Photo by Vishal Modak
It’s a strange paradox: money management is one of the most crucial life skills, yet our education system largely ignores it. This absence, coupled with pervasive beliefs like “the rich get richer” or “it takes money to make money,” leaves many people feeling lost or completely out of touch with financial reality.
When we start earning and gain independence, our financial aspirations often fall into one of three common categories:
The “No Price Tag” Dreamer
I want to earn so much money that I don’t have to look at the price tag before buying anything.
These individuals often spend before they earn, living paycheck to paycheck. Is there anything wrong with checking a price tag? Not at all! While a $50 chocolate might seem like a luxury today, something else will take its place once that becomes easily accessible. This mindset often leads to a never-ending chase for the next “high.”
The “Family Provider” Dreamer
I want to earn so much that XYZ in my family doesn’t need anything.
This aspiration often stems from a deep-seated baggage or trauma related to money. For these individuals, money isn’t a positive force, and their motivation is tied to someone else’s happiness or needs. Unloading this generational baggage is incredibly tough. It can be hard for them to view money as important but not essentialto their overall well-being. They might become overly frugal, even sacrificing small, simple pleasures that money could afford them.
The “Comfortable Life” Dreamer
I want to earn so much that I can live life comfortably.
This is the mindset of confident investors. They trust their ability to generate more income. Often, they started earning small and early, perhaps by tutoring kids in the neighborhood. They not only live comfortably now but are also actively preparing for a secure and comfortable future.
Shifting Your Money Mindset
We should all strive to embody the third category. It won’t happen overnight, but you must start today. Here’s a quick five-step program to help you get there:
- Define Your Financial Identity: How do you describe yourself financially? Do you say “I am poor,” “I am middle-class,” or “I am rich”?
- Get a Reality Check: Research the average yearly income for “poor” or “middle-class” individuals in your country. This will provide a grounded perspective.
- Master Your Budget: Ladies, we’re often experts at managing household budgets – let’s apply that skill to our personal finances! Get a firm grip on your income and expenses.
- Set Clear Financial Goals: What are your dreams costing today? Research the current prices of your aspirations, account for inflation, and set realistic dates for achieving them. Then, calculate how much you need to save today to reach those goals.
- Commit to Your Primary Income: While exploring new income streams, remember to prioritize and excel in your current job. It pays the bills, and you need to stay relevant. Continuously learn and reinvent yourself to avoid becoming obsolete.
Remember, while money is important and an integral part of life, it isn’t everything. Like all things, we need to find a balance. Our aim should be to become creators of financial well-being rather than just consumers.