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Admittedly, this is not my first attempt at improving my finances. I’ve tried many times before and I’ve also miserably failed many times.
I would blame my young age for all those failures because, I thought, when you are young you are kind of prone to mismanaging your money. I remember 10 years ago, my weekly goal was just to buy me clothes and it wouldn’t matter to me if I went home with an empty wallet.
But now, I realized I failed not just because was young and crazy. Because, obviously, there are lots of people in their 20’s who have healthy finances. I just didn’t have a strong money mindset then and I didn’t quite realize that how you perceive money will have a lot of impact to your financial standing.
It is why a lot of financial experts say that personal finance is more on perspective than numbers, so if you have a healthy mental conditioning on your finances, you are in a better position to move forward financially. But if you constantly find yourself in financial struggles despite your best efforts, your perspectives may be holding you back. This was very true for me.
So, today, let me share with you five of my most embarrassing mindsets that kept me poor.
1. I only live once.
This was my very convenient excuse each time I had money. So every time I got my small paycheck, I would be crazily sweeping through the clothing stores to buy what my money could afford.
There’s nothing wrong if you want to do the things you want to do today, but don’t do it at the expense of your future. You can still enjoy life by striking a balance somewhere between a meaningful present and secured future.
2.I need money to keep up with the Joneses.
I wasn’t that extreme, though, but I admit, I had this kind of mindset. If my friends had this stuff, I felt like I need it, too!
Keeping up with the Joneses is a good way to deplete your savings and get into debt. In fact, it is a sign of insecurity which isn’t just financial in nature. Instead of focusing what others think about you, focus on your own needs and what’s valuable to you.
3). I can never get out of debt.
I no longer have debts (not a single cent) but I used to have some and for a long time, I thought I could never get out of them. I didn’t try harder so I got stuck at them and ended up paying more interest.
If you say you can’t get out of debt even without trying, then you’ve already lost half of the battle. Sometimes debt can feel insurmountable that you’d rather incur more, ignore them and never make the effort of digging your way out. Instead of looking at it as a mountain, focus on the smaller hills first. Getting through your smaller debts will give you the mental fuel to tackle the bigger ones.
4. I don’t need to save for retirement now.
I had this mentality 10 years ago when I was 22 and it is now one of my regrets. Come to think of it, if you save $1000 a year, you will have $10,000 in 10 years plus the compounding interest.
You might think that retirement is not in your immediate need, especially when you’re still young and has just started your career. But the truth is, there is no better time to plan for retirement than when you’re still young because you have the power of compounding interest on your side.
Take advantage of your employer’s retirement package, automate your retirement savings and contribute to it regularly to enjoy a financially secured life in the future.
What if you don’t have extra money to save? Read this post on How to Save Money When You Don’t Have Extra Money.
Related Financial Books I Highly Recommend:
5.Money can buy happiness and is meant to be spent.
True, money can afford you things and experiences that can make you happy, but it’s so wrong to anchor your happiness to what your money can buy. If you believe that you need money to “buy happiness” , then you’re seeing money as something to be spent, instead of something to keep. And sadly, when you get vacuumed into that habit of spending for empty happiness, it can be quite hard to get out of it.
Do you have any of these mindsets? If you look at money this very same way, it’s about time to turn your mindsets around!
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