you make a mistake, forgive yourself quickly and learn from the mistake. Make an adjustment and move on. Don’t worry about tomorrow because today has enough worries of its own.
Remember, your money mindset is about more than dollars and cents. There’s a bigger why for your financial goals. There’s a bigger purpose waiting for you to achieve it.
If you become financially savvy, imagine:
The life you could live.
The experiences you could have.
The places you could see.
The people you could help.
The good you could do.
Is this the kind of life you’d like to live? Then you have to believe you can live it, before you can achieve it. After all, you only have one life to live.
🌟 If you’re ready to become financially free, please visit ExpenseConciergeSolution.com to book a 15-min consultation with me.
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