So, you want to be wealthy or financially free or financially independent (or whatever the term you use). So, what are you doing to get there?
What is your plan? What steps are you taking each day to progress yourself towards becoming wealthy? Or are you simply hoping the universe (the government, or family) will provide for you and you will be fine.
Here are the cold hard facts. If you don’t take responsibility for yourself and put the steps in place to become wealthy or financially free, then you simply won’t get there – okay, maybe a major lottery win would do it.
You can put a budget in place and that will help, just bear in mind a budget is a tool. It is very helpful as a short term solution, for example, if you’ve got yourself in a debt hole and you need to get extract yourself ASAP, or if you are over-spending and need to take the ‘slash and burn’ approach to get back on track. A budget is not a long term solution to becoming wealthy.
Why? Because there are too many negative connotations around the word budget. We’re human after all, therefore emotive, and our brain tells us that going without or being frugal means eliminating the good things in life. That mentality for most of us, just isn’t a sustainable way of living long term.
We end up feeling miserable and deprived which makes us crave what ever we are denying ourselves, even more. So, don’t be surprised when you fall off the budget wagon and splurge more than you did before!
Just a side piece here: budgets are it all very rational and keep the economists happy, but the economists forgot one very important point… We aren’t rational! In fact, we are predictably unpredictable
So, if you can’t budget your way to wealth how do you get there?
It is a two-pronged approach. The largest component of becoming wealthy is in your mindset.
It is the choices you make to delay gratification today for something better in the future. It is not keeping up with the Joneses and making your own decisions about what is enough for you now.
It is about understanding your own money psychology and what pushes your emotional triggers to spend (or not to spend), and your investment strategy. It is understanding how your partner’s money psychology fits with yours and how to work together as a team to build a shared vision for your future that includes what being wealthy looks like for you.
It is about understanding and aligning your Values. Then, spend time and money in ways that are aligned with those values. For example, one family might find they spend a lot of money on the kid’s sport, for another it might be the annual family holiday. The important thing here is, they have made choices based on their Values.
The second component is having a Money Plan (as distinct from a budget). A Money Plan that is based on the principle of making choices that work for you and meet your Needs and having the appropriate financial and non-financial strategies to achieve your goal.
To have the lifestyle you desire now, as well as creating wealth for the future takes a complete change in mindset and strategies.
I’m sure you’ve heard the saying, “Insanity is doing the same thing over and over again expecting different results.” But it’s not insanity that keeps us stuck – it’s our habits, our behaviour.
We have a free webinar running at the moment that shows you how changing those habits can change your financial future, click here to get started.
If you are not where you thought you would be financially or you’re not comfortable with how money makes you feel, talk to us, we would love to have a chat.