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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.

Simple, right?

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 appreciates

  • 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?