Are you ready to take control of your financial future and avoid common money mistakes that could be holding you back? Here are a few key strategies to help you navigate your relationship with money effectively and contribute to your financial freedom.
1. Understand Yourself with Money. Everyone has their own personal set of money beliefs, ideas and habits, and no two people will be exactly the same in the way they interact with money. No one is right or wrong necessarily either – just coming from different perspectives.
Discover how understanding your unique money mindset can transform your financial outlook. Pay attention to your own reactions and feelings as events occur with money. Try to observe yourself and be curious about what comes up for you when you are feeling good, or triggered, from a financial situation. What are you thinking in those moments? Where do the thoughts come from?
It’s an interesting experiment to get to know yourself better and how you relate to money. You will observe areas of improvement as you learn more about yourself.
Remember, how you relate to money isn’t the way another person relates to money, including those close to you, and that may cause rifts if you are making financial decisions together. If you know yourself, you can explain yourself to a partner, so they can see your point of view and explain theirs, hopefully diverting frustrating financial arguments.
2. Learn From Mistakes. Explore ways to learn from your financial mistakes and see how they can shape future financial decisions in positive ways. Sadly, most of us learn about money through a series of mistakes that we learn the hard way and then fix. We learn how to operate differently next time. However, money mistakes can take years to recover from when mistakes are made.
We get our first credit card, rack up too much debt and then learn what happens when we pay the minimum due each month. Learning is learning and that’s helpful, but we shouldn’t have to lose time and our self respect by gaining all our knowledge in this way. At a minimum, stop and examine your experience, good or bad. Reward yourself by learning more and not repeating mistakes. Set intentions to do more of what is working well and find remedies for what is not.
Too many late fees? Put a set amount on autopay to avoid missing a due date. Didn’t negotiate that last job offer? Script out how you might do better next time.
3. Avoid Money Avoidance. Address financial challenges head-on and build a healthier relationship with money right away. Whether it’s a bill you don’t want to open, or a conversation with someone who owes you money, recognize avoidant patterns and tendencies and make adjustments.
Avoiding money matters seems safer, and it can feel like jumping into the fire to look at our money issues and resolve them. However, avoidance creates underlying stress that is anything but comfortable, deteriorating our sense of financial well being.
And, It costs you money. Putting off looking at what you spend, means continuing to overspend when you could curtail it. What are you not doing with money that is costing you? I’ll bet you can think of at least one hand’s worth of activities immediately. Money and time go together and the sooner you take action with money, the better in most cases.
4. Make Informed Decisions. Working with financial experts offers insights and enables you to make informed decisions that support your long-term financial goals. It’s very important to team up with financial experts in a variety of areas to optimize your financial life. Having objective and knowledgeable partners helps you to set and reach your goals.
If you have people in your life watching over your financial well-being, keep them informed of any life changes: job changes, marital status, children, investments or moves, as they will see these changes from a financial perspective.
They will have ideas for how to adjust or optimize your financial activities to accommodate changes. Simple ideas, such as moving your 401K after a job change, could be overlooked by you, but might make a big difference in your future. Financial education is important, but you can’t know everything. Know enough to ask smart questions of your financial life partners and to find the most qualified financial team. They will often keep you from making mistakes that you couldn’t foresee without their insight.
5. Clarify Your Money Goals. Practice setting money goals – clear objectives that you care about. Then you can make sound financial choices that align with those goals and secure your financial future.
Most people’s money goals are futuristic and non specific. “I want to earn more, build my retirement savings, stop working at my current job at 65, or buy a vacation home.” The common thread in those goals is that they are not quantified. We need to attach numbers to our goals and reverse engineer the strategies to achieve them.
Think of money goals in the way we think of SMART goals. If you really want to achieve them, they must be specific, measurable, achievable, relevant and time bound. Otherwise they are more wishes than goals.
Warning! Watch your thinking around the “achievable” element. This is where limited thinking might thwart your efforts. Even if it does not appear achievable in this moment, that’s where a more abundant and open mindset can help to see a future that has more possibility than past or present experiences might lead you to believe. This is where mindset work can help you see potentiality in your life.
Don’t wait any longer to transform your relationship with money and secure a brighter financial future. Use your mistakes and rethink them as catalysts for change instead of dissapointments.
_________________________________________________________________________
I also recorded a podcast on this same topic- if you’d like to listen
https://limitfreelife.com/episode-125-five-money-mistakes-you-can-easily-avoid/
Hit play on the latest episode now and start your journey to financial empowerment!
