This is the first of five articles that explain how we can get in control of our money. This important article deals with the psychology of money, your money mindset; it teaches you how to think about money.
Nothing you will ever learn about money is more important than learning how to get in control of your money. And getting in control of your money begins here.
It is exciting for me that I have this opportunity share what I have learned about getting in control of money because this information is rarely taught, even though getting in control of your money is critical for financial success.
First Comes a Proper Money Mindset, Then Productive Action
The very first step toward this goal is a mental one. How we think about money determines what we do about money. We are what we are today as a result of the choices we made yesterday. Our choices all grow out of our inner beliefs and thought processes. This is as true with money as it is with any other aspect of life.
How we think about money determines what we do about money.
I can tell you that this first step, while it may sound ho hum to some, is an extremely important one for anyone who wants to be successful with their money. If we want to get in control of our money, we need to start here.
Think about it. We hear it every day. One person says, “I didn’t buy it because I didn’t have any money.” Another says, “I had to charge it because I didn’t have any money.” A third says, “I didn't really have the money for it but I bought it anyway.”
The same situation. Different choices. But why? Different thought processes when it comes to money.
It Takes A Small Money Mindset Change
One of the most important financial truths for anyone to grasp is the fact that it is not how much money we earn or even how much we spend, but whether we are in control of our money that matters in the long run. There are plenty of doctors and lawyers in financial trouble. There are plenty of secretaries and nurses who are prosperous.
The most incredible truth is that overspending as little as ten dollars a month over twenty years at average credit card rates can produce the $8,000 to $10,000 of debt which is common to most families in America today. The average interest being paid on that debt is over $93.00 per month.
Perhaps that doesn’t sound like a big deal to some folks. But that $93.00 invested monthly in a whole stock market index fund for 40 years would on average produce over a half million dollars.
Let that idea sink in. The difference between retiring a millionaire and retiring with no money and a ten to twenty thousand dollar credit card debt is no more than a Burger King meal or a gourmet coffee a week!
The difference between retiring a millionaire and retiring with no money and a ten to twenty thousand dollar credit card debt is no more than a Burger King meal or a gourmet coffee a week!
This is the most important single mindset change you can make. If you imagine that it takes a large amount of change to become successful with money instead of a small one, you will find it difficult to change your future.
If you realize that over spending only a few dollars a month leads to catastrophic debt while living within your means and saving a little consistently over time can make you rich, you can commit to change more easily.
Understanding the Psychology of Money
Motivating ourselves to take the steps we need to make in order to get in control of our money becomes possible only when we see that it is indeed really possible for us to be financially successful. Most people never really try because they don’t believe they can; they have a negative money mindset.
In my experience many people will realize they can succeed financially and will choose to do so as soon as they understand how little change is required. The fact is, for most people if you can adjust your spending as little as $10-15.00 per month you can get out of debt.
Many people will realize they can succeed financially and will choose to do so as soon as they understand how little change is required.
Once you choose to get out of debt you will soon find a way to invest $200.00 or more each month in a Roth IRA or other long term savings plan. If you do that for forty years you will likely “retire” a millionaire.
Your Money Mindset: A Positive Potential
Of course none of it can happen until we know how to get in control. Even if you cut back spending in one area you can lose it elsewhere unless you know the secrets of control.
However, I know that many people never try because they continue to think of financial success as something that is just too hard. Please believe me that the task is not that large. If you just realize that and then make a mental commitment to learn how to get in control of your money you can do it as easily as all successful people have.
Again, money control starts with our attitude about money, our money mindset. After reading the next articles in this series you will see how you can easily gain the control you need to assure your financial success. That knowledge will give you the foundation for a positive money mindset when it comes to controlling your money and assuring your financial success.
There are numerous reasons most people have lost confidence in their ability to do well financially. Some of us, while confident in our abilities generally, grew up in an environment that caused us to feel as if having money was wrong. Honest and good people were not supposed to have money! That is equally wrong headed.
Unfortunately, there are a few countries in the world where people are severely confined by oppressive governments. But the chances are, anyone in a position to be reading this will have all the opportunities they need. The only question is whether or not our opportunities to take control of our money and achieve financial success will be seized, a matter of choice.
The only question is whether or not our opportunities to take control of our money and achieve financial success will be seized, a matter of choice.
The truth is that people can become prosperous in America today (and in most other places in the world), even on a modest income . But money success only comes once we learn how to think correctly about our potential for becoming successful with money.
How Will You Think About Money?
There is nothing to keep us from choosing to discover our abilities and committing ourselves to begin working toward our goals in this area today. Then, if we remain persistent and patient we can and will succeed.
So financial success begins when we discover how little change in our spending/saving habits is required for financial success and then grasp the importance of control as the foundation for success. The question we need to ask ourselves is,“In the light of what I now know, what will I choose to do?”
Learn how to think about money—begin by choosing a positive, confident, and determined money mindset—and then begin doing what needs to be done to get in control of your money.