The way you view and handle money plays a huge role in how much financial success you achieve in life. Because of this, it's important to have a realistic and healthy view of money, or else you could find yourself always climbing uphill to reach your goals.
Here are five toxic attitudes about money that will prevent you from reaching your greatest financial potential.
Everyone else has it. I deserve it, too.
It’s important to realize that there’s a massive difference between deserving something and being able to afford it. Focusing on how other people spend their money doesn’t add value or joy to your life. It’s a terrible state of mind that unfairly dismisses the great life you’ve worked hard to build.
Fight the urge to keep up with your rich friends and instead direct that energy toward your own financial progress. Don’t get jealous of your friend's purchases. Instead, start asking yourself how you can make the same purchase without resorting to a credit card swipe. You’d be surprised at how quickly you can find the money to make big purchases simply by stashing away a small percentage of your paycheck each pay period. Which brings us to our next toxic attitude...
When I don’t have enough money in my checking account to cover a purchase, I swipe a credit card.
Real talk: The instant gratification offered to consumers by today’s businesses is awesome. You can see something on Amazon one day and have it in your hands a day and a half later. You can buy practically anything you want and pay for it without thinking. Also real talk: It can easily become a trap. If you’re routinely making impulse purchases with money you don’t have, you may be on the fast track to financial ruin. That may sound dramatic, but that’s just how slippery this slope can be.
Remember the old saying “good things come to those who wait?” Well, write that on a sticky note and put it in your wallet in front of your credit card, because delaying gratification is the key to financial success. Telling yourself “no” may not feel great in the short-term, especially after a stressful day. But in the long-term, it will feel amazing reaching your financial goals without the d-word (Hint: It’s debt) looming over you.
Budgets are so restrictive!
So many people are afraid of budgeting because, in their minds, stashing money means less financial freedom. They couldn’t be more wrong. Budgets actually give you more control. Having a budget means spending on items you want without jeopardizing your other goals. By carrying as little debt as possible, you’re in a position to be flexible when life hands you lemons.
If you’re the type of person who groans every time you transfer money to savings, try putting your it on autopilot. By setting up automatic transfers from your checking account to a secondary savings account, you can skip the boring part (stashing your money away) while reaping the benefits of having a plentiful cash reserve.
My financial situation is sure to improve soon, so it’s OK to borrow or charge more than I can afford to repay.
Have a good feeling about that Christmas bonus? Is management considering you for a director role? Congratulations, you deserve it! However, these assumptions should not be factored into your buying decisions. If you base your spending around a future salary increase, you won’t even be able to enjoy the pay raise when it comes because all that extra income will go toward your past debt.
If you are having trouble affording your lifestyle with your current salary, consider ways to reduce your expenses. Start with small changes like cancelling subscriptions, packing lunches for work, or waiting for items to go on sale before you buy them. Chances are there are a few areas where you can cut back that would hardly be considered a sacrifice. Saving a couple hundred dollars every month can be a game changer.
I’ve already spent more than I budgeted for this month, so it’s no big deal if I spend another few hundred bucks.
Saving money is a lot like dieting. Except instead of counting calories, you’re watching how much you spend every month. At some point you’re likely to miss the goal you set for yourself, and that’s alright. You can correct and overcome your mistakes. If eating a cupcake for lunch doesn’t give you the OK to devour an entire deep-dish pizza for dinner, then exceeding your budget doesn’t mean you can say “screw it” and blow through the rest of your hard-earned money.
Sorting your budget into weekly allowances and sticking to those amounts can help keep you on top of your spending. If you want to take it a step further, convert your weekly budget to cash. Many people find that spending cash feels more "real" than swiping a card. You’ll be able to see with your own eyes that you’re getting low on funds and hopefully slow down spending until your next paycheck.
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