Sometimes, the way we think about money can have a big impact on how successful we are financially.
It seems strange that your mindset could matter so much, but how you think about money, and what you think is possible, can affect your financial success over time.
Take a few minutes to examine your money attitudes, and determine whether or not they are healthy. Think about some of the attitudes you have that might be bringing your finances down the road to financial failure, including:
1. I’ll Start Saving When I Make More Money
My husband and I fell victim to this attitude early on in our marriage. We thought we had to be making a certain amount of money before we could start saving.
Eventually, though, we realized that we needed to start small. Building the habit, especially with our low income, was more important than anything else.
It’s important to get in the habit of saving.
While you might not be able to save as much as you want right at this minute, you can still try to save a little money at a time. Put all of your change in a jar and take it to the bank every month. Even better is if you get in the habit of having 10% or 15% of your paycheck automatically deducted and put into a savings vehicle of some kind, whether it’s a high yield account or a retirement plan.
Don’t keep saying that you’ll start saving when you make more money.
With that attitude, you’ll never make “enough” to save. And soon you’ll find that you aren’t prepared for the future. Start now, even if you have to start small. Then, increase the amount you save as your earning power increases.
2. Consumer Debt is OK Because It’s Normal
The fact that consumer debt is so normal has led many to decide that it’s OK to rack up the debt. The idea of saving up for something seems ridiculously quaint when you can have what you want right now.
Unfortunately, feeling OK about consumer debt can eventually lead to problems down the road.
One of the biggest issues is that it’s easy to believe that you don’t need to pay off your credit cards with any sort of haste. After all, you can handle the minimum payments.
The problem with this money attitude is that it puts you in a position where you are turning your resources over to someone else. You continue to pay interest, instead of using that money to build your own wealth.
While high interest consumer debt might be OK for society at large, don’t become complacent about debt.
Make a plan to pay down your debt as quickly as possible. You’ll keep more of your own money, and put it to better use. It’s always better to be earning interest instead of paying it.
3. I Have Plenty of Time to Get My Finances in Order
None of us really thinks that we’ll run out of time. Retirement seems so far off.
When something is 20, 30, or 40 years in the future, it’s easy to think that there is plenty of time. When you’re young, you think you’ll have plenty of financial life left over once you finally discharge your debts.
All of this is misleading.
You really don’t have as much time as you think, especially since this money attitude can lead to procrastination. If you are always thinking that it will be better in the future, and that you will get your act together at some point later on, you’ll never actually get started on anything that can help your finances.
4. Stuff = Money
One of the most dangerous financial attitudes is that having stuff is just as good as the money you spent on it.
Having stuff, however, doesn’t make you rich.
Sometimes it just means that you are cash poor and you have a house full of things that aren’t bringing you any sort of financial stability. Stuff is not the same as money. In most cases, stuff depreciates in value at a faster rate than inflation erodes the value of your dollar.
Instead of “investing” your money in things, you can actually invest your money, and beat the rate of inflation.
While it’s sometimes pleasant to have nice things, don’t make the mistake of thinking that it’s the same as having actual financial resources available to you.