Limiting Money Psychology
Financial Independence Mar 16, 2020
We are all guilty of immortalizing lies about the state of our finances. When it comes to managing money, most of us aren’t as rational and logical as we think. Our minds can become the biggest obstacle when it comes to being successful, but it is possible to identify and eliminate psychological pitfalls. Whatever your financial status, there are money lies you should stop telling yourself because they can hold you back from financial success. These ways of thinking when it comes to your finances will always leave you at a disadvantage.
I don’t need a side hustle
Being solely dependent on a single income stream is risky. Most jobs now come with a high level of uncertainty. A side hustle will not only increase your earnings. For some, it will also have you living a happier and fulfilled life. Especially if it is in line with your passion. You end up building wealth faster, and changes in the job market won’t affect you. There’s a level of freedom that’s experienced with a side hustle.
Your white-collar job might cease to exist years from now. With the current economy and recession lurking in the corner, your current job might not be secure. Start something on the side, find a way to earn more!
I need more money before I can save or invest
If you don’t practice healthy financial habits with the little you have, chances are when you start earning more, you’re likely to find yourself back where you started or worse. Practicing with less will build your discipline for when you eventually have more.
Don’t deny yourself the benefits that come with saving or investing early because you think you don’t have enough. Instead, start with what little you can squeeze out, and watch it grow tremendously. It’s not about how much one earns, it’s about how you treat your earnings.
Instant gratification is key!
Not being able to control your cravings is a psychological trap most people aren’t aware of. Self-control when it comes to spending is vital for your financial health. Not everything you want has to be gotten immediately.
Sacrifice pleasures you don’t need for that financially secure future, and avoid letting your emotions dictate your spending habits. Delayed gratification will have you spending less and saving more.
I don’t need a budget
Most people fall into the trap of mental accounting. Some are clueless about their total expenses, and this always leaves them wondering where their money went. Budgeting is solely planning. You’re planning ahead of time how your money will be utilized.
The good thing about budgeting is, you get to face the leeches in your finances head-on. It can help you identify money pits you’re at liberty to correct. It is easy to overlook spending, especially if you feel you have more than enough. But with a budget, you can keep your spending in check and make sure your savings are on track.
I’m saving already, no need to invest
It is the fear of loss that makes some people see investing as a risky proposition. By saving only, you’re reducing the chances of your money growing in due time and missing out on the power of compound interest.
While saving is the safer choice, you’ll be able to attain financial goals earlier when you start investing. Your money works more effectively for you, and the long term benefits will have you wishing you had started earlier.
I’m too inexperienced to invest
You DO NOT have to be an expert to start investing. If you feel you don’t know enough, get started by reading up on the basics. That way, you’re investing in not only yourself but your future as well. Don’t let all the finance terminologies scare you into losing out.
Information on the dos and don’ts and all you need to start has been made available by experts in the field. Try to take advantage of it all. Investing is not only for the old or finance savvy. You can apply the basics learned, and still benefit immensely.
There’s plenty of time to save
Starting to save early has never been known to hurt anyone. it’s usually quite the opposite. In reality, time is one of the most valuable tools you have to grow your savings. An early start allows you to make mistakes and learn from them. It also builds discipline, which is essential for a secure financial future.
Healthy habits take practice. You learn to outgrow dipping into your savings and build the habit of saving religiously. Time is fleeting, don’t let the “I still have time” lie rob you of your financial independence. “Vision without action is a daydream” if you want to be financially secure, start now!